100th Annual Report 2006-2007 - Tata Steel

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Hundredth annual report 2006-07 SCHEDULE N : NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY AND ITS SUBSIDIARIES FOR THE FINANCIAL YEAR 2006-07 :– continued The Associates of the Company and the ownership interest are as follows : Name of the Company % Share Original Cost of Goodwill/(Capital Accumulated Carrying amount held Investment Reserve) Profit/(Loss) of Investments as at as at 31.3.2007 31.3.2007 Rs. crores Rs. crores Rs. crores Rs. crores Adityapur Toll Bridge Company Limited (Re.1/-)(a)* — — — — — 49.18 0.35 — (0.35) — Almora Magnesite Limited 39.00 0.78 — (0.01) 0.77 39.00 0.78 — (0.06) 0.72 Indian Steel Rolling Mills Limited (Re.1/-)(a)# 20.56 — — — — 20.56 — — — — Industrial Energy Limited (b) 26.00 0.01 — — 0.01 — — — — — Jamshedpur Injection Powder Limited 30.00 3.38 0.01 9.05 12.43 30.00 3.38 0.01 7.40 10.78 Kalinga Aquatics Limited (Re.1/-)(a)# 30.00 — — — — 30.00 — — — — Kumardhubi Fireclay & Silica Works Limited (Re.1/-)(a)# 27.78 — — — — 27.78 — — — — Kumardhubi Metal Casting & Engineering Limited (Re.1/-)(a)# 49.31 — — — — 49.31 — — — — Metal Corporation of India Limited (Re.1/-)(a)# 42.05 — — — — 42.05 — — — — Tata Steel (Thailand) Public Company Ltd. (formerly known as Millennium Steel Public Company Limited * — — — — — 24.99 279.68 44.98 (1.16) 278.52 Nicco Jubilee Park Limited (Re.1/-)(a)# 21.60 0.35 — (0.35) — 21.60 0.35 — (0.35) — Rujuvalika Investments Limited 24.12 0.60 (0.29) 1.39 1.99 24.12 0.60 (0.29) 1.00 1.60 Southern Steel, Berhad 27.03 100.13 — ** 28.41 128.54 27.03 100.13 — ** (11.84) 88.29 Srutech Tubes (India) Private Limited 20.00 — — 0.05 0.05 20.00 — — 0.06 0.06 Steel Asia Development and Management Corporation (Re.1/-)(a) 40.00 — — — — 40.00 — — — — Steel Asia Industries, Inc. (Re.1/-)(a) 50.00 — — — — 50.00 — — — — Steel Asia Manufacturing Corporation (Re.1/-)(a) 40.00 — — — — 40.00 — — — — Tata Construction & Projects Limited (Re.1/-)(a)# 29.66 — — — — 29.66 — — — — Tata Metaliks Limited 47.65 16.15 3.29 61.46 77.61 47.65 16.15 3.29 55.62 71.77 Tata Sponge Iron Limited 39.74 7.20 6.29 64.10 71.30 39.74 7.20 6.29 59.99 67.19 Tayo Rolls Limited 36.53 3.36 0.03 11.66 15.02 36.53 3.36 0.03 10.03 13.39 The Tinplate Company of India Limited 31.89 30.09 — (23.45) 6.64 31.89 30.09 — (25.32) 4.77 TKM Overseas Limited 49.00 1.13 — ** 0.14 1.27 49.00 1.13 — ** 0.15 1.28 TRF Limited 36.32 4.96 0.54 16.96 21.92 36.32 4.96 0.54 11.65 16.61 202 Total 168.14 9.87 *** 169.41 *** 337.55 448.16 54.85 106.82 554.98 * Earlier an Associate Company, became a subsidiary during the year. ** Includes Rs. 4.57 crores gain (2005-06 : Rs. 8.38 crores gain) on account of foreign currency translation. *** Includes Rs. 6.16 crores adjustment to General Reserve consequent to the adoption of Accounting Standard (AS) 15, Employee Benefits (revised 2005). (a) The investments in these associates have been reported at Nil value as the Company’s share of losses exceeds the carrying amount of investment. (b) Part of the year
SCHEDULE N : NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY AND ITS SUBSIDIARIES FOR THE FINANCIAL YEAR 2006-07 :– continued 2. Accounting Policies (a) Basis for Accounting The financial statements are prepared under the historical cost convention on an accrual basis of accounting in accordance with the generally accepted accounting principles, accounting standards issued by the Institute of Chartered Accountants of India, as applicable, and the relevant provisions of the Companies Act, 1956. (b) Revenue Recognition (i) Sales comprises sale of goods and services, net of trade discounts and include exchange differences arising on sales transactions. (c) (ii) (iii) Export incentive under the Duty Entitlement Pass Book Scheme has been recognised on the basis of credits afforded in the pass book. In one subsidiary, the income from services are recognised upon completion of the relevant shipping activities and related services. Income and expenses relating to incomplete voyages are carried forward as voyages-in-progress. Despatch earnings are accounted for on receipt basis. Employee Benefits (i) Short-term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered. (ii) Post employment benefits are recognised as an expense in the profit and loss account for the year in which the employee has rendered services. The expense is recognised at the present value of the amount payable towards contributions. The present value is determined using the market yields of government bonds, at the balance sheet date, at the discounting rate. (iii) Other long-term employee benefits are recognised as an expense in the profit and loss account for the period in which the employee has rendered services. Estimated liability on account of long-term benefits is discounted to the current value, using the yield on government bonds, as on the date of balance sheet, at the discounting rate. (iv) Actuarial gains and losses in respect of post employment and other long-term benefits are charged to the profit and loss (v) account. Miscellaneous Expenditure In respect of Employee Separation Scheme (ESS), net present value of the future liability for pension payable is amortised equally over five years or upto financial year ending 31st March, 2010, whichever is earlier. The increase in the net present value of the future liability for pension payable to employees who have opted for retirement under the Employee Separation Scheme of the Company is charged to the profit and loss account. (d) Fixed Assets All fixed assets are valued at cost less depreciation. Pre-operation expenses including trial run expenses (net of revenue) are capitalised. Interest on borrowings and financing costs during the period of construction is added to the cost of fixed assets. Blast Furnace relining is capitalised. The written down value of the asset consisting of lining/relining expenditure embedded in the cost of the furnace is written off in the year of fresh relining. (e) (f) Depreciation (I) Capital assets whose ownership does not vest in the Company is depreciated over their estimated useful life or five years, whichever is less. (II) In respect of other assets, depreciation is provided on a straight line basis applying the rates specified in Schedule XIV to the Companies Act, 1956 or based on estimated useful life whichever is higher. The details of estimated life for each category is as under : (i) Buildings — 30 to 62 years. (ii) Plant and Machinery — 6 to 21 years. (iii) Railway Sidings — 21 years. (iv) Vehicles and Aircraft — 6 to 18 years. (v) Furniture, Fixtures and Office Equipment — 5 to 10 years. (vi) Intangibles (Computer Software) — 5 to 10 years. (vii) Development of property for development of mines and collieries are depreciated over the useful life of the mine or lease period whichever is less, subject to maximum of 10 years. (viii) Blast Furnace relining is depreciated over a period of 10 years (average expected life). (ix) Freehold land is not depreciated. (x) Leasehold land is amortised over the life of the lease. (xi) Roads — 30 to 62 years. In some subsidiaries, joint ventures and associates depreciation is calculated on written down value basis and intangible assets are amortised over the period for which the rights are obtained. The depreciation charge in respect of these units is not significant in the context of the consolidated financial statements. In case of certain foreign subsidiaries, the assets are depreciated on a straight line basis over the estimated useful life of the assets. Foreign Currency Transactions Foreign Currency Transactions (FCT) and forward exchange contracts used to hedge FCT (including firm commitments and forecast transactions) are initially recognised at the spot rate on the date of the transaction/contract. Monetary assets and liabilities relating to foreign currency transactions and forward exchange contracts remaining unsettled at the end of the year are translated at year end rates. The differences in translation and realised gains and losses on foreign exchange transactions (including option contracts), other than those relating to fixed assets are recognised in the profit and loss account. Further in respect of transactions covered by forward exchange contracts, the differences between the contract rate and the spot rate on the date of the transaction is charged to the profit and loss account over the period of the contract. Exchange difference relating to monetary items that are in substance forming part of the Company’s net investment in non integral foreign operations are accumulated in Foreign Currency Translation Reserve Account. 203
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A Century of Trust 100th Annual Rep
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Tata Steel is Asia’s first and In
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Redefining steel with world-class p
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in a manner that ring-fences the Co
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Board of Directors Mr. R. N. Tata C
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The state-of-the-art Hot Strip Mill
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Distribution of Revenue 2006 - 2007
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1907-2007 JRD Tata with Pandit Jawa
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1907-2007 Tata Steel’s state-of-t
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This photograph taken by a Tata Ste
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Profit Sharing Bonus was granted fo
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A modern swimming pool at the G Tow
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steeljunction in Kolkata - India’
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Tata Steel has introduced high-end
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Tata Structura is a new-age constru
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Shareholder interaction at an Annua
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Within three weeks of the announcem
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It was 1956. The company was faced
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Community and environment : Improvi
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A Critical Care Unit, in the 850-be
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The Tata Steel Family Initiatives F
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The Tata Steel works, mines, collie
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An aerial view of the planned indus
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The Cold Rolling Complex at Jamshed
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1933 Two new roughing and finishing
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From the early days, the Tata Steel
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Production Highlights • The best
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Aspire with T3 With the objective o
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Operational Highlights NSA increase
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was above the average total score o
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Blast furnaces at Corus’ integrat
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Corus produces strong, light steel
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Corus is British Triathlon’s main
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Review of Corporate Sustainability
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TSRDS focused on popularising repro
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Centenary Year The founder, Jamsetj
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esulting in a reduction in consumpt
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convertible preference shares and a
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expansion of crude steel making cap
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The bulk cargo berths are being des
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Corporate Governance Pursuant to Cl
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Annexure 'A' to Directors’ Report
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Form - B Form for disclosure of par
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6 am 2 pm 12 noon 10 am 8 am 8 pm 6
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Particulars of technology imported
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Management Discussion and Analysis
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of 8%. In 2006, China produced 422.
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The Company plans to achieve these
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I. Strategic Rationale for acquisit
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Steelium (India’s first branded c
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The “G” Blast Furnace in Jamshe
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Sales of manganese ore in the domes
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d) Payments and Provisions to Emplo
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m) Stores and Spare Parts and Stock
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The Company generated EVA of Rs. 2,
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Business and Operational Risk The m
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• Raising cost efficient funds fo
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Highlights 2006-07 2005-06 Rupees R
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Auditors’ Report TO THE MEMBERS O
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(b) In our opinion and having regar
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(xii) In our opinion and according
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Profit and Loss Account for the yea
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Cash Flow Statement for the year en
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Schedule forming part of the profit
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Schedule forming part of the balanc
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Schedules forming part of the balan
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SCHEDULE M : NOTES ON BALANCE SHEET
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Page 153 and 154: SCHEDULE M : NOTES ON BALANCE SHEET
Page 163 and 164: Balance Sheet Abstract and Company'
Page 165 and 166: CAPITAL ACCOUNTS Financial Statisti
Page 167 and 168: Financial Ratios 2006-07 2005-06 20
Page 169 and 170: Name Category No. of Whether No. of
Page 171 and 172: the Tata Code of Conduct, which req
Page 173 and 174: Shareholding of the Directors in th
Page 175 and 176: Committees In addition to the above
Page 177 and 178: employees to report concerns about
Page 179 and 180: Market Information Market Price Dat
Page 181 and 182: Distribution of Shareholding Number
Page 183 and 184: Address for Correspondence : Tata S
Page 185 and 186: Certificate To the Members of TATA
Page 187 and 188: Statement pursuant to Section 212(8
Page 189 and 190: 4. Subject to the matters referred
Page 191 and 192: Consolidated Profit and Loss Accoun
Page 193 and 194: Consolidated Cash Flow Statement fo
Page 195 and 196: Schedule forming part of the Consol
Page 197 and 198: Schedules forming part of the Conso
Page 203: SCHEDULE N : NOTES TO THE CONSOLIDA
Page 207 and 208: SCHEDULE N : NOTES TO THE CONSOLIDA
Page 219 and 220: The Dimna reservoir near Jamshedpur
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100th Annual Report 2006-2007 - Tata Steel

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