Tata Steel Long Products Ltd Directors Report.

Dear Members,

The Directors take pleasure in presenting the Integrated Report (prepared as per the framework set forth by the International Integrated Reporting Council) and the Annual Accounts on the business and operations of Tata Steel Long Products Limited, along with the summary of standalone and consolidated financial statements for the year ended March 31, 2020.

A. Financial Results

(Rs. lakh)
Particulars Standalone Consolidated
2019-20 2018-19 2019-20 2018-19
Revenue from operations 3,48,999.39 99,205.30 3,48,999.39 99,205.30
Total expenditure before finance cost, depreciation 3,33,672.65 84,735.02 3,33,673.55 84,736.22
Operating Profit 15,326.74 14,470.28 15,325.84 14,469.08
Add: Other income 8,126.40 5,766.39 8,131.81 5,773.10
Profit before finance cost, depreciation, exceptional items and taxes 23,453.14 20,236.67 23,457.65 20,242.18
Less: Finance costs 29,284.47 302.18 29,284.47 302.18
Profit before depreciation, exceptional items and taxes (5,831.33) 19,934.49 (5,826.82) 19,940.00
Less: Depreciation and amortisation expenses 31,079.38 1,157.90 31,079.38 1,157.90
Profit/(Loss) before exceptional items & tax (36,910.71) 18,776.59 (36,906.20) 18,782.10
Add/(Less): Exceptional Items (16,113.37) - (16,113.37) -
Profit before taxes (53,024.08) 18,776.59 (53,019.57) 18,782.10
Less: Tax Expense (1,396.37) 6,343.43 (1,396.37) 6,343.43
(A) Net Profit/(Loss) for the Period (51,627.71) 12,433.16 (51,623.20) 12,438.67
Total Profit/(Loss) for the period attributable to:
Owners of the Company - - (51,623.20) 12,438.67
Non-controlling interests - - - -
(B) Total other comprehensive income (706.66) 984.57 (706.66) 984.57
(C) Total comprehensive income for the period [ A + B ] (52,334.37) 13,417.73 (52,329.86) 13,423.24
Retained Earnings: Balance brought forward from the previous year 15,953.65 20,233.59 15,969.16 20,243.59
Add: Profit for the period (51,627.71) 12,433.16 (51,623.20) 12,438.67
Add: Other movements within equity - (13,000.00) - (13,000.00)
Balance (35,674.06) 19,666.75 (35,654.04) 19,682.26
Which the Directors have apportioned as under to:-
(i) Dividend on Ordinary Shares 1,925.00 3,080.00 1,925.00 3,080.00
(ii) Tax on dividends 395.69 633.10 395.69 633.10
Total Appropriations 2,320.69 3,713.10 2,320.69 3,713.10
Retained Earnings: Balance to be carried forward (37,994.75) 15,953.65 (37,974.73) 15,969.16

1. Dividend

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company has formulated and adopted the Dividend Distribution Policy (‘the Policy). The said policy is available on the website of the Company, https://www.tatasteellp.com/performance-corporate-governance/.

The Company has been consistently paying dividend to its esteemed equity shareholders over the years and has maintained a good track record in this regard. In order to ensure a more sustainable future, change in the business model from sole reliance on sponge iron business to forward integration into steel business was inevitable. Accordingly, the Company acquired the steel business of Usha Martin Limited ("UML") on April 09, 2019 and added special steel long products into its portfolio. Unfortunately, the Indian steel demand witnessed unprecedented sluggishness; with significant de-growth in the automotive sector. The Company took several measures; such as operational improvement and synergy drives which helped it to contain the impact of the market forces on its realisation, but the same could not fully cover the huge decline in the realisations resulting into recording of a loss in FY 2019-20. In view of the financial performance of the Company in FY 2019-20, the Board has decided not to recommend any dividend for the financial year 2019-20. This decision has also taken into account the negative impact of the COVID-19 pandemic on the business of the Company. However, the Board of Directors remains committed for creating value for the shareholders of the Company.

2. Transfer to Reserves

The Directors do not propose to transfer any amount to the general reserve.

3. Capex and Liquidity

During the year under review, the Company has paid a sum of

Rs. 390,612 lakh towards purchase consideration for acquisition of steel business. The Company spent Rs. 3,813 lakh on capital projects largely towards essential sustenance and replacement.

The Companys liquidity position remains strong at Rs. 68,161 lakh as on March 31, 2020, comprising of Rs. 16,161 lakh in cash and cash equivalent and Rs. 52,000 lakh in undrawn bank lines.

4. Management Discussion & Analysis Report

The Management Discussion and Analysis Report for the year under review, as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, is annexed to the report (Annexure A) and forms part of this Integrated Report.

5. Credit Rating

The Company enjoys a sound reputation for its prudent financial management and its ability to meet financial obligations. The details of Credit Rating forms part of the Corporate Governance Report.

B. Integrated Report

In continuation with our efforts towards enhancing stakeholder value, we are happy to present you our Integrated Report which endeavours to articulate the measures undertaken by the Company and is a governance-based reporting. The Integrated Report is prepared by adopting the framework developed by the International Integrated Reporting Council.

C. External Environment

Global economic activity faced several headwinds in 2019 and ended with a slowdown worse than the global economic crisis. The first half remained sluggish for manufacturing and global trade on account of higher tariffs, uncertain trade environment and disruption in the automotive industry from new emission standards in Euro area and a slowing growth in China. The fourth quarter witnessed a bottoming out of the growth. While 2020 started on a good note with the US and China reaching phase 1 agreement and waning uncertainties of Brexit, the world got an enormous shock in the form of COVID-19. Lockdowns and travel bans were necessary to preserve the health and prevent the virus from spreading, however caused significant damage to the economy and crude Oil prices hit rock bottom. As the days are passing through, few bright spots have emerged. Timely actions and significant stimulus have somewhat cushioned the blow and things are returning to normalcy in pockets.

Indian economy growth moderated to 4.2% in FY20 from 6.1% in FY19 on account of weak domestic consumption, continued liquidity crunch, sluggish manufacturing and investments and extended monsoon etc. In 2019, RBI made a cumulative cut of 135 basis point in the repo rate and in view of the COVID-19 pandemic, another 75-basis points rate cut was done in March 20. The government was quick to announce 1.7 lakh crore interim relief package targeting the bottom of the economic pyramid and subsequently announced 20 lakh crore comprehensive package under the name of "Aatma Nirbhar Bharat Abhiyaan".

The package focused upon five pillars defined as a) economy, b) infrastructure c) system d) vibrant demography and e) demand. The Post COVID-19 revival strategy lays renewed thrust on Rural and MSME (Micro, small and medium enterprises) segment along with the preference for domestically manufactured products.

D. Steel Industry

In Calender Year ("CY") 2019, the world crude steel production grew by 3.4% over CY 2018 largely driven by growth in Asia and Middle east with China remaining the worlds largest crude steel producer with 996 million tons followed by India 111 million tons and Japan 99 million tons in same period. However steel prices remained under pressure coupled with softening demand across the advanced and emerging economies.

FY20 was a year of two halves for the steel industry. The first half witnessed a muted demand and subdued pricing environment. Key consuming segments experienced further downturn in Automotive & allied industries owing to high inventory and liquidity crunch. The second half started witnessing some recovery in later part of Q3FY20 on improved market sentiments with higher demand and uptrend in pricing, however this got squashed by COVID-19 led unprecedented disruption towards end March20. The world steel Association and various analysts expect Indian Steel demand to contract by 18-20% in 2020 on the back of COVID-19 pandemic induced halt of economic and business activities.

E. Operations & Performance

Despite several macroeconomic headwinds, volatile market environment and operational challenges, the Company delivered a respectable performance driven by a strong focus on operational excellence and market penetration. During the year under review, the Company acquired Steel business of Usha Martin Limited on April 9, 2020. This being the 1st year of operations for steel, the Company primarily focused on seamless integration of organisation, institutionalising a robust governance mechanism and stabilising its operations.

With the addition of Gamharia unit, DRI business registered a substantial growth both in production (75%) and sales (43%) on a year on year basis. The Company also achieved more than 95% Crude steel capacity utilization in H2FY20 (in blowing mode). On the market front, the Company has been able to consolidate its position in Special Bar Quality ("SBQ") by increasing its market share from 9% in FY19 to 12% in FY20 (MS in H2-FY20: 15%) amidst a de-growing automotive industry. It has also made in-roads in Non-Automotive segments focusing on L&E, Tractors and Railways, collectively constituting 25 kt sales and kept a keen focus on enriching its Wire-Rods sales mix towards Alloy Steel in FY20. The proportion of Alloy Wire-Rods has increased from 29% in FY19 to 37% in FY20. Continued focus and concerted efforts towards operational efficiency and synergy initiatives helped to reduce the crude steel cost substantially by ~ Rs. 12,000/t in Q4FY20 from the year beginning level, 75% of which is sustainable (operation efficiency improvement & synergy with parent company). All these efforts have finally resulted in Rs. 184 crore of EBITDA with 18% growth year on year.

F. Business Impact of COVID-19

The COVID-19 breakdown has led to unprecedented socio- economic disruption worldwide. The nation-wide stringent lockdown got imposed from March 25, 2020 which brought the economic activities to a standstill. While Steel and mining activities were kept exempt subject to certain guidelines, the steel demand got impacted adversely as key consuming segments struggled to operate amidst weakening economic activities, major hubs in red/containment zones, working capital constraints, migrant labour issues and logistic challenges.

During this period, the first and foremost priority for the Company remains the health and safety of the employees and the communities in which it operates while managing any impact for its customers and suppliers. As an immediate response to this pandemic, the Company has rolled out several employee friendly policies, morale building platforms and put in place the stringent mechanism on sanitisation and social distancing norms. The Company forthwith decided to scale down the operations and had been able to quickly ramp-up the operations by making a tactical decision to rapidly ramp-up the exports.

As economic activities have started recovering with the removal of the lockdown and gradual relaxation in mobility restrictions, the Company is continuously leveraging the opportunities to increase penetration in the domestic market. In addition, the Company is continuously focusing upon the cash conservation and adequate liquidity for the smooth operations.

For further details, please refer Management Discussion and Analysis Report which forms part of this report.

G. Update On Radhikapur Coal Block

In the month of November 2012, Ministry of Coal ("MoC") issued notices to the Company for invocation of bank guarantee of Rs. 3,250 lakh submitted towards performance of conditions for allocation of Radhikapur (East) coal block against which the Company had filed a writ petition in the Honble High Court of Delhi, which directed the Company to keep the bank guarantee valid till November 30, 2015 by which date the MoC was directed to take decision. The bank guarantee expired after November 30, 2015 and had not been renewed, since no communication had been received from MoC. Subsequently, MoC issued a notice dated December 28, 2015, stating that the bank guarantee be invoked and the aforesaid amount be deposited. Consequent to MoCs notice, the Company had moved to the Honble High Court of Delhi. In a recent judgment dated May 27, 2020, the Honble High Court of Delhi has remanded the matter to MoC to consider afresh on the aspect whether the delay in achieving the milestones is attributable to the Company and has directed the Company to ensure that the bank guarantee furnished by it is kept alive till the said decision is rendered by the MoC. Pending finalisation of the matter, the amount continues to be disclosed as a contingent liability.

During pendency of the aforesaid matters in Honble High Court of Delhi, the Honble Supreme Court of India vide its order dated September 24, 2014 had cancelled allocation of 214 coal blocks including the Radhikapur (East) Coal Block which was allotted to the Company on February 7, 2006. The amount incurred on the Radhikapur (East) Coal Block upto March 31, 2020 aggregates to Rs. 18,040.96 lakh, (March 31, 2019: Rs. 18 ,040.96 lakh), and the carrying amount in the books, net of depreciation and write off as at March 31, 2020 is Rs. 17,893 lakh (March 31, 2019: Rs. 17,905 lakh).

Pursuant to the judgment of the Honble Supreme Court of India, the Government of India had promulgated Coal Mines (Special Provision) Rules, 2014 ("Rules") for allocation of the coal mines through auction and matters related thereto. In terms of the said Rules, the successful bidder will be called upon to pay to the prior allocattee the expenses incurred by the prior allocattee towards land and mine infrastructure. Pursuant to the judgement dated March 9, 2017 of the Honble High Court of Delhi in W.P (c) 973/2015, the directives of MoC vide its letter dated February 1, 2018 and as per details prescribed by Nominated Authority, the Company has furnished the required statement of expenses and other details in the prescribed format on February 22, 2018. Relying on the legal position and legal opinion obtained by the Company in respect of the recoverability of the amount, no provision is considered necessary.

H. Strategy

The year under review had been quite accomplishing for the Company in terms of forward integration of the business and laying down the strong foundation for a sustainable future. The Company has adopted strategic planning framework which is used to develop and deploy both Long term and short-term plans of the Company. It continuously scans the external environment and competitive landscape to understand the various risks, opportunities and threats in the light of our organisational strengths and weaknesses.

Going forward, the Company aspires to achieve the industry leadership by pursuing the following priorities in medium to long term

a) Become the most preferred supplier in the chosen segments by providing benchmark quality and services

b) Achieve sustainable and profitable growth

c) Be a more respected corporate citizen

In order to achieve its strategic objectives, the Company has also defined a set of strategic enablers. Human capital is the critical success factor for any organisation, hence the Company is focusing upon developing enthused and high performing human capital. With the onset of industry 4.0, it becomes imperative for the Company to accelerate the deployment of digital technologies for future readiness. Along with this, the Company is also focused on creating a culture of agility and innovation to keep pace with the fast-changing environment and create a differentiation.

I. Material Developments during the Financial Year

a. Acquisition of Steel business undertaking of Usha Martin Limited

The Company, as a part of its strategy to grow in long products, executed definitive agreements for acquisition of steel business of Usha Martin Limited (‘UML), a special steel and wire rope manufacturer, through a slump sale on a going concern basis. The Company had been evaluating various strategic options to enhance its product portfolio and had identified an entry into steel manufacturing in long products as a route to ensure sustainable value creation for its shareholders.

On April 09, 2019, the Company completed the acquisition of steel business undertaking including captive power plants pursuant to a cash consideration (after adjustment for negative working capital and debt like items) payable to Usha Martin Limited of Rs. 4,094 crore (Rupees Four Thousand Ninety Four crore only). Subsequently, the negative net working capital amount after transfer of the iron ore mines increased and the net cash consideration of the takeover was reduced to Rs. 4,049 crore (Rupees Four Thousand Forty Nine crore only).

b. Issue of Equity Shares on Rights Basis

The Board at its meeting held on October 24, 2018, approved the issuance of fully paid up ordinary shares of the Company, by way of a rights issue to the existing shareholders of the Company upto an amount not exceeding Rs. 1,800 crore (Rupees Eighteen Hundred crore only).

Subsequently, the Committee of Board at its meeting held on June 13, 2019, approved the issuance of 3,30,00,000 equity shares of face value of Rs. 10 each, on a rights basis, not exceeding an amount of Rs. 1,650 crore (Rupees One Thousand Six Hundred Fifty crore only) by the Company to the eligible equity shareholders. The Rights Entitlement ratio was fixed in the ratio of 15:7. The issue price was fixed to Rs. 500 per Rights Equity Share (including a premium of Rs. 490 per Rights Equity Share). The said issue opened for subscription by shareholders on July 02, 2019 and closed on July 16, 2019.

On July 24, 2019, the Company allotted 2,97,00,000 Rights Equity Shares at a price of Rs. 500 per Rights Equity Share (including a premium of Rs. 490 per Rights Equity Share) having face value Rs. 10 each for an amount aggregating to Rs. 1,485 crore (Rupees One Thousand Four Hundred Eighty Five crore only), to the eligible equity shareholders of the Company.

Accordingly, pursuant to the aforesaid allotment, the paid-up equity share capital of the Company has increased from Rs. 15,40,00,000/- to Rs. 45,10,00,000/- consisting of 4,51,00,000 equity shares of face value of Rs. 10 each.

c. Issue of Non-Convertible Redeemable Preference Shares

The Board at its meeting held on October 24, 2018, approved the issuance of Non-Convertible Redeemable Preference Shares ("NCRPS") of upto Rs. 1,000 crore (Rupees One Thousand crore only) to Tata Steel Limited on Private Placement basis, subject to the approval of Shareholders of the Company.

Subsequently, the Shareholders of the Company at its ExtraOrdinary General meeting held on December 14, 2018, approved the offer and issuance of 11.30% NCRPS for an amount not exceeding Rs. 1,000 crore (Rupees One Thousand crore only) to Tata Steel Limited on Private Placement basis.

However, the Company has not felt the need as yet to issue Non-Convertible Redeemable Preference Shares to Tata Steel Limited.

d. Change in name of the Company

In order to align the name of the Company with the aspiration to pursue growth in long products specialty steel and the newly acquired steel business undertaking of Usha Martin Limited being the first step in that direction, the Board at its meeting held on April 18, 2019, approved the proposal to change the name of the Company from "Tata Sponge Iron Limited" to "Tata Steel Long Products Limited", subject to the approval of the Shareholders of the Company and Central Government.

Subsequently, the shareholders at the Annual General Meeting of the Company held on July 15, 2019 approved the proposal of change in name of the Company and consequently, with the approval of the Central Government, the name of the Company was changed from "Tata Sponge Iron Limited" to "Tata Steel Long Products Limited" effective August 20, 2019.

e. Shifting of Registered Office of the Company from the State of Odisha to the State of West Bengal

The Board of Directors of the Company at its meeting held on April 18, 2019, accorded its approval for shifting of registered office of the Company, from the State of Odisha to the State of West Bengal. Subsequently, the Shareholders of the Company, accorded their approval to the said proposal, at the 36th Annual General Meeting of the Company held on July 15, 2019.

However, basis the feedback received from the key stakeholders, the Board at its meeting held on June 09, 2020, decided not to pursue the said proposal of shifting the registered office of the Company, for the time being. Hence, the registered office of the Company will continue to be at Joda, Odisha.

J. Corporate Sustainability

Our commitment to sustainability is anchored firmly in Tata groups ethos and values, which have been revitalised with a concerted focus on customer success, trust, passion, change and performance. The balance between economic success, environmental protection and social responsibility has been an integral part of our corporate culture for years now.

At Tata Steel Long Products, sustainability also means creating distinct values for all its stakeholders– customers, shareholders, employees, suppliers and community in a balanced manner. This is apparent from the high perceptional scores given by the stakeholders, year-on-year, in the feedback surveys conducted by the Company. Over the years, the Company has effectively focused on the key sustainability drivers and aspires to enhance them in future.

The concept of inclusive growth through Affirmative Action ("AA") had been adopted by the Company in the past. Further efforts have been made by the Company during the year to strengthen the actions.

Safety and Environment

Conducting business responsibly is a cornerstone of the Companys strategy and culture. The Company has adopted a holistic approach for its sustainability framework by giving focused impetus in areas of Safety, Health and Environment ("SHE"). Establishing high safety standards and enhancing safety performance at work are among the key priorities of the organisation. During the last year, emphasis was laid on capability building through structured trainings to evolve a mature safety culture. The Felt Leadership safety training for the employees continues to progress steadily to sensitise and build leadership competence on safety. Other strategies such as demonstration of visible leadership on the shop-floor by identification & elimination of Commonly Accepted Unsafe Practices (E-CAUP) by Senior Leaders; Identification & correction of Fatality Potential unsafe conditions (Safety Observations) by Middle level leaders; Identification & stoppage of fatality & serious injury potential unsafe acts (Site Severity Audits) by front line leaders were initiated to bring a holistic approach in field of safety management. Incident reporting and analysis was made more robust with introduction of standard investigation protocols and procedures. Roll out of online portal - ‘Ensafe for reporting safety deviations; mandatory inclusion of SHE conditions in work orders of vendor partners; introduction of ‘process safety management were few other initiatives conceived and implemented during the year.

We have always believed that protecting the environment in which we operate & live are among our highest priorities. The Company has established an Environmental policy, Climate change policy and Energy policy and key tenants of the policies always guide in identifying and successfully managing the Environmental issues, energy usages, reduction in greenhouse gases ("GHG") and water conservation. Over the years we are continuously focusing on lowering the dust emission and other gaseous pollution from our industry by adopting the state of art technologies. The Electro Static Precipitators (ESP) of captive power plant were recently upgraded to ensure emission much below the standards set by the government. Regular audits and monitoring are done to identify gaps and required engineering solutions are provided to bridge the gaps. The steel industry contributes to about 7-9% of global emission and is considered to be a ‘hard to abate sector since carbon is used as a reductant in the steelmaking process. Tata Steel Long Products has emission adopted several technologies to lower down the CO2 and have conceptualised some other best practices for adoption in its steel manufacturing, such as utilisation of waste heat for power generation and use of less carbon intensive substances in steel making. Reduction of CO2 emission through reduced dependence of non-renewable energy was demonstrated through Installation of 235 KW solar based power plant at Joda. The Company believes that new technologies, will be fundamental means for industries to reduce their carbon footprints exponentially to achieve the global targets of climate change and has aligned its goals accordingly.

Corporate Social Responsibility (CSR)

The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure B of this report in the format prescribed in the

Companies (Corporate Social Responsibility Policy) Rules, 2014. For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which is a part of this report.

During the year under review, there has been no change to the CSR Policy. The Policy is available on the website of the Company at https://www.tatasteellp.com/performance-corporate-governance/ During the year, the Company has spent Rs. 320.88 lakh on CSR Activities.

K. Material Changes Post Closure of Financial Year

• The outbreak of COVID-19 and ensuing mobility restrictions severely impacted industrial activity and consumer sentiment.

• Despite these constraints which led to throttling of production by ~50% during April20 and May20, crude steel production in 1QFY21 was sustained at 1QFY20 levels. While sales in April20 and May20 were lower, the Company significantly increased sales volumes in June with opening of economic activity in India which led to a 25%YoY growth in 1QFY21 saleable steel sales. Steel exports sales were ramped up significantly by tapping new markets and ramping up the supply chain capability.

• The Company is closely monitoring the situation and taking appropriate actions as per the directions issued by the regulatory authorities from time to time keeping in view the health and safety of its employees and the community and the interests of its customers and other stakeholders

L. Corporate Governance

The Company believes that facilitation of effective, entrepreneurial and prudent management helps in delivering long term success of the Company. The fundamental objective of corporate governance in the Company is to boost and maximise shareholder value and protect the interest of other stakeholders.

In terms of Regulation 34(3) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance, together with certificate from Practicing Company Secretary, certifying compliance with conditions of Corporate Governance, forms part of this Report (Annexure C).

Meetings of the Board and Committees of the Board

A calendar of meetings is prepared and circulated in advance to the Directors at the beginning of the year. During the year Seven (7) meetings of Board and Six (6) Audit Committee meetings were held, details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. All recommendations made by the Audit Committee were accepted by the Board during the financial year 2019-20. The details of composition of the Board and its Committees as well as details of other Board Committee meetings held during the year are given in the Corporate Governance Report, which forms part of this Report.

Selection of New Directors and Board Membership Criteria

The Nomination and Remuneration Committee (‘NRC) works with the Board to determine the appropriate characteristics, skills and experience for the Board as a whole as well as for its individual members with the objective of having a Board with diverse backgrounds and experience in business, finance, governance, and public service. Characteristics expected of all Directors include independence, integrity, high personal and professional ethics, sound business judgement, ability to participate constructively in deliberations, and willingness to exercise authority in a collective manner. The Company has in place a Policy on appointment & removal of Directors ("Policy") The salient features of the Policy are:

• It acts as a guideline for matters relating to appointment and re-appointment of directors

• It contains guidelines for determining qualifications, positive attributes of directors, 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 of appointment of an Independent Director.

During the year under review, there has been no change to the Policy.

The Policy is available on the website of the Company at https:// www.tatasteellp.com/performance-corporate-governance/

Familiarisation Programme for Directors

All new Directors (including Independent Directors) inducted to the Board go through a structured orientation programme. Presentations are made by Senior Management giving an overview of the operations, to familiarise the new Directors with the Companys business operations. The new Directors are given an orientation on the products of the business, Board constitution and procedures, matters reserved for the Board, and the major risks and risk management strategy of the Company. Visits to plant are organised for the new Directors to enable them to understand the business better. During the year under review, four new Independent Directors were inducted on the Board of the Company, namely, Dr. Ansuman Das, Mr. Srikumar Menon, Mr. Shashi Kant Maudgal and Ms. Neeta Karmakar. All the newly inducted Independent Director has undergone the structured orientation programme except Ms. Neeta Karmakar who was inducted on the Board of the Company effective March 30, 2020. The Familiarization Programme of Ms. Karmakar shall be conducted during Financial Year 2020-21. Details of orientation given to the existing independent directors in the areas of Corporate Social Responsibility, Operations, Marketing, Sales & Supply Chain Management, Governance Risk & Compliance, Human Resource Management etc., are available on the website at https://www.tatasteellp.com/wp-content/uploads/2020/08/ Familiarization-Independent-Directors-2019-20.pdf

Board Evaluation

The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

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

• Degree of fulfillment of key responsibilities towards stakeholders (by way of monitoring corporate governance practices, participation in the long-term strategic planning, 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 above criteria are based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 05, 2017. The Chairman of the Board had one-on-one meetings with each Independent Director and the Chairman of NRC had one-on-one meetings with each Executive and Non-Executive, Non-Independent Directors. These meetings were intended to obtain Directors inputs on effectiveness of the Board/ Committee processes.

In a separate meeting of independent directors, performance of non-independent directors, the board as a whole and the Chairman of the Company was evaluated, taking into account the views of executive directors and non-executive directors. The Nomination and Remuneration Committee 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 the meeting of Nomination and Remuneration Committee, the performance of the Board, its committees, and individual directors was discussed.

The evaluation process endorsed the Board Members confidence in the ethical standards of the Company, the resilience of the Board and the Management in navigating the Company during challenging times, cohesiveness amongst the Board Members, constructive relationship between the Board and the Management, and the openness of the Management in sharing strategic information to enable Board Members to discharge their responsibilities and fiduciary duties.

Remuneration Policy for the Board and Senior Management

Based on the recommendations of NRC, the Board has approved the Remuneration Policy for Directors, Key Managerial Personnel (‘KMPs), and all other employees of the Company. As part of the policy, the Company strives to ensure that:

• the level and composition of remuneration is reasonable and sufficient to attract, retain, and motivate Directors of the quality required to run the Company successfully;

• relationship between remuneration and performance is clear and meets appropriate performance benchmarks; and

• remuneration to Directors, KMPs, and Senior Management involves a balance between fixed and incentive pay, reflecting short, medium, and long-term performance objectives appropriate to the working of the Company and its goals.

The salient features of the Policy are:

• It lays down the parameters based on which payment of remuneration (including sitting fees and remuneration) should be made to Independent Directors and Non-Executive Directors.

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

• It lays down the parameters for remuneration payable to Director for services rendered in other capacity

During the year under review, there has been no change to the Policy. The Policy is available on the website of the Company at https://www.tatasteellp.com/performance-corporate-governance/.

Particulars of Employees

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report [Annexure D(i)].

In terms of the provisions of Section 197 (12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said Rules forms part of the report.

[Annexure D(ii)].

Independent Directors Declaration

The Independent Directors of the Company have been appointed in terms of the requirements of the Companies Act, 2013 ("the Act"), the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").

The Company has received declaration from the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act read with Regulation 16(1) (b) of the Listing Regulations. In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstances or situations which exist or may be reasonably anticipated that could impair or impact their ability to discharge their duties.

In the opinion of the Board, there has been no change in the circumstances which may affect their status as independent directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including pro_ciency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. In terms of Section 150 of the Act, read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have undertaken requisite steps towards the inclusion of their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.

Independent Directors Meeting:

During the year under review, the Independent Directors met on March 27, 2020, inter alia, to: a) Review the performance of Non-Independent Directors and the Board of Directors as a whole; b) Review the performance of the Chairman of the Company, taking into account the views of the Executive and Non- Executive Directors; c) Assess the quality, content and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

All the Independent Directors were present at this meeting. The observations made by the Independent Directors have been adopted and put into force.

Board Diversity

The Company recognises and embraces the importance of a diverse Board in its success. The Company believes that a truly diverse Board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help the Company to retain its competitive advantage.

Director(s)

During the year under review, the following changes took place in the Board of Directors of the Company:

Inductions

The Board of Directors of the Company, based on the recommendation of Nomination and Remuneration Committee ("NRC"), approved the following appointments on the Board of the Company:

1. Appointment of Dr. Ansuman Das (DIN: 02845138) as an Additional (Non-Executive, Independent) Director effective July 15, 2019. 2. Appointment of Mr. Srikumar Menon (DIN: 00470254), as an Additional (Non-Executive, Independent) Director of the Company effective July 15, 2019. 3. Appointment of Mr. Shashi Kant Maudgal (DIN: 00918431), as an Additional (Non-Executive, Independent) Director of the Company effective July 15, 2019. 4. Appointment of Mr. Ashish Anupam (DIN: 08384201) as Managing Director of the Company effective November 01, 2019. 5. Appointment of Ms. Neeta Karmakar (DIN: 08730604) as an an Additional (Non-Executive, Independent) Director of the Company effective March 30, 2020.

The Board is satisfied with the integrity, expertise and experience (including pro_ciency) of all the above Independent Directors.

The resolution for confirming the above appointment(s) forms part of the Notice convening the Annual General Meeting scheduled to be held on September 14, 2020.

The profile and particulars of experience, attributes and skills that qualify the above Directors for the Board membership are disclosed in the Notice convening the forthcoming Annual General Meeting to be held on September 14, 2020.

Re-Appointment

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Companys Articles of Association, Mr. Koushik Chatterjee (DIN: 00004989) (Non-Executive Non-Independent Director), retires by rotation at the ensuing Annual General Meeting of the Company and being eligible, seeks re-appointment.

The necessary resolution for re-appointment of Mr. Koushik Chatterjee forms part of the Notice convening the ensuing Annual General Meeting scheduled to be held on September 14, 2020.

The profile and particulars of experience, attributes and skills that qualify Mr. Koushik Chatterjee (DIN: 00004989) for the Board membership are disclosed in the Notice convening the Annual General Meeting to be held on September 14, 2020.

Cessations

During the year, Mr. Dipak Kumar Banerjee (DIN: 00028123), Mr. Manoj T. Thomas (DIN: 03614981) and Dr. O N Mohanty (DIN: 03058576) ceased to be Independent Directors of the Company, on completion of their tenure as Members of the Board. Mr. Banerjee and Mr. Thomas ceased as Members of the Board effective July 14, 2019 and Dr. Mohanty ceased as Member of the Board effective July 15, 2019.

Mr. Sanjay Kumar Pattnaik (DIN: 00256832), on completion of his tenure, ceased to be the Managing Director of the Company, effective October 31, 2019.

The Board places on record its appreciation for their invaluable contribution and guidance during their tenure as Directors of the Company.

During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board / Board Committees of the Company.

Key Managerial Personnel:

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2020, are:

1. Mr. Ashish Anupam – Managing Director;

2. Mr. S. K. Mishra – Chief Financial Officer;

3. Mr. Sanjay Kumar Shrivastav – Joint Chief Financial Officer;

4. Mr. Sanjay Kasture – Chief Risk & Compliance Officer and Company Secretary.

During the year, the following changes took place in the key managerial personnel of the Company.

1. Mr. Sanjay Kumar Shrivastav was appointed as the Joint Chief Financial Officer of the Company effective July 29, 2019. 2. Mr. Ashish Anupam (DIN: 08384201) was appointed as the Managing Director of the Company effective November 01, 2019, subject to the approval of the Shareholders of the Company.

3. Mr. Sanjay Kumar Pattnaik (DIN: 00256832), on completion of his tenure, ceased to be the Managing Director of the Company, effective October 31, 2019. The remuneration and other details of the Key Managerial Personnel for FY 2019-20 are provided in the Extract of the Annual Return which forms part of this report.

Audit Committee

The Audit Committee is duly constituted as per the provisions of the Companies Act, 2013, applicable Rules framed thereunder read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The primary objective of the Committee is monitoring and supervising the Managements financial reporting process to ensure accurate and timely disclosures with highest levels of transparency, integrity and quality of financial reporting. During the financial year, there has been no instance where the Board has not accepted any recommendation of the Committee.

The Committee comprises of Mr. P.C. Parakh (Chairman), Mr. Srikumar Menon, Mr. Shashi Kant Maudgal, Ms. Neeta Karmakar and Mr. Koushik Chatterjee. The Committee met 6 (six) times during the year under review. Details of terms of reference of the Committee, number and dates of meeting held and attendance of Members during the year are part of the Corporate Governance Report.

Internal Process & Financial Control

Improvement in the business processes and systems across all functions is a continuous process, in line with the Tata Business Excellence Model that the Company has adopted. The Company continues to maintain Integrated Management System (IMS) comprising of Quality Management System

(ISO: 9001), Environment Management System (ISO: 14001) and Occupational Health, Safety & Accountability Management System (ISO: 18001).

The Company has an internal control system commensurate with the size, scale and complexity of its operations. The scope of authority of the Internal Audit function is defined in the Internal Audit Charter. The Companys internal controls are tested for adequacy and effectiveness by the Internal Auditor and Statutory Auditors on a regular basis.

Enterprise Risk Management ("ERM")

The Company has a Board-level Risk Management committee which got reconstituted on July 18, 2019 to onboard larger group of independent directors with diverse set of expertise. The committee assists the board to oversee the risk management policy, to provide guidelines for implementing the ERM framework and also reviews the key risks and mitigation plan of the Company. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis, which forms part of this report.

Vigil Mechanism/ Whistle Blower Mechanism

Your Company has a well-defined Vigil Mechanism policy in place that provides a formal mechanism for all Directors, employees, business associates and vendors of the Company to approach the Ethics Counsellor / Chairman of the Audit Committee. The mechanism can be availed to make protective disclosures about any unethical behaviour, actual or suspected fraud or violation of the Tata Code of Conduct (TCoC).

During the year under review, no person has been denied access to the Chairman of the Audit Committee. In addition, Directors, employees, and vendors, may approach the Ethics Counsellor to make any such protected disclosure.

During FY 2019-20, the Company received 19 whistle blower complaints and all of the complaints were investigated and resolved at the end of the year. The Vigil Mechanism includes policies viz. Whistle Blower Policy, Gifts Policy, Anti Bribery Anti Corruption Policy, Anti Money laundering Policy, as adopted by theCompany,whichisavailableonthewebsiteoftheCompanyat https://www.tatasteellp.com/wp-content/uploads/2019/12/WB-Policy-for-Directors-Employees.pdf

Related Party Transactions:

In line with the requirements of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Policy on Related Party Transactions (RPTs) and the same can be accessed on the Companys website at https://www.tatasteellp.com/performance-corporate-governance/ All transactions with related parties (including material transactions) during FY 2019-20 were reviewed and approved by the Audit Committee and were at arms length and in the ordinary course of business. Prior omnibus approval was obtained for RPTs which were of repetitive nature and entered in the ordinary course of business and on an arms length basis. The transactions entered into pursuant to the omnibus approval so granted were reviewed by Audit Committee on quarterly basis. There were 6 (six) material RPTs in FY 2019-20 under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of transactions with related party as per Form AOC-2 are provided in Annexure – "E" to this Report.

Details of RPTs entered into by the Company, in terms of Ind AS-24 are disclosed in notes to the standalone/consolidated financial statements forming part of this Integrated Report. There was no other material RPTs entered into by the Company with its Promoters, Directors, KMPs or other designated persons during FY 2019-20, except those reported in the financial statements. None of your Directors or KMPs had any pecuniary relationships or transactions with the Company during FY 2019-20.

Approval of Members is being sought for 9 (nine) material RPTs for FY 2020-21 and FY 2021-22 at the ensuing AGM.

Prevention of Sexual Harassment at Workplaces

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder.

Further, the Company has an Internal Complaint Committees for various locations of the Company in compliance with the above mentioned Act and Rules. During the financial year 2019-20, the Company had received two complaints of sexual harassment, out of which one complaint has already been resolved by taking appropriate action. One complaint is under investigation.

Directors Responsibility Statement

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the Internal, Statutory, Cost and Secretarial Auditors and external consultant(s) including audit of internal financial controls over financial reporting by the statutory auditors, reviews performed by the management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companys internal financial controls were adequate and effective during the financial year 2019-20.

Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of its knowledge and ability, confirm that:

(i) In the preparation of annual financial statements, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(ii) They have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2019-20 and of the loss of the Company for that period;

(iii) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) They have prepared the annual accounts on a going concern basis;

(v) They had laid down proper internal financial controls and such internal financial controls are adequate and were operating effectively;

(vi) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Governance Guidelines

The Companys governance guidelines on Board effectiveness cover aspects relating to composition and role of the Board, Chairman and Directors, Board diversity, term of Directors, retirement age and committees of the Board. The guidelines also cover key aspects relating to nomination, appointment, induction and development of Directors, Directors remuneration, oversight on subsidiary performances, code of conduct, Board effectiveness reviews and various mandates of Board Committees.

Business Responsibility Report

Pursuant to Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report (BRR) on initiatives taken from an environmental, social and governance perspective, is enclosed as Annexure "F" and is also available on the Companys website, https://www.tatasteellp.com/ performance-corporate-governance/

Subsidiary Company

The Company has a wholly owned subsidiary i.e. "TSIL Energy Limited". There is no associate or joint venture company as defined under the Companies Act, 2013. Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 and the amendments thereto, and the SEBI Listing Regulations, a statement containing salient features of the financial statements of TSIL Energy Limited in Form AOC-1 is annexed as Annexure "G".

Further, pursuant to provisions of Section 136 of the Companies Act, 2013, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts of TSIL Energy Limited are available on the website of the Company at https://www.tatasteellp.com/subsidiary-information/

Auditors

(a) Statutory Auditors

Pursuant to the provisions of Section 139 of the Companies Act, 2013, read with Companies (Audit and Auditors) Rules, 2014, as amended from time to time, Messrs. Price Waterhouse & Co. Chartered Accountants LLP (Firm Registration Number: 304026E / E300009) (‘PWC), were appointed as statutory auditors from the conclusion of the Thirty fourth Annual General Meeting ("AGM") held on August 04, 2017 for a period of 5 years commencing from the conclusion of the Thirty fourth AGM held on August 04, 2017 until the conclusion of the Thirty-ninth AGM of the Company to be held in the year 2022.

In terms of the provisions relating to statutory auditors forming part of the Companies Amendment Act, 2017, notified on May 7, 2018, rati_cation of appointment of Statutory Auditors at every AGM is no more a legal requirement. Accordingly, the Notice convening the ensuing AGM does not carry any resolution on rati_cation of appointment of Statutory Auditors.

The report of the Statutory Auditor forms part of the Integrated Report and Annual Accounts 2019-20. There is no Audit qualification, reservation, adverse remark or disclaimer for the year under review.

(b) Cost Auditor

Pursuant to the provisions of Section 148 of the Companies Act, 2013 ("the Act"), read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the Company is required to maintain cost records and have the audit of its cost records conducted by a Cost Accountant. Pursuant to Section 148(1) of the Act, the Company has been maintaining cost records and carrying out cost audit every year. The Cost Audit Report of the Company for the Financial Year ended March 31, 2019 was filed by the Company in XBRL mode.

The Board of Directors, on the recommendation of Audit Committee, has appointed Messrs. Shome & Banerjee, Cost Accountants, (Firm Registration Number: 000001) as Cost Auditor to audit the cost statements of the Company for the financial year 2020-21.

Messrs. Shome & Banerjee have vast experience in the field of cost audit and have been 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 and Auditors) Rules, 2014, rati_cation of the remuneration payable to the Cost Auditors (as recommended by the Audit Committee and approved by the Board) is being sought from the Members of the Company at the ensuing AGM. The details of the same are provided in the Notice convening the AGM. We seek your support in ratifying the proposed remuneration of Rs. 6 lakh plus applicable taxes and reimbursement of out-of-pocket expenses payable to the Cost Auditors for the Financial Year ending March 31, 2021.

(c) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed Messrs. S. M. Gupta

& Co., a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company for the financial year 2019-20.

The Secretarial Audit Report for the financial year 2019-20, is annexed herewith as Annexure – H . There are no qualifications, observations, adverse remark or disclaimer in the said Report.

The Board has also appointed Messrs. S. M. Gupta & Co., as Secretarial Auditor to conduct the Secretarial Audit of the Company for Financial Year 2020-21.

Comments on Statutory Auditors Report/ Secretarial Audit Report

There are no qualifications, reservations or adverse remarks or disclaimers made either by the Statutory Auditors or by the Secretarial Auditors in their report for the year under review. During the year under review, the Auditors did not report any matter under Section 143(12) of the Companies Act, 2013, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Companies Act, 2013.

Extract of Annual Return

The extract of annual return in Form MGT 9 as required under Section 92(3) of the Companies Act, 2013 and Rule

12 of the Companies (Management and Administration) Rules, 2014 is enclosed as Annexure "I" and can be accessed in ‘Investors section of the Companys website at https://www.tatasteellp.com/extracts-of-annual-return/

Disclosures with Respect to Employees Stock Option Scheme

The Company does not have any Employees Stock Option Scheme.

Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

As required under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014, the particulars regarding conservation of energy, technology absorption, foreign exchange earnings and outgo are annexed to this report as Annexure J.

Particulars of Loans, Guarantees or Investments by the Company

The details of loans, guarantees or investments, are annexed to this report as Annexure K.

Awards

During the year under the review, the following awards were received by the Company:

(i) The Company was adjudged as the "Best Governed Company" [Emerging Listed Entity Segment] at the 19th ICSI National Awards for Excellence in Corporate Governance, 2019.

(ii) The Company has received ‘Honourable Mention certificate under the National CSR award, 2019.

(iii) The Tata Afirmative Action Programme (TAAP) awards for emphasises on our endeavours on 5 Es – Employment, Employability, Entrepreneurship, Education and Essential Enablers.

Deposits From Public

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

Listing Fees

The Annual Listing Fee for the year 2019-20 has been paid to the Stock Exchanges where the Companys shares are listed.

Industrial Relations

During the year under review, industrial relations remained harmonious and cordial.

Significant and Material Orders Passed by the Regulators or Courts

There have been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Companys future operations. However, Members attention is drawn to the statement on contingent liabilities, commitments in the notes forming part of the Financial Statements.

Secretarial Standards

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

M. Acknowledgement

Your Directors take this opportunity to thank all its Stakeholders, i.e. Members, Customers, Vendors, Dealers, Investors, Business

Associates and Bankers, for their continued support during the year. They place on record their deep sense of appreciation for the contribution made by Senior Leadership team and employees at all levels across the organisation. The resilience to meet and successfully overcome several challenges was possible due to their hard work, solidarity, co-operation and support. Your Directors also express their gratitude towards Government of India, Governments of various States in India, concerned Government departments & agencies and regulatory authorities for their continued support and we look forward to their guidance in the future.

On behalf of the Board of Directors
Sd/-
T.V. Narendran
Place: Jamshedpur Chairman
Date: June 09, 2020 (DIN: 03083605)