Objective

Study in detail about the hr policies of mittal steel in detail

Methodology

Secondary data analysis

Mittal Steel Company

2

Mittal Steel Company, N.V.

Type Industry Successor(s) Founded Headquarters Key people Products Revenue Operating income Net income Employees Website

Public Steel ArcelorMittal 1976 in Calcutta, India, 1989 as Ispat International in Sumatra, Indonesia Rotterdam, Netherlands Lakshmi Mittal, Founder, Chairman and CEO Steel, Flat Steel products, Coated Steel, Tubes and Pipes $28.132 billion USD Year to 31 Dec 2005 $4.746 billion (2005) $3.365 billion (2005) 320,000 (2006) Mittal Steel

Mittal Steel Company N.V. was one of the world's largest steel producers by volume, and also one of the largest in turnover. The company is now part of ArcelorMittal. CEO Lakshmi Mittal's family owned 88% of the company. Mittal Steel was based in Rotterdam but, managed from London by Mittal and his son Aditya. It was formed when Ispat International N.V. acquired LNM Holdings N.V. (both were already controlled by Lakshmi Mittal) and merged with International Steel Group Inc. (the remnants of Bethlehem Steel, Republic Steel and LTV Steel) in 2004. On 25 June 2006, Mittal Steel decided to takeover Arcelor, with the new company to be called ArcelorMittal. The takeover has been successfully approved by shareholders and directors of Arcelor making L.N. Mittal the largest steel maker in the world.

History

In 1989, the company acquired Iron & Steel Company of Trinidad & Tobago. In 1992, the company acquired Sibalsa. In 1994, the company acquired Sidbec-Dosco. In 1995, the company acquired Hamburger Stahlwerke, which formed Ispat International Ltd. and Ispat Shipping, and Karmet. In 1997, the company acquired Walzdraht Hochfeld GmbH and Stahlwerk Ruhrort. In 1997, the company went public as Is pat International NV. In 1998, the company acquired Inland Steel Company. In 1999, the company acquired Unimtal. In 2001, the company acquired ALFASID and Sidex. In 2002, the company signed a Business assistance agreement with Iscor. In 2003, the company acquired Nowa Huta. In 2004, the company acquired Polskie Huty Stali, BH Steel, and certain Macedonian facilities from Balkan Steel. In 2005, the company hired Deloitte as the primary auditors for the company. In 2005, the company acquired International Steel Group. In 2005, the company acquired Kryvorizhstal. In 2005, the company announced the investment of $9 billion in Jharkhand, India . In 2006, the company merged with Arcelor after much controversy. In 2006, the company announced Investment for 12 million tonnes capacity steel plant in Orissa, India. In 2009, the company Acquired a 34% stake in Uttam Galva.

Bids and acquisitions

In October 2005 Mittal Steel acquired Ukrainian steel manufacturer Kryvorizhstal for $4.8 billion in an auction after a controversial earlier sale for a much lower price to a consortium including the son-in-law of ex-President Leonid Kuchma was cancelled by the incoming government of President Viktor Yushchenko. In 2005 Lakshmi Mittal flew into Jharkhand, India to announce a $9 billion investment to build a green field steel plant with a 12 million tonnes per annum production capacity. On 27 January 2006 it announced a $23.3 billion (18.6 billion, 12.7 billion) bid for Arcelor. On 19 May 2006 Mittal increased its offer for Arcelor by 38.7% to $32.4bn, or $47.34 per share (25.8bn, 37.74 per share). On 25 June 2006 Arcelor, in a board meeting announced that it has accepted a further sweetened offer ($50.68 or 40.4 per share) and the new company would now be called Arcelor Mittal, thus successfully ending one of the most controversial and publicised takeover bids in modern corporate history. Arcelor Mittal is now by far the largest steelmaker in the world by turnover as well as volume, controlling 10% of the total world steel output. Differential Efficiency & Financial Synergy: Theory of Mergers Operating Synergy & Pure Diversification: Theory of mergers Costs and Benefits of Merger Evaluation of Merger as a Capital Budgeting Decision Calculation of Exchange Ratio
5

MAJOR ACQUISITION IN INTERNATIONAL MARKET TATA STEELS ACQUISITION OF CORUS India inc. is on a foreign acquisition spree and Tata steel is leading the pack. The India steel major has successfully bagged quite a few companies in Asia. Recently, it has acquired Corus, the biggest steel company in the uk. Corus was formed after the merger between British steel and Dutch group hoogovens in the year 1999. Corus is the ninth largest steel company globally and leads the market position in construction and packaging in Europe. Tata steel initially offered $7.64 bn in cash for the acquisition of the uks largest steel company. But corus has accepted the deal at euro 4.3bn [$8.1bn]. tata has offered 455 pence per share and pledged to contribute euro126 mn to the corus pension fund as part of the deal. They will also increase the annual contributions to the british steel fund. There are a few risks in this deal. The foremost risk is that tata steel will have to pay off huge debt of euro bn ,if there is an economic downturn in future. Tata group have taken euro1bn of the debt for buying corus. The fast changing global steel industry is witneesing the increasing trend of consolidation and this take over is done at the right time with the right partner for right terms. ARCELOR Arcelor was formed on February 19,2001 with the merger of the three European group: the French usinor, Spanish aceralia and the Luxembourg arbed. It is registered in Luxembourg and listed on various stock exchanges on February 18,2002. in
6

order to maximize the generation of cash and to ensure the sustained profitability, it designed its business model by mainly focusing on building position in high margin products.

WITHIN four year of its establishment, arcelor has not only crossed its targets but also bolstered its position in the field of production and supply of high value-added steel. It became the lead supplier of steel to the automotive, house appliances, construction, packaging sector and general industries. It has strengthened its position in carbon steel, especially more so in automotive steel. The key strategy of arcelor in international development is to maintain balance between high growth emerging markets and supporting multinational clients. INDUSTRY BACKGROUND

More than a hundred year old steel industries has grown strongly and steadily through the decades steel industry witnessed a significant restructuring in the last 15 years mainly due to decline in the demand from the central and eastern Europe. During the 1990s, the industry observed restructuring with the marked regional consolidation among European Union producers. The saga of arcelor-mittal merger On January 27, 2006 mittal stunned the global steel industry with the launch of a surprise bid for its nearest rival arcelor with an unsolicited offer of euro18.6bn. Mittal made an offer of 4 mittal shares plus
7

35.25cashfor every five shares of arcelor. The alternative offer were stock offer of 16 mittal shares for 15 arcelor shares or cash offer 28.21 for each arcelor share and the proration of aggregate consideration was 25%cash and 75% stock. Mittal kept few conditions in his offer that there should be a minimum accepted of more than 50%and also no change in the arcelor substance during the offer. In addition to this condition, mittal also wanted to sell Dofasco to ThyssenKrupp for 3.8 bn. Mittal was ready to reimburse the payment of break fee by arcelor to dofasco and the earning of dofasco before its sale will be transferred to the combined group. The latest bid offers 13Mittal shares plus 150.6 cash for 12 Arcelor share with an option to receive more cash or shares subject to 13 % cash and 69% stock in aggregate. However, both the companies have not yet come to a consent regarding Canadian steel maker Dofasco that arcelor acquired in January 2006. Under the agreement, the merged firm will be called Arcelor Mittal. Arcelir investors retain 50.5% ownership. Mittal family, which held 875 share capital and a lock-upper of five years, subject to certain exceptions. Regardless of holding period, all the shareholders will have identical voting and economic rights, i.e. one vote for one share. Kinsch of arcelor will become the chairman and LN Mittal will be the president of the arcelor Mittal wherein, LN Mittal will be from Mittal Steel, three representatives of Arcelor shareholders and three representatives of employees. After three years, the shareholders will be electing their Board of directors. The management board will be comprised of seven executive among which, four executives will be from Arcelor, three executives will be from Mittal Steel and the chairman of the new company will propose the CEO. The Best Combination

Arcelor is the number one steel number one steel company by revenue whereas Mittal is the number one steel company in terms of shipments. the combination of these two top companies leads the consolidation to new to new level making Arcelor Mittal as the Numero Uno. The combined company will immediately achieve industry leadership by dwarfing other steel makers with the production capacity of over 120 million tons a year which is approximately 10% of global steel production. It will produce three times more than capitalization of $46 bn. The new company with its 61 plants in 27 countries will lead the major markets like North America, South America, Western Europe, Eastern Europe and Africa.

Mittal Steel and Arcelor are quite complimentary in their business leading to a minimal overlap in geographic and product fit. In the US Mittal steel is the leading supplier to the packaging, appliances and automotive sector with strong R&D and in the European market arcelor enjoys the similar position. Mittal Steels mills produce lower-quality steel that is generally sold in open market while Arcelor focuses on high-quality steel for long-term customers. Mittal Steel Forms Two Joint Ventures with ONGC Published on July 25, 2005 at 12:14 PM ONGC Group has established two overseas joint venture companies, with the worlds largest steel group Mittal Steel. The two Fortune-500 corporate entities are expected to synergise each others strengths to promote energy security for India with global resources. With very limited domestic hydrocarbon resources, securing equity Oil and Gas from abroad is Indias only sustainable option to fuel the growth of its developing economy. This MoU is seen as the beginning of that journey, where the Mittal Group will bring in its clout in the hydrocarbon rich countries (in
9

Central Asia and Africa) where it operates, to facilitate obtaining equity Oil and Gas. Two overseas joint venture companies have been established as a result of the MoU inked on 23rd July. Both of these will be registered outside India - in a European Union country - for tax management purposes. One of the joint ventures is between ONGC Videsh Limited (OVL) and Mittal Investments Sarl (the controlling shareholder of Mittal Steel company N.V. and wholly owned by Mr. Lakshmi N Mittal and family). This Joint Venture ONGC Mittal Energy Limited (OMEL) - will work to source equity Oil and Gas in various countries. 98 per cent of the equity of this Joint Venture will be held by OVL and Mittal in 51:49 ratio; the balance 2 per cent will be with financial institutions. The second joint venture, between ONGC and Mittal Investments Sarl, is called ONGC Mittal Energy Services Limited (OMESL). This will for trading and shipping of Oil and Gas (including LNG) sourced through the other Joint Venture. The shareholding pattern in this second joint venture will be similar as the first one.

Addressing a Press Conference organized in New Delhi just after the signing of the MoU, Mr. Lakshmi N Mittal told journalists that more than half a dozen countries, where his steel projects are running, have good business opportunities in Oil and Gas. Our experience in such countries and our exposure to commodity business is expected to help ONGC in meeting the national energy needs. The Honble Minister of Petroleum & Natural Gas and Panchayati Raj Mr. Mani Shankar Aiyar said that though the Krishnamurthy Committee has not favoured the merger of Oil PSEs, the Indian Oil industry wants to fuse the energies of all sectors - public and private, domestic and foreign for a larger national cause of energy security. The Minister said that the coming together of the two giants the largest corporate in the private sector Mittal Steel and the largest corporate in the public sector ONGC - will help in raising the colossal capital to attain energy security for the country. Mr. L N Mittal is an unusual Indian who thinks global. Mr. Subir Raha is a visionary manager, capable of thinking out-of-the-box
10

and reaching out to the stars. Given these, I am optimistic about ONGC and Mittal Steel restoring India to the vanguard of global powers.Lauding the role domestic E&P companies like ONGC, the Minister said that the Bay of Bengal is a great treasure house of Natural Gas. However, even in the most optimistic scenario, the country will need to access Natural Gas from abroad, if it wants to grow as per the projections of 8 per cent or even beyond that. Additional Secretary in MoP&NG Mr. M S Srinivasan said this synergy between the two titans ONGC: Indias showpiece to the world and Mittal Steel: the steel-makers to the world will help India in the global arena while sourcing equity Oil and Gas. Mr. Subir Raha said that launch of this private public partnership has a crucial message celebration of Indias entrepreneurship, in India and in the world. Given the unstinted support and guidance of the Honble Minister and the Government of India and the commitment of both the organizations, I am quite confident that we will be able to take very important and substantive steps forward to obtain energy security for India. So, where we stand today, we look forward to the future with great optimism and confidence in our collective capability and synergy to Make Tomorrow Brighter.

Mittal Steel floats joint venture with Total, Lukoilnews 12 December 2006 Mumbai: Mittal Steel, the world's largest steel company, headed by L N Mittal, which had last year announced its entry into oil and gas business through two joint ventures with the Oil and Natural Gas Corporation (ONGC), has now entered into separate deals with Total of France and Lukoil of Russia for acquisition of oilfields in Africa and Central Asia. Mittal Steel has already on its own picked three per cent stake
11

in Chevrons under-construction $6 billion Okolona Liquefied Natural Gas (OK-LNG) project in Nigeria. The OK-LNG field is expected to produce 4.5-million tonnes per annum of LNG. Mittal Steel is also looking at taking stake in big oil and gas projects in Africa and Central Asia. Steel tycoon Lakshmi Mittal who is not happy with the progress of ONGC-Mittal Energy Services Ltd (OMESL), a joint venture company that was to trade and ship oil and gas, including LNG, is showing the first signs of falling apart of the pact, industry sources said. In June, this year, Mittal Steel had signed a pact with Total to jointly acquire oil and gas properties, particularly in Africa, and trade in oil and gas produced from such fields. The company also entered into an agreement with Lukoil for specific acquisitions in Central Asia, particularly in Kazakhstan, last month. ONGC-Mittal Energy Ltd (OMEL) has landed three oil blocks in Nigeria, but progress on OMESL had been slow due to ONGC''s new management losing interest in the venture. ONGC, meanwhile, has signed a deal with the Hinduja group for sourcing of LNG and is negotiating an OMEL-type agreement with the multi-billion dollar group.

ArcelorMittal & IndiaBulls to start joint venture mines in India Posted on September 17, 2010 September 07,2010 Arcelor Mittal, the worlds largest steelmaker & Indiabulls Real Estate are planning to form a joint
12

venture to acquire iron-ore and coal mines in India. Gagan banga the Executive director of India Bulls said to newspapers that The joint venture will look at all mining opportunities in India, while for captive purposes, coal and iron ore are the two minerals we will be interested in. The companies not yet specified the investments that they are going to invest in their business. ArcelorMittal planning to build a six-million-tonnes-ayear steel plant in the southern Karnataka state for that they ready to spend $6.5 billion. Its plans for steel projects in eastern India are yet to take off. India bulls Real Estate subunit Indian bulls power is building several coal-fired power plants in several parts of India & 8.8% of India bulls Power has already owned by arcelor mittal according to june30 report given by stock exchange. Arcelor Mittal, the worlds largest steelmaker& India bulls Real Estate are planning to form a joint venture to acquire iron-ore and coal mines in India. Gagan banga the Executive director of IndiaBulls said to newspapers that The joint venture will look at all mining opportunities in India, while for captive purposes, coal and iron ore are the two minerals we will be interested in. The companies not yet specified the investments that they aregoing to invest in their business. Arcelor Mittal planning to build a six-million-tonnes-a-year steel plant in the southern Karnataka state for that they ready to spend$6.5 billion. Its plans for steel projects in eastern India are yet to take off. Indiabulls Real Estate subunit Indianbulls power is buildingseveral coal-fired power plants in several parts of India & 8.8% ofIndiabulls Power has already owned by arcelor mittal accordingto june30 report given by stock exchange

13

Hr policies of mittal

Innovation R&D
Innovation is a mindset at ArcelorMittal. Not only are we the largest steelmaker by volume but we offer the broadest range of steel grades, new steel products, steel solutions and cuttingedge technologies. Close cooperation with customers involving mutual trust, an open-minded approach and permanent exchanges of personnel - helps foster the spirit of innovation, enabling us to develop the products and solutions that will meet their ever-growing demands. Over the longer term, we continue to work at Cutting-edge steel products, solutions and process technologies

14

Training and Development

Learning is a continual process in DuPont. As your career progresses, there are opportunities to enhance your professional and personal skills. A formal process, known as Targeted Development, helps you and your supervisor in planning your development to meet both business and personal goals. DuPont recognizes the effectiveness of experiential learning and values "on-the-job training as a primary means of development. The company's collaboration with many leading universities, research institutions, companies, and industry & professional organizations also often present unique developmental experiences. Formal training is another important avenue for gaining new skills. Each business within the company has ongoing training programs that are designed specifically to maximize the performance of its employees in meeting business objectives. The DuPont University taps on the expertise of external training providers and the company's own functional experts to offer a wide range of courses in areas such as Leadership & Management, Sales &Marketing, Finance, Manufacturing, Human Resources, Information Technology, Personal Skills, and Safety & Health. Other development opportunities include training sessions and seminars presented by industry or professional organizations. DuPont also offers a program that provides financial assistance to employees pursuing courses at academic institutions

Operating with Integrity

How we deliver results is as important as the results themselves. Mittal seeks to lead in workplace and marketplace integrity by respecting the human rights of everyone touched by our business, and by enforcing legal and financial compliance. These commitments are detailed in our integrity policy, The Spirit & The Letter, which every employee supports with a signed pledge. They are further enabled by our ombudsperson process, which encourages any employee to report integrity concerns without fear of reprisal.

15

Rewards and benefits

Mittal strives to provide competitive employee benefits packages in the regions and industries in which we have a presence. Our wide range of employee services, retirement, health and other benefit plans are designed to help eligible employees make the best decisions for themselves, their family, and their

Lifestyle
Mittal offers innovative programs to help our eligible employees gain more value from their healthcare benefits. Through Health Ahead, mittal has further committed to improve the health of our employees and their families by creating a 'culture of health' which will deliver onsite and on-line programs, education, tools and services. We have also developed a global, industry-leading site certification program that will recognize excellence in worksite health

Learning and leadership

GE believes in developing the talent of new employees with programs designed to give in-depth experience and build skills that are crucial to our long-term success. Our heritage is built on continuous learning, which is why we invest more than $1billion annually in training and education offerings. In addition to the GE Global Learning Program, employees can take advantage of tuition reimbursement benefits to help improve their skills, grow their career, or get a loan to help pay for their familys higher education. Naturally, the passion that our people bring to their work
16

extends to their own private worlds, and GE is committed to enabling a healthy balance between the two. GE encourages our people to meet their work commitments while balancing their own life responsibilities. To support this balance, flexible work arrangements are an integral part of the way we conduct business. The Company also offers many programs and resources to support employees including financial management, family counselling and more.

Special Benefits provided for Employees

Medical facilities Free medical facilities for employees and their family, which continues even after retirement. Housing facilities: Subsidised electricity, housing facilities to all employees. Higher studies

water

and

Monetary incentives to employees acquiring higher qualifications in a related field along with study leave, scholarships etc. when necessary. Holiday Homes: Tata Steel has five holiday homes for benefit of employees during vacation.

Developing People
Valuing its people as a great asset, Tata Steel is committed to their development, both in order to benefit the individual and to benefit the Company through increased knowledge and skills. In order to leverage maximum potential of human resource to achieve business objectives the Company recognizes that enrichment of people will help retain a motivated workforce in a competitive environment.

Skills Development - Non-officers

17

Skill training is a process that begins at the time of an employee joining the company and continues throughout his or her career. Employees work in clusters of multi-skilled workers and move across and within clusters on improving their skills levels. The Technical Training Institute imparts vocational and basic skills training; the departments impart on-the-job training. In order to promote self-directed learning, the Company has introduced e-learning whereby employees can access electronic courses from their departmental e-Learning centres.

Skills Development
Officers Tata Steel Management Development Centre conducts a number of managerial and functional competency based programmers for officers and supervisors. The objectives of these programmers are: To build individual capability by enhancing managerial and functional competencies which are critical to operations, service and support functions. To build a leadership pipeline in the organization to prepare the people to meet the challenges of growth, globalization and change.

Equal Opportunities Practices

Mittal Steel is an equal opportunity employer and does not discriminate on the basis of race, caste, religion, colour, ancestry, marital status, sex, age or nationality. The Companys Affirmative Action Policy promotes equal access to its employment and opportunities and all decisions are merit based. Respect for equal opportunities asset out in the Tata Code of Conduct is followed. The HR Policy and Affirmative Action Policy are monitored by the Ethics Counsellor and supported by an effective grievance redressed mechanism. Tata Steel encourages female employees to advance their career with initiatives dedicated towards personal development and
18

professional advancement. The Women Empowerment Cell examines and addresses the issues and concerns of female employees and ensures that they do not miss out on any growth opportunity.

Freedom of association and collective bargaining

Mittal Steel respects the employees right to exercise freedom of association and collective bargaining and provides appropriate support for this. There is an established system of joint working and collective bargaining, which ensures that every employee is able to exercise this right without any fear. Pioneering the concept in India, a system of Joint Consultation has been in place in Tata Steel for more than 50 years. Policy are monitored by the Ethics Counsellor and supported by an effective grievance redressed mechanism. Tata Steel encourages female employees to advance their career with initiatives dedicated towards personal development and professional advancement. The Women Empowerment Cell examines and addresses the issues and concerns of female employees and ensures that they do not miss out on any growth opportunity.

Freedom of association and collective bargaining

Tata Steel respects the employees right to exercise freedom of association and collective bargaining and provides appropriate support for this. There is an established system of joint working and collective bargaining, which ensures that every employee is able to exercise this right without any fear. Pioneering the concept in India, a system of Joint Consultation has been in place in Tata Steel for more than 50 years.

Work Culture
Work culture encourages transparent channels of communication, open work environment, teamwork, and respect for new ideas and thoughts. New inductees are always encouraged to voice their ideas by their seniors. Peers facilitate the strength through their undying support and
19

encouragement. BHEL is the place where there is an occasion to celebrate every single day. Employees are treated like family members and it is made sure that support is extended to all those who require it

Recommendations Safe, Healthy and Happy Workplace

Creating a safe, healthy and happy workplace will ensure that your employees feel homely and stay with your organization for a very long time. Capture their pulse through employee surveys.

Open Book Management Style

Sharing information about contracts, sales, new clients, management objectives, company policies, employee personal data etc. ensures that the employees are as enthusiastic about the business as the management. Through this open book process you can gradually create a culture of participative management and ignite the creative endeavour of your work force.. It involves making people an interested party to your strategic decisions, thus aligning them to your business objectives. Be as open as you can. It helps in building trust & motivates employees. Employee self service portal, Manager on-line etc. are the tools available today to the management to practice this style.

Performance linked Bonuses

Paying out bonuses or compensation plan can
20

having any kind of variable be both an incentive and

disillusionment, based on how it is administered and communicated. Bonus must be designed in such a way that people understand that there is no payout unless the company hits a certain level of profitability. Additional criteria could be the team's success and the individual's performance. Never pay out bonus without measuring performance, unless it is a statutory obligation.

360 Degree Performance Management Feedback System

This system, which solicits feedback from seniors (including the boss), peers and subordinates, has been increasingly embraced as the best of all available methods for collecting performance feedback. Gone are the days of working hard to impress only one person, now the opinions of all matter, especially if you are in a leadership role (at any level). Every person in the team is responsible for giving relevant, positive and constructive feedback. Such systems also help in identifying leaders for higher level positions in the organization. Senior managers could use this feedback for self development.

Fair Evaluation System for Employees

Develop an evaluation system that clearly links individual performance to corporate business goals and priorities. Each employee should have well defined reporting relationships. Self rating as a part of evaluation process empowers employees. Evaluation becomes fairer if it is based on the records of periodic counselling &achievements of the employee, tracked over the year. For higher objectivity, besides the immediate boss, each employee should be screened by the next higher level (often called a Reviewer). Cross - functional feedback, if obtained by the immediate boss from another manager (for whom this employee's work is also important), will add to the fairness of the system. Relative ratings of all subordinates reporting to the same manager are another tool for fairness of
21

evaluation. Normalization of dimension of improving fairness

evaluation

is

yet

another

Knowledge Sharing
Adopt a systematic approach to ensure that knowledge management supports strategy. Store knowledge in databases to provide greater access to information posted either by the company or the employees on the knowledge portals of the company. When an employee returns after attending any competencies or skills development program, sharing essential knowledge with others could be made mandatory. Innovative ideas (implemented at the work place) are good to be posted on these knowledge sharing platforms. However, what to store & how to maintain acknowledge base requires deep thinking to avoid clutter.

Highlight performers
Create profiles of top performers and make these visible though company intranet, display boards etc. It will encourage others to put in their best, thereby creating competitive environment within the company. If a systems approach is followed to shortlist high performers, you can surely avoid disgruntlements.

Open house discussions and feedback mechanism

Ideas rule the world. Great organizations recognize, nurture and execute great ideas. Employees are the biggest source of ideas. The only thing that can stop great ideas flooding your organization is the lack of an appropriate mechanism to capture ideas. Open house discussions, employee-management meets, suggestion boxes and ideas capture tools such as Critical Incidents diaries are the building blocks that can help the Managers to identify & develop talent.
22

Reward Ceremonies
Merely recognizing talent does not work, you need to couple it with ceremonies where recognition is broadcast. Looking at the Dollar Check is often less significant than listening to the thunderous applause by colleagues in a public forum.

Delight Employees with the Unexpected

The last but not least way is to occasionally delight your employees with unexpected things that may come in the form of a reward, a gift or a well-done certificate. Reward not only the top performers but also a few others who are in need of motivation to exhibit their potential

TATA STEEL

23

In 1919 Lord Chelmsford named the city Jamshedpur in honour of its founder, Jamshedji Nausherwanji Tata, whose birthday is celebrated on 3 March as Founder's Day. J. N. Tata had written to his son Dorabji Tata about his vision of a great city in the area. On Founders Day, the 225-acre (0.91 km2) Jubilee Park is decorated with brilliant light work for about a week, attracting people from all parts of the nation. The city has several nicknames including 'Steel City' (which was referenced during TATA Steel's 'Green City - Clean City - Steel City' campaign); 'Tatanagar' after the name of its railway station Tatanagar Railway Station or simply 'Tata' in deference to the significant presence of Tata companies in the city and its adjoining areas. At the turn of the twentieth century, the Tata wanted to build a steel plant in India.

24

Jamshedji Tata went to Pittsburgh and asked geologist Charles Page Per in to help him find the site to build his dreamIndia's first steel plant. The search for a site rich in the resources needed for the plant, namely iron, coal, limestone and water began in April 1904 in today's Madhya Pradesh. The prospectors, C. M. Weld, Dorab Tata and Shapurji Saklatvala, took nearly three years in a painstaking search across vast stretches of inhospitable terrain to find a suitable location. One day, almost by accident they came across a village called Sakchi, on the densely forested stretches of the Choate Nagpur plateau, near the confluence of the Subarnarekha and Kharkai rivers. It seemed to be the ideal choice and the place was selected. Early development work was undertaken by Durrell & Co, a civil engineering firm run by Lawrence Samuel Durrell, the father of the naturalist Gerald Durrell (who was born here) and the novelist Lawrence Durrell. Commissioned by the Tata family in 1920, Durrell was responsible for building a tinplate mill, a brick-making plant, an office building, a hospital and over 400 workers' houses. Jamshedji's plan for the city was clear. He envisioned far more than a mere row of workers hutments. He insisted upon building all the comforts and conveniences a city could provide. As a result, many areas in the city are well planned and there are great public leisure places such as the Jubilee Park.

While building this beautiful city, Jamshedji Tata had said ... "Be sure to lay wide streets planted with shady trees, every other of a quick growing variety. Be sure that there is plenty of space for lawns and gardens; reserve large areas for football, hockey and parks; earmark areas for Hindu temples, Mohammedan mosques and Christian churches."

What the city looks like today is a testament to his visionary plans. Jamshedpur is the only city in India without a municipality. The responsibility for its conservation and
25

maintenance is entirely assumed by Tata Steel, very likely a unique situation in the world.

Legend has it that in the late 1980s when the state government proposed a law to end the Tatas' administration of Jamshedpur and bring the city under a municipality, the local populace rose in protest and defeated the government's proposal. In 2005, a similar proposal was once again put up by lobbying politicians. The target audience was the working class. A large majority of this sided with the government and set up protest meetings outside the East-Singh hum Deputy Commissioner's office. However, the objective was never achieved and Jamshedpur remains without a municipality till date- and the quality services continue. Geography Jamshedpur is located at 2248N 8611E / 22.8N 86.18E / 22.8; 86.18[4]. It has an average elevation of 135 metres (442 ft). Jamshedpur is located in a hilly region, and its terrain is quite uneven. Jamshedpur occupies about 2.03% of the total area of Jharkhand. Total geographical area of Jamshedpur is 149.23 km square. Climate Jamshedpur has a temperate climate. Summers start in midMarch and can be extremely hot in May and June. The temperature variation during summer is from 35 42C although the city has witnessed temperatures higher than this in recent years. On the other hand the minimum temperature during winters is 8C. In fact, the best time to pay a visit to the city is between October and April. During these months, the city even receives migratory birds. The climate of Jamshedpur is marked by south-west monsoon. Jamshedpur gets heavy rainfall from July to September and receives about 1200 mm of rainfall annually. As of 2001 India census,[ Jamshedpur had a population of 1,134,788 and ranks 28th among the 35 millionplus cities in India according to the census 2001.

26

Males constitute 53% of the population and females 47%. Jamshedpur has an average literacy rate of 82%, higher than the national average of 59.5%. In Jamshedpur, 11% of the population is under 6 years of age. The conversational language is Hindi. However tribal languages like Santali and Ho are also spoken in some parts of the city. The population is cosmopolitan in nature owing to migration of people from all over the country to work in the numerous industries present in the city.

Apart from the native tribal population the other ethno-religious groups are Bengalis, Biharis, Punjabis, Oriyas, Gujaratis, Marwaris and Muslims . There is a small but significant number of South Indians as well, principally from Andhra Pradesh; Tamil Nadu and Kerala.

Major festivals celebrated include Makar Sakranti, Durga Puja, Deepavali, Holi, Christmas, Id-ul-Fitr, Id-uz-Zuha and Chhath.Jamshedpur, as home to the first private Iron and Steel company of India(sixth largest in the world), Tata Steel, is commonly called "Tata Nagar" as a result of the company's significant presence. The areas surrounding Jamshedpur are rich in minerals, including iron ore, coal, manganese bauxite and lime.

It is a modern, industrial city; the main industries being iron and steel, truck manufacturing, tinplate production, cement and other small and medium scale industries revolving around these products. The largest factory is that of Tata Steel (the erstwhile Tata Iron and Steel Company or TISCO), and it is situated almost at the center of the city. Tata Steel is the largest iron and steel producing plant in India, as well as the oldest. Plans have been made for the expansion of Tata Steel's existing plant at Jamshedpur from 7 million tonnes per annum to 10 million tonnes per annum. It would then be the first plant in the world to have 10 million tonne capacity in a single campus.

27

Tata Steel plant in Jamshedpur The steel plant is large enough and still covers around a fourth of the land area of Jamshedpur, and has two inland water lakes. The other major factory in the city is Tata Motors with Telcon, which manufactures heavy vehicles and construction/earth moving equipment. Tata Motors was previously called The Tata Engineering and Locomotive Company (TELCO), as railway locomotives were once manufactured here. Tata Tinplate (the erstwhile Tinplate Co. of India Ltd.) manufactures tinplate. It was originally a British company built in Golmuri, later on taken over by Tata. Another factory, located near Tata Motors, is the Indian Steel and Wire products (ISWP). ISWP was reopened after more than five years by Tata Steel after surmounting all legal impediments and BFIR-related hurdles. ISWP resumed production in its wire mill on January 2, 2004, after its takeover by Tata Steel, and has commenced its rod mill operations. Several renowned industries, such as TRF Limited (Tata Robins Fraser), which manufactures bulk material handling and processing machines and other engineering goods, are located in Jamshedpur. Agrico, a subsidiary of Tata Steel, manufactures agricultural implements. Tata Yodogawa Ltd or Tayo manufactures rolls and dies for rolling mills. Praxair and British Oxygen Company (BOC), are producers of liquefied oxygen, nitrogen and other gases, they both have plants adjacent to the steel mill. Lafarge Cement, earlier Tata Cement, is located near Tata Motors. Along with the smokestacks of Tata Power, a coal fired captive power station that supplies a great deal of the city's electricity, it can be conspicuously seen from the railway tracks while coming to Jamshedpur by rail. Usha Martin located in adityapur is a wire rope manufacturing company. The presence of other companies like ABB, TCS, L&T, S&L, SMS, Danielle, and Italiam Pianti is a privilege for the city people. Most of the Small Medium Enterprises (SMEs) are located in the 'Adityapur Industrial Estate' which prior to NOIDA was Asia's largest Industrial hub. There are a number of mobile operators in Jamshedpur with the number substantially increased in recent times with the entry of new players
28

Major Happening:
Political: In the 1920s and 1930s, when it was still called Tata Iron and Steel Company, TISCO'slargely tribal workers fought pitched battles with the European or Paris management. Work conditions and the right to organize were important rallying issues, and over the years, the company developed a reputation for union-busting, often by violent means. The value of Dorabjis Expansion Programme came to be appreciated only during the phase when world was reeling under the pressure of the Great Depression. The Tatas survived the depression and supplied nearly of the countrys steel requirements. By the Second World War, Tatas production capacities had expanded enough to make their prices lower than those of steel produced in England raising them to an authoritarian position. By the 1980s, the government was clearly in control of what had come to be called the commanding heights of economy. More than 45% of output in organized industry came from the public sector as well as bank and other long-lending institution. In 1981-82, eight of the largest firms in India were in the public sector, as were 24 out of the top 30 in terms of total capital employee. In this sense it could be said that Nehrus goals when he had began the planning process had been achieved. But this success has to be seen in the context of the fact that industrial growth rates had lagged at about 4% per annum between 1964-65 and 1975-76. This rate was in sharp contrast to what was happening in the Asian economies and in Southeast Asia. These countries had achieved consistent high growth by opening up their markets and by abandoning policies of import substitution. Indira Gandhi in her second stint as prime minister was not willing to inaugurate a new industrial policy that departed from the socialist pattern put in place by her father.
29

Yet she was far too astute not to recognize the signs of crises that were waiting in the wings. She made the gesture that her government supports the expansion and modernization of the private sector. The basic elements of the new policy began to emerge against the back ground of the India Special Drawing Rights billion-dollar loan agreement with the International Monetary Fund to cope with the balance of payment deficits.

Profit & Loss account of Tata Steel

------------------- in Rs. Cr. ------------------Mar '11 Mar '10 Mar '09 Mar '08

Mar '07

12 mths 12 mths

12 mths

12 mths

12 mths

Income Sales Turnover 31,901. 26,757.60 94 26,843.53 22,191.43

19,756.8

30

Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses

2,594.5 1,816.95 9 29,307. 24,940.65 35 1,435.8 1,241.08 0 173.65 -134.97 30,916. 26,046.76 80

2,495.21 24,348.32 603.07 289.27 25,240.66

2,537.02 19,654.41 586.41 38.73 20,279.55

2,304.18

17,452.6 362.12 82.47

17,897.

9,395.9 8,356.45 2 1,558.4 1,383.44 9 2,618.2 2,361.48 7 2,905.1 2,419.89 6 501.96 417.90 1,529.7 1,287.04 3 -198.78 -326.11 18,310. 15,900.09 75 Mar '11 Mar '10

8,568.71 1,222.48 2,305.81 2,127.48 400.24 1,180.08 -343.65 15,461.15 Mar '09

6,063.53 1,038.77 1,589.77 1,654.96 247.77 1,029.30 -175.50 11,448.60 Mar '08

5,762.42

1,027.84

1,454.83

1,561.40 244.92 805.99 -236.02

10,621.3

Mar '07

12 mths 12 mths

12 mths

12 mths

12 mths

Operating Profit PBDIT Interest

11,170. 8,905.59 25 12,606. 10,146.67 05 1,686.2 1,848.19 7

9,176.44 9,779.51 1,489.50

8,244.54 8,830.95 929.03

6,913.7

7,275.87 251.25

31

PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs)

10,919. 8,298.48 78 1,146.1 1,083.18 9 0.00 0.00

8,290.01 973.40 0.00 7,316.61 0.00 7,316.61 2,114.87 5,201.74 6,892.44 109.45 1,168.95 214.10

7,901.92 834.61 0.00 7,067.31 0.00 7,067.31 2,380.28 4,687.03 5,385.07 22.19 1,168.93 202.43

7,024.62 819.29 0.00

9,773.5 7,215.30 9 0.00 0.00

6,205.33 57.29

9,773.5 7,215.30 9 2,912.4 2,168.50 4 6,865.6 5,046.80 9 8,914.8 7,543.64 3 0.00 45.88

6,262.62

2,040.47

4,222.1

4,858.96 0.00 943.91 160.42

1,151.0 709.77 6 156.71 122.80

9,592.1 8,872.14 4 71.58 56.37

7,305.92 69.70 160.00 331.68

7,305.84 63.85 160.00 298.78

5,804.73 72.74 155.00 240.31

120.00 80.00 503.19 418.94

32

Balance Sheet of Tata Steel

------------------- in Rs. Cr. ------------------Mar '11 Mar '10 Mar '09 Mar '08

Mar '07

12 mths 12 mths

12 mths

12 mths

12 mths

Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans 959.41 959.41 178.20 0.00 887.41 887.41 0.00 0.00 6,203.45 730.79 0.00 5,472.66 23,501.15 0.00 29,704.60 3,913.05 23,033.13 6,203.30 730.78 0.00 5,472.52 21,097.43 0.00 27,300.73 3,520.58 14,501.11 580.67 580.67 147.06 0.00

47,307.0 36,281.34 2 0.00 0.00

13,368.4 0.00

48,444. 37,168.75 63 2,009.20 2,259.32 26,291.9 22,979.88 4 28,301. 25,239.20 14 76,745. 62,407.95 77 Mar '11 Mar '10

14,096.

3,758.92

5,886.41

Total Debt

26,946.18

18,021.69

9,645.3

Total Liabilities

56,650.78 Mar '09

45,322.42 Mar '08

23,741.

Mar '07

12 mths 12 mths

12 mths

12 mths

12 mths

Application Of Funds Gross Block 22,846.2 22,306.07 20,057.01 16,479.59

16,029.4

33

6 Less: Accum. Depreciation 11,041.1 10,143.63 6 11,805. 12,162.44 10 6,969.38 3,843.59 46,564. 44,979.67 94 3,953.76 3,077.75 428.03 512.76 434.83 500.30 9,062.47 8,223.48

7,486.37

Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions

10,994.54 3,487.68 42,371.78 3,480.47 635.98 463.58 4,580.03 5,884.61 1,127.02 11,591.66 0.00 8,965.76 2,934.19 11,899.95

8,256.11 4,367.45 4,103.19 2,604.98 543.48 465.00 3,613.46 34,582.84 0.04 38,196.34 0.00 6,842.26 2,913.52 9,755.78

8,543.1

2,497.44

6,106.1

2,332.98 631.63 446.51

4,894.55 4,012.88 16,814.0 6,678.55 4 3,628.78 2,733.84 25,337.3 13,425.27 7 0.00 0.00

3,411.12

4,025.95

7,234.84

14,671.9 0.00

10,383.0 8,699.34 4 3,547.98 3,303.68 13,931.0 12,003.02 2 11,406. 1,422.25 35 0.00 0.00

6,349.24

1,930.46

8,279.70

Net Current Assets Miscellaneous Expenses Total Assets

-308.29 105.07 56,650.78

28,440.56 155.11 45,322.42

6,392.2 202.53

76,745. 62,407.95 77

23,741.

Contingent Liabilities

12,582.2 13,184.61 4

12,188.55

9,250.08

7,185.93

34

Book Value (Rs)

503.19

418.94

331.68

298.78

240.31

Conclusion

From the above project we conclude that:

The merger of Mittal Steel and Arcelor is bound

to bring a steel change in the consolidation of steel industry. The combination is expected to offer

unparalleled scale of production coupled with strong global presence, provides unique platform for growth and value

creation.

35

Bibliography
www.scribd.com www.wikipedia.co

1.

2.

36

Limitation

Time constraint Information availability Cost constraints

37

Contribution
Murari- Data collection and Editing Apoorva- Data collection and Editing Pranay-Financial data collection Subramaniam-Financial data collection

38