Management Discussion & Analysis

l) Statutory Compliance
On obtaining confirmation from the various units of the Company of having complied with all the statutory requirements, a declaration regarding compliance with the provisions of the various statutes is made by the Managing Director at each Board Meeting. The Company Secretary ensures compliance with SEBI regulations and provisions of the Listing Agreement. The Group Chief Financial Officer as the Compliance Officer for prevention of insider trading ensures compliance with the Tata Guidelines on Insider Trading.

Contingent Liabilities
Details of contingent liabilities are given in Schedule M of the Notes on Balance Sheet and Profit and Loss Account.

m) Safety
The Group is committed to ensuring safety of its employees, plant and its surrounding community at all its operation sites. For the last few years, Tata Steel has taken help from M/s. DuPont Safety Resources for establishing safety culture by inculcating safe behavior amongst its employees. This has helped the Company to reduce its LTIFR (Lost Time Injury Frequency Rate) to its best ever figure of 1.7 during the current year. Reduction in LTIFR need not essentially reduce the fatalities at the workplace. It is being addressed separately through Fatality Risk Control Protocol which aims at eliminating the hazards of fatality potential. e.g. Helper less driving in the heavy vehicles.

For sustainability of the operations, process safety needs to be strengthened. Tata Steel has decided to implement Process Safety & Risk Management (PSRM) in high hazardous operations and launched the PSRM initiative in two of its major departments viz. Coke Plant and L. D. Shop. Tata Steel also tied up with the premier institution of IIT Kharagpur to design and offer a high value short-term programme on process safety as offered at Texas University for our executives.

Realising the importance of Community Safety, the management started working with SAFE organisation and engaged the Consultants, M/s. Humbert Ebner India Pvt.Ltd. to take up the drive to systematically imbibe safety knowledge into school children in Jamshedpur and at its Mines and Collieries. This initiative has been taken by the company for generating an awakening in the community and produce positive results within the next few years benefiting both Tata Steel and the community.

Corus continued to focus on health and safety performance as a key priority. A new three-year plan was launched in February 2008 supporting the corporate citizenship benchmark. The number of serious incidents as measured by lost time injury frequency rates continued to fall in FY 2007-08 reaching for employees in the year compared to in Corus prior to acquisition.

The Company has co-created a group vision to reach the LTIFR of 0.4 by 2012.

n) Environment Management
Tata Steel
Tata Steel is committed to address the climate change issues by continuously reducing Carbon dioxide (CO₂) emissions. The CO₂ emission was brought down by 4.2% in the reporting period to 2.04 t/tcs in 2007-08. The Company is vigorously pursuing CDM (Clean Development Mechanism) Projects for availing carbon credit which are at various stages of approval and implementation. Tata Steel has enthusiastically participated in the Steel Task Force initiatives of Asia Pacific Partnership on Clean Development and Climate (APPCDC) under the aegis of Ministry of Steel, Government of India.

Dust emission from stacks reduced by 11.5% in 2007-08 to 0.86 kg/tcs due to eliminating coal burning for power generation, improved recovery of by-product gases and stringent surveillance of pollution control equipment.

In the reporting period, solid waste utilisation has been improved to 86%. The trials of LD slag as soil conditioner were found successful. Reclamation and tree plantation measures continued at Steel Works and other divisions of the steel company.

Initiatives for FY 2008-09

Item	Key Initiatives
Reduction of CO₂ Emission	Maximise recovery and utilisation of by-product gases Increase energy efficiency at process units Implement identified CDM Projects
Reduction of Dust Emission	Upgradation of Electrostatic Precipitators in existing units
Water Conservation	Commissioning of Sunsungarial and Garam nalla water recycling projects. Increase intake of recycling water from Bara Ash Pond Area
Solid Waste Utilisation	Increase in BF Slag granulation and utilisation. Increase sale of BOF Slag for productive use.

Corus Group
Corus believes that respect for the environment is critical to the success of its business. It is committed to minimising the environmental impact of its operations and its products through the adoption of sustainable practices and continuous improvement in environmental performance. To implement its environmental policy, systems are in place that focuses on managing and minimising the effects of operations. 100% of Corus’s manufacturing operations are certified to the independently verified international environmental management standard, ISO 14001.

Climate change is one of the most important issues facing the world today. Corus recognises that the steel and aluminium industries are significant contributors to man-made greenhouse gas emissions as the manufacture of steel produces carbon dioxide (CO₂), and the manufacture of primary aluminium generates both CO₂ and perfluorocarbons (PFCs). On emissions, Corus wants to demonstrate that it will be part of the climate change solution, reducing its CO₂ footprint by at least 20% by 2020.

Corus has made a voluntary agreement with the Dutch government to benchmark its energy efficiency against world-best standards. In the UK, an agreement has been negotiated with the government to reduce total energy consumption by 14.7% compared to 1997 levels by 2010. In February 2008 Corus announced an investment of £60 million in energy management technology at its Port Talbot site, an investment that will reduce CO₂ emissions. In addition to these improvements, Corus is also working with other steelmakers in Europe on a major research and development project, ULCOS with the ambitious objective of reducing carbon emissions by 50% by 2050.

The EU Emissions Trading Scheme (EU ETS) came into force on 1st January, 2005. The scheme currently focuses on CO₂ emissions and applies to various production processes, including those used in the production of steel. Each EU member state has its own nationally negotiated emission rights allowance, which is allocated back to CO₂ emitting sites. Sites have permission to emit CO₂ up to the value of their rights allocation. Any surplus can be sold and any deficit can be purchased on the emission rights market. Phase 1 of the EU ETS covered 2005 to 2007 and Phase 2 covers 2008 to 2012, with usage of rights being externally verified and reconciled annually. Failure to possess adequate rights to match emissions was penalised at €40 per tonne of CO₂ in Phase 1, increasing to €100 per tonne in Phase 2, plus the cost of purchasing these rights. The Phase 2 emission rights trading price at the end of March 2008 was approximately €24 per tonne.

Corus met its environmental obligations in Phase 1 of the EU ETS and expects to do the same in Phase 2. CO₂ allocations to Corus under the UK National Allocation Plan (NAP) broadly reflected its requirements for Phase 1. Under the Dutch NAP for Phase 1, Corus was short of rights for Phase 1, although overall Corus was in surplus for Phase 1. Phase 2 allocations have been determined for both the UK and the Netherlands and, whilst these will provide a significant challenge, overall they should again be broadly sufficient to meet requirements with the UK in surplus and the Netherlands in deficit. Any deficit in emission rights in the Netherlands has been and will be met in the first instance from any surplus in the UK.

Continued attention is being given to development of products that have a better environmental profile or that have inherent environmental advantages. For example, to help automotive manufacturers reduce the weight of their vehicles in order to make them more fuel efficient and more environment friendly. Some of these developments are discussed in the Technology section.

Corus aims to contribute positively to the communities around or near to its operations. Apart from providing employment for many thousands of people, it actively participates in community initiatives and encourages biodiversity and nature conservation.

NatSteel
Towards its contribution to corporate social responsibility, NSA has invested around S$20 million in plant and equipment for energy conservation, recycling and pollution and waste reduction. NatSteel Asia’s corporate philosophy embraces community giving and responsible environmental stewardship. NatSteel Asia actively upholds a comprehensive Environment, Safety and Health policy to:

Maintain high environmental, occupational safety and health standards through a regular system of risk assessment and management
Be energy efficient
Reduce, reuse or recycle, improve environmental, occupational safety and health performances, through R&D, training, and periodic review
Promote best practices in these area