tata chemicals ltd

TATA Chemicals LTD .Executive summary:-

Tata Chemicals Limited (TCL) is a global company with interests in businesses that focus on LIFE — living, industrial and farming essentials. It is the world's second-largest producer of soda ash. With manufacturing facilities in India, UK, US and Kenya, TCL is the world’s most geographically diversified soda ash company, with an efficient supply chain that can service customers across the globe.Established in 1939 at Mithapur (in Gujarat, India), TCL is a part of the Tata group. It is a leading player in the agribusiness sector with a strong presence in crop nutrients (urea and phosphatic fertilisers) and crop protection products. The company is a pioneer and market leader in the Indian branded iodised salt segment through its pioneering brand Tata Salt.TCL’s global soda ash capacity is around 5.5 million tonnes per annum, out of which 60 per cent capacity is from natural soda ash deposits at Wyoming in the US and Lake Magadi in Kenya. Along with soda ash (sodium carbonate), the company also manufactures sodium bicarbonate and bulk chemicals such as sulphuric acid, phosphoric acid, and sodium tripoly phosphate (STPP). The company has extended its operations into the services sector and touches lives through applications in agriculture, animal nutrition, construction, consumer products, glass, metals, pharmaceuticals, soaps and detergents, and textiles and leather industries.

Global reach: Since 2005 Tata Chemicals has adopted an internationalisation strategy. It acquired an equal partnership in Indo Maroc Phosphore SA (IMACID), along with Chambal Fertilisers and global phosphate major OCP of Morocco in that year. In early 2006, it completed the acquisition of UK-based Brunner Mond Group and its subsidiary, the Magadi Soda Company in Kenya.In 2007, it entered the fruits and vegetables distribution business by setting up Khet-Se Agriproduce India, a 50:50 joint venture in partnership with Total Produce of Ireland, the world's third-largest fresh produce distribution company. In 2008, Tata Chemicals acquired General Chemical Industrial Products, one of the largest soda ash manufacturers in the US. With this, TCL's global soda ash capability stands at around 5.5 million metric tonnes per annum.

Innovation: TCL plans to leverage its expertise in chemicals and agri-businesses together with its in-house research capabilities to develop strengths in new businesses and sustainable technologies. The company set up the TCL Innovation Centre in 2004 to develop world-class R&D capability in nanotechnology and biotechnology, and is also working to build a significant presence in the biofuels sector. Its Innovation Centre is also working on technologies that can mitigate climate change through "green chemistry" and product offerings that will make a difference like flue gas treatment, carbon absorption and nano glass-coatings for insulation.

Sustainable chemistry: Tata Chemicals is committed to meeting the highest standards of corporate governance and business practices. All of its activities integrate the principles of corporate sustainability. The company is a signatory to Responsible Care, a voluntary global initiative of the chemical industry that demonstrates allegiance to safety, health and environmental issues. Its Mithapur and Babrala plants have won the highest British Safety Council 5-star rating. Tata Chemicals works directly with farmers in India to help solve crop problems and enhance yields. The company has set up a network of Tata Kisan Sansars (farmer centres) in the Indian states of Uttar Pradesh, Uttaranchal, Punjab, Haryana, Jharkhand, West Bengal and Bihar. The network services around 22,000 villages, with access to over 3.5 million farmers.In 1980, Tata Chemicals set up a non-governmental organisation – Tata Chemicals Society for Rural Development (TCSRD) – that works towards holistic community development, including managing water, land and other natural resources, encouraging enterprise development, and promoting health and education. TCSRD's activities have been recognised at a national level. Tata Chemicals is also involved in efforts to preserve the biodiversity of land along the coastline and the nesting sites of migratory birds. TCL and Wildlife Trust of India (WTI) have signed an MoU for a conservation project that will create awareness and undertake research to save the endangered species of whale shark that visits the coastal shores of Gujarat.

Tata Chemicals broadly operates in three sectors — living essentials (household products), industry essentials and farm essentials (crop nutrition and protection) — giving it a wide and diverse customer base. The core concept behind its product and services portfolio is to provide inputs for better living.The company’s sustainable approach to business has led it to work towards optimising the use of raw materials, resources and technology and creating a portfolio of products that find application across industries and consumers. It has taken several key steps to develop a high-tech and sustainable product portfolio by leveraging its business and scientific expertise.Tata Chemicals has established the TCL Innovation Centre in Pune with world-class R&D capabilities in the emerging areas of nanotechnology and biotechnology. TCL's Centre for Agriculture and Technology at Aligarh provides advice on practices and solutions related to farming and crop nutrition. The company has also entered into a joint venture with Temasek Life Sciences Laboratory in Singapore for the development of better varieties of seedlings and agronomic practices.

Living essentialsBasic products for daily living, such as salt, sodium bicarbonate or baking soda products, fresh produce and water-related products The company’s foray into household and consumer necessities started with an idea – using iodised salt to resolve health issues arising out of iodine deficiency in India. Tata Chemicals has launched a range of iodised salts in India and today is considered a business superbrand in Indian industry. Today, the Consumer Products Business (CPB) comprises branded iodised edible salt, sodium bicarbonate and water purifiers, among other offerings. Besides the iconic brand Tata Salt, the company's products include a new refined salt brand called I-Shakti; Tata Salt Lite (contains 15 per cent less sodium than ordinary salts and caters to health-conscious low-sodium salt users); and Topp Salt, a brand of edible salt created for export. I Shakti, a cooking soda, is marketed as a leavening agent.To leverage its reach with farmers and housewives, TCL started Khet-Se, a fresh fruit and vegetable distribution business in India, in 2007 as a 50:50 joint venture with Total Produce of Ireland. Total Produce is the third largest fruit and vegetable distribution company in the world and Europe’s largest fresh produce provider. The first Khet-Se centre has already opened in Punjab; the next will come up in Maharashtra. Khet-Se will source fruits and vegetables for the fruit and vegetable retailer through its conveniently located wholesale stores.Safe drinking water is still a pipe dream for the majority of India’s lower middle class and poor. TCL met this challenge by launching Tata Swach in December 2009. Tata Swach is a unique and innovative water purifier that combines low-cost ingredients such as rice husk ash with nano-technology. The product provides performance, convenience and, above all, affordability, and serves a basic human right of millions of consumers.

Industry essentialsProducts that form essential inputs to diverse industries across the glass, detergents, mining and chemical processing sectorsSoda ash, one of TCL’s main products, finds use in several industries, including the manufacturing of glass, pulp and paper, detergents and industrial chemicals. TCL’s customer base includes some of the world’s leading and most recognisable brands and companies, such as Procter & Gamble, Church & Dwight, Unilever, Saint Gobain, Pilkington, Asahi, Owens Illinois, Guardian, PPG, Vale, Xstrata and Pilkington.Tata Chemicals' journey started as a synthetic soda ash manufacturer at Mithapur, Gujarat. The salt works spread across 60sqkm can produce over 2 million tonnes of solar salt, the base raw material for almost all the 27 basic chemicals that the company produces. The Mithapur plant is the largest integrated salt works and inorganic chemicals complex in this part of the world. It has an installed capacity of 875,000 tpa -- about 34 per cent of the country's capacity -- making it one of the largest producers of synthetic soda ash in the world.The company's soda ash capacity took a significant leap in early 2006 when it completed the acquisition of the UK-based Brunner Mond Group, one of the world’s leading manufacturer of associated alkaline products, and added manufacturing plants in Northwich in the UK and Lake Magadi in Kenya. Lake Magadi is a major alkaline evaporate deposit in Africa’s Great Rift Valley.In early 2008 TCL successfully completed the acquisition of US-based General Chemical Industrial Products (GCIP), providing access to some of the world’s largest and most economically recoverable trona ore deposits that are then converted to soda ash, and to manufacturing facilities located at Green River Basin in Wyoming.

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Along with soda ash, TCL also produces sodium bicarbonate, bulk chemicals such as sulphuric acid, phosphoric acid, sodium tripoly phosphate (STPP), caustic soda, bromine-based products, chlorine based products, gypsum and cement. TCL's cement business grew out of a sustainability and environment activity; the cement plant at Mithapur was set up to consume the solid waste generated during the manufacture of soda ash. By instituting a more efficient filtration process, TCL has worked towards capturing by-products and effluents of the soda ash manufacturing process. The thousands of tonnes of effluent, thus diverted from negatively loading the environment, have been converted into a usable commodity – cement – that is used for high quality construction in western India.

Farm essentialsFarm inputs needed to improve crop health and productivity, such as fertilisers, pesticides, specialty nutrients, seeds and agri-servicesThe crop nutrition and agri-business unit has a presence across three key agro-nutrients – nitrogen, phosphorus and potassium. Nitrogenous fertiliser (urea) is manufactured at Babrala in the northern state of Uttar Pradesh; phosphatic fertilisers, DAP and complexes are manufactured at Haldia in West Bengal in eastern India; MOP is imported.Currently, TCL is a dominant player in the crop nutrition segment and its subsidiary Rallis India is a leader in the crop protection industry. Through Rallis, TCL is looking to enhance value creation as well as access to business synergies in the crop nutrition and protection sectors, and thus strengthen its presence in the entire agri-input space.The company also helps small farmers enhance farm yields by providing end-to-end solutions through a network of Tata Kisan Sansars (farmer’s centres) in the Indian states of Uttar Pradesh, Punjab, Haryana, Uttarakhand, West Bengal, Bihar and Jharkhand. Tata Kisan Sansars are one-stop resource centres; they stock seeds, pesticides and fertilisers; lease out farm equipment and implements to farmers who cannot afford to buy expensive modern machinery; provide agronomy services like soil testing and mapping and fertiliser testing; arrange credit and crop insurance, and even provide buyback facilities.

New business

Tata Chemicals is leveraging its expertise in chemicals and agri-businesses to develop strengths in new sustainable technologies in the nanotechnology and biotechnology space. The company is actively working to build a significant presence in the biofuels sector. Its Innovation Centre is working on technologies that can mitigate climate change through “green chemistry” and product offerings that will make a difference.

BiofuelsIn 2007, Tata Chemicals decided to enter the biofuels business in India. A 30KL per day bioethanol facility, using sweet sorghum as feedstock, has been set up at Nanded, Maharashtra. Arrangements have been made with farmers in districts in and around Nanded, for growing sweet sorghum. The plant has proved the technical viability of bioethanol production based on sweet sorghum. The company has also undertaken field research on Jatropha, a non-edible tree crop for biodiesel production. Tata Chemicals has set up a research farm in Aurangabad and has started varietal trials for developing a package of practice. The company has also set up multi location trials for Jatropha in Gujarat, Maharashtra, Tamil Nadu and Andhra Pradesh.

TCL Innovation CentreTata Chemicals Innovation Centre was set up with the objective of developing world-class R&D facility working on more than 20 projects in the areas of nanotechnology and biotechnology. It has now moved from being TCL-centric to a having a much wider base of clients, from the Tata group as well as external companies.

The team of scientists at the centre is working in the following areas:

Advanced materials

Specialty chemicals

Green chemistry and catalysis ,

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Alternate energy

Nutraceuticals

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Advanced materials

Focus areas: Nano materials, metals, ceramics, nano powder, nano composites , nano coatings, customisation for both structural and functional applications

Capabilities:

Synthesis of nano materials

Surface functionalisation

Tailored nanostructure

Nano material synthesis through bio routes

Development of nano material scalable processes

Facilities:

Wet chemistry lab for nano material synthesis

Structural spectroscopic characterisation

Tie up with leading national and international, government and industrial research centres for testing and synthesis facilities

Biochemicals and metabolites

Focus areas:Enzymes, biopolymers and ingredients, platform chemicals, surfactants and fine chemicals

Capabilities:

Isolation, screening and characterisation of the micro organisms

Recombinant DNA technology:Gene cloning and expression of genes in bacteria for enzymes and specialty chemicals

Strain improvement using genetic engineering

Protein purification and characterisation

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Facilities:

All basic microbiology facilities

Facilities for molecular biology and strain improvement (PCR machine, electroporator, DNA and protein electrophoresis units, DNA and protein blotting apparatus, GEL documentation system etc.)

Green chemistry and catalysis, Alternate energy

Focus areas:Sustainable and green chemical transformations, development of catalyst and catalytic transformation for clean fuels and chemicals, bio fuels – ethanol, bio butanol from variety of agricultural wastes and residues, technologies for bio diesel, solar energy, fuel cells, bio-hydrogen and value addition of by-products thereof.

Capabilities:

Catalyst preparation

Catalytic reactions

Surface and chemical characterisation

Bio chemical engineering

Fermentation design and process development

Anaerobic fermentation

Process intensification

Scale up

Downstream processing

Facilities:High pressure batch autoclaves

Vapour phase high temperature and pressure continuous reactors

Analytical equipments for characterisation

Fermentors

Ultra filtration

Chromatographic separations

High pressure autoclaves

Proprietary (Novel and IC designed) equipment

Alternate energy

Focus areas:Bio fuels: Ethanol and Biobutanol from variety of agricultural wastes and residues. Technologies for Bio-diesel, solar energy, fuel cells and bio-hydrogen, and value added by-products.

Capabilities:

Bio chemical engineering

Fermentation design and process development

Anaerobic fermentation

Process intensification

Scale up

Downstream processing

Facilities:

Fermentors

Ultra filtration

Chromatographic separations

High pressure autoclaves

Proprietary (Novel and IC designed) equipment

Projects under completion:

Bio-ethanol

Bio-diesel

Nutraceuticals

Focus areas:Oligosaccharides, sweeteners, anti-obesity products through green routes

Capabilities:

Microbiology

Fermentation

Enzyme extraction and purification

Immobilisation

Biosynthesis of chemicals using enzymes

Facilities:

Fermentors

Down stream processing spray dryer, ion exchange chromatography, HPLC, lypholyzer, ultra and nano filtration

Centre for Agriculture and Techonology (CAT)The CAT has been set up in Aligarh, Uttar Pradesh to provide advice to farmers on farming and crop nutrition practices and solutions. This centre is staffed with experienced scientists who are working in various areas of agri-technology. Specific projects have been undertaken on determining area and crop specific nutrition products and combinations, soil health tracking through indexing etc.The CAT is expected to provide TCL a competitive advantage

in the future and will provide a very strong base for the growth of the company in its customised fertiliser business, specialty crop nutrients business and agribusiness

Present situation:- Milestones achieved by the company

2001

Production severely affected due to earthquake on January 26, 2001 and the fire in the power plant on March 2, 2001. Cement sales taken over from ACC Limited.

2002

Mithapur is awarded ISO-14001 certification.

The Chemicals Division at Mithapur is awarded the ISO-9001-2000 Migration certificate.

2003

Tata Salt ranked No. 1 Food brand in Brand Equity Survey of India's most trusted brands.

Babrala fertiliser plant registered with British Safety Council.

New initiatives taken up to consolidate and drive growth in the core business.

Chemical plant at Mithapur bags 'Certificate of Honour' and saltworks awarded 'Certificate of Merit' by Gujarat State Safety Council.

Mithapur becomes the first industrial township to be awarded the ISO 14001 certificate.

The fertiliser plant gets ISO-14001 and OHSAS-18001 certification.

2004

ISO 14001 certification for the Babrala Township for implementation of Environment Management System. Certification audit conducted by KPMG, India.

Tata Chemicals set up the Innovation Centre to develop world-class R&D capability in the emerging areas of nanotechnology and biotechnology.

2005

First step towards internationalisation. TCL acquires an equal partnership in Indo Maroc Phosphore SA (IMACID) along with Chambal Fertilisers and global phosphate major, OCP of Morocco.

2006

TCL completes acquisition of UK-based Brunner Mond Group, one of the world's leading manufacturers soda ash and associated alkaline products.

2007

Khet Se Agriproduce set up as a 50:50 joint venture with Total Produce, Ireland, the third largest fruits and vegetable distribution company in the world.

2008

TCL acquires US-based General Chemical Industrial Products (GCIP). Becomes world’s second largest soda ash manufacturer.

2009

Tata Chemicals Limited, UREA division achieves RC 14001 - 2005 Certification

TCL has been certified under SA 8000:2001 standard for the Mithapur, Babrala and Haldia sites by RINA India Pvt Ltd.

TATA Chemicals current situation in various fields:

Agriculture

In India, agriculture constitutes one quarter of the Indian economy. More significant, it employs two-thirds of the nation's workforce and feeds a population of one billion people. Tata Chemicals believes that empowering farmers, enriching the land and enhancing agricultural productivity are key factors to the nation's prosperity.

Tata Chemicals touches lives in agriculture through several ways: its basket of crop nutrition products, its Tata Kisan Sansar network, and its fresh produce sourcing and distribution business, Khet-Se Agriproduce.

Fertilisers

In India Tata Chemicals is present in all three crop nutrition groups through its fertiliser product base that spans: Urea (a nitrogenous fertiliser)

DAP (contains both nitrogen and phosphorus)

NPK complexes (contains all three nutrients)

SSP (phosphorus based)

Imported MOP (potassium based fertilisers)

Organic manure or fertilisers

Specialty fertilisers (calcium nitrate and zinc sulphate)

Tata Kisan SansarThe Tata Kisan Sansar (TKS) is a network of nearly 600 farmer resource centres that caters to more than 3.5 million farmers in 22000 villages in the northern part of India. The centres are one-stop solution shops that provide farmers access to a wide range of agricultural inputs such as vital fertilisers, seeds, and pesticides; agricultural services such as soil testing, crop information, and credit and insurance facilities; and IT-enabled market information.

The objective of the TKS network is to enable and empower the farmer in creating and generating more value for farm produce by providing information on new and improved agronomic practices and by facilitating better and more efficient use of agricultural inputs.

Khet-Se AgriproduceKhet-Se Agriproduce is a joint venture between Tata Chemicals and Total Produce Inc of Ireland that sources fresh vegetables and fruits directly from farmers and distributes to small retailers, wholesalers and institutional buyers through its conveniently located wholesale stores. The company offers hygienically handled, high quality produce which is delivered absolutely fresh to its customers.

Animal nutrition

The vacuum salt and sodium bicarbonate manufactured by Tata Chemicals are the trusted choice of farmers and dairy owners for cattle and poultry feed.

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Vacuum saltThis salt forms a vital component of cattle licks, which provide much-needed salt and minerals to dairy livestock and supplement their normal diet. Cattle licks are available either as plain salt blocks or mineralised salt blocks. Plain salt blocks comprise only salt, while mineralised salt blocks also contain essential nutrients such as cobalt, zinc, iron, copper, manganese and iodine. The supplements in mineralised salt blocks help enhance the milk production in milch cattle and keeps them healthy by regulating their metabolism.

TCL's vacuum salt is almost free from extraneous matter. It is edible common salt, manufactured by evaporating sea brine in steam-heated vacuum evaporators. It can be dissolved very quickly due to its fine crystalline structure and is more freely available in salting-out processes.

Sodium bicarbonateTCL's refined sodium bicarbonate is ideally suited for poultry feed and diet for dairy animals. It is of particular value as a non-chloride source of sodium in poultry diets. Bicarbonate is also essential for strengthening eggshell quality under intensive production systems. When added to diets for dairy animals, sodium bicarbonate effectively counters the acidity of silage- and cereal-based concentrates, maintaining feed pH at its optimum level.

Construction

Builders, architects and masons know that if the cement they use is not of the required standards, their buildings will suffer from seepage in the first monsoon after construction. Tata Chemicals manufactures three varieties of cement under the brand name Shudh Cement:

Ordinary Portland Cement (grade 53)

Masonry Cement

All Tata Chemicals' cement products are made in a 1,500 tonnes per day capacity plant with state-of-the-art technology, which includes quality control at every stage of the production process with an online x-ray analyser. This ensures a high level of consistency of quality in the manufacturing process.

Shudh Cement has already acquired a five per cent share of the cement market in Gujarat despite tough competition from its better-established competitors. It has been recognised in the market as a superior product, ideally suited for quality constructions. Shudh Cement far exceeds the quality norms and specifications prescribed by the Bureau of Indian Standards

Consumer products

Tata Chemicals is the market leader in packaged salts in India with more than half the total market consuming Tata brands. The reason: Tata Salt and its fellow brands go far beyond taste to target health initiatives such as iodine deficiency and low sodium requirements.

Tata Salt has won accolades as India's most trusted food brand for several years. New brands I-Shakti and Tata Salt Lite are also creating waves in the market.

Iodised saltTata Salt, the flagship product of TCL's food-additives division, is the top-selling branded salt in India, with around 60-per cent share of the market. TCL's state-of-the-art production processes ensure that Tata Salt arrives in your kitchen and on your dining table untouched by human hand. The company is committed to providing a pure, proven, high-quality product. In fact, Tata Salt has been identified as a Superbrand from among 800 shortlisted brands.

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Because of its purity and reliable quality, Tata Salt is the favoured choice of housewives, hotels and restaurants, and manufacturers of packaged snacks, colas and salted snacks. The company also recently launched its Topp Salt brand in the Middle East. Vacuum evaporated, super refined and iodine-enriched, Topp Salt has been introduced in Dubai, and will move on to Abu Dhabi and Sharjah to cover the entire United Arab Emirates. The company also plans a rollout in Oman, Kuwait, and Saudi Arabia.

Tata Salt Lite is a new low sodium salt launched by Tata Chemicals that has high health benefits. I-Shakti is another salt brand that has been well-received in the market.

Vacuum saltThe purity of TCL's vacuum salt makes it an effective replacement for solar salt in all applications. It is also the preferred brand for manufacturers of papad-khar.

Sodium bicarbonateSodium bicarbonate, or baking soda, is used as a 'raising agent' in a wide range of bakery products. TCL's refined baking soda offers improved texture in cakes, biscuits and a number of other confectionery products. Because of its superior quality, TCL's sodium bicarbonate is the product of choice for manufacturers of food-grade baking powder and self-raising flours.

Cooking sodaTata Chemicals has launched a branded cooking soda sold in small, single-use sachets under the brand name Tata Samunder Cooking Soda. Cooking soda is an ingredient already familiar to Indian consumers but so far has only been available in an unbranded form and is purchased either loose or in unmarked plastic pouches. Tata Samunder Cooking Soda will create a more evolved and quality-conscious market for this product, in much the same way as Tata Salt did in the early 1980s.

Defined as a value for money offering, Samunder refined food grade soda bicarbonate (NaHCO3) is pure and unadulterated, and is the first branded food grade sachet cooking soda in the country.

Pharmaceuticals

The sodium bicarbonate manufactured by Tata Chemicals is a product that meets the pharmaceutical industry's high standards in drugs and dental medicine.

Sodium bicarbonate is a vital ingredient in the production of over-the-counter drugs such as effervescent antacids, analgesic tablets and powders, toothpaste and antacid gel formulations. In addition, sodium bicarbonate in the form of an effervescent solution is also effective in cleaning dentures. High-purity sodium bicarbonate is also used as an alkali in the pharmaceutical industry.

TCL's sodium bicarbonate, when further processed, meets the stringent quality criteria demanded by the pharmaceutical industry. The company has, over the years, formed a reliable bond with such processors for supplying them sodium bicarbonate of the highest quality.

Another TCL product that finds applications in pharmaceuticals is pure salt.

Soaps and detergents

The soaps and detergents industry is a major customer of the soda ash manufactured by Tata Chemicals.

Soda ash is used as a builder or filler, to deliver a smoother surface in the formulation of soaps, detergents and other cleaning compounds. It is also used as an alkali in pH adjustment.

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In addition, soda ash is used to manufacture ultramarine, which gives white clothes a sparkling look. Shampoos use soda ash as a pH modifier, while soda ash precipitate is used as a soft abrasive in toothpaste.

Detergents require light soda ash with chloride percentages of 0.4 to 1.0 per cent. The bulk density of this soda ash ensures volume benefits, while the low chloride content makes it ideal for use in washing machines.

In the detergent manufacturing process, soda ash can be hydrated to carry water as an inexpensive filler and to enhance the storage and dissolving properties of the detergent. Soda ash is used in a slew of laundry and cleaning compound formulations: as a builder to emulsify oil stains, to reduce the deposit of dirt during washing and rinsing, to provide alkalinity for cleaning, and to soften laundry water. Additionally, soda ash is a component of sodium tripolyphosphate (STPP), another major builder in detergent formulations.

In powdered laundry detergent, soda ash conditions the water and enhances the processing and performance of formulated cleaning products.

Objectives:-

These are the principles and values that govern Tata Chemicals.

MissionServing society through science

Vision

We shall be amongst premier chemical companies by:

Leveraging science to deliver new and innovative offerings

Enhancing value to our customers

Delivering superior returns to our shareholders

Leading in corporate sustainability

Nurturing innovation, learning through diversity and team work amongst employees

Values

Integrity

Safety

Excellence

Care

Innovation

Management Research:-

Ratan Tata, Chairman

Ratan N Tata has been Chairman of Tata Sons, the holding company of the Tata Group, since 1991. He is the chairman of Tata Chemicals Ltd, along with several other Tata companies, including Tata Motors, Tata Steel, Tata Consultancy Services, Tata Power, Tata Tea, Indian Hotels, Tata Teleservices and Tata AutoComp

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Systems. During his tenure, the Group’s revenues have grown over ten-fold to annualised Group revenues of $62.5 billion.

Mr Tata joined the Tata Group in December 1962. After serving in various companies, he was appointed director-in-charge of The National Radio & Electronics Company Limited (NELCO) in 1971. In 1981, he was named chairman of Tata Industries, the Group’s other holding company, where he was responsible for transforming it into a Group strategy think-tank, and a promoter of new ventures in high technology businesses. He is also the chairman of two of the largest private sector promoted philanthropic trusts in India.

Mr Tata is associated with various organisations in India and abroad. He is chairman of the Government of India’s Investment Commission and a member of the Prime Minister’s Council on Trade and Industry, the National Hydrogen Energy Board and the National Manufacturing Competitiveness Council.

Mr Tata also serves on the International Investment Council set up by the president of the Republic of South Africa and the UK Prime Minister’s Business Council for Britain. He is a member of the International Advisory Council of Singapore’s Economic Development Board, the Asia-Pacific Advisory Committee to the board of directors of the New York Stock Exchange and of the international advisory boards of the Mitsubishi Corporation, the American International Group, JP Morgan Chase and Rolls Royce. He also serves on the boards of Fiat SpA and Alcoa.

Mr Tata is president of the court of the Indian Institute of Science and chairman of the Council of Management of the Tata Institute of Fundamental Research. He is a member of the board of trustees of Cornell University and the University of Southern California and of the Foundation Board of the Ohio State University. He is also a member of the Global Business Council on HIV/AIDS and the Programme Board of the Bill & Melinda Gates Foundation's India AIDS Initiative.

Mr Tata received a Bachelor of Science degree in architecture with structural engineering from Cornell University in 1962 and worked briefly with Jones and Emmons in Los Angeles before returning to India later that year. He completed the Advanced Management Program at Harvard Business School in 1975.

The Government of India honoured Mr Tata with its second highest civilian award, the Padma Vibhushan, in 2008. Earlier, in 2000, he had been awarded the Padma Bhushan. He has also been conferred an honorary doctorate in business administration by the Ohio State University, an honorary doctorate in technology by the Asian Institute of Technology, Bangkok, an honorary doctorate in science by the University of Warwick, and an honorary fellowship by the London School of Economics.

R Gopalakrishnan, vice chairman

R Gopalakrishnan is executive director of Tata Sons, vice chairman of Tata Chemicals and chairman of Rallis India and of Advinus Therapeutics. He is a director on the boards of several Tata companies, among them Tata Motors, Tata Power and Tata Teleservices.

A key member of the Tata Group Corporate Centre, Mr Gopalakrishnan plays a vital role in providing direction and impetus to the Group's forays into potentially viable areas of the new economy.

Mr Gopalakrishnan joined Hindustan Lever (now Hindustan Unilever) as a management trainee in 1967. In 1987, he joined the company’s management committee as executive director of exports. In 1991, he was appointed chairman of Unilever Arabia, based in Jeddah, to establish and manage Unilever's consumer products business in Arab countries.

On his return to India in 1995, Mr Gopalakrishnan was appointed managing director of Brooke Bond Lipton. After the company's merger with HLL, he was designated vice chairman of Hindustan Lever. After 31 years with Hindustan Lever, Mr Gopalakrishnan joined Tata Sons in September 1998 as executive director.

A graduate in physics from Calcutta University, Mr Gopalakrishnan also has a degree in engineering from the Indian Institute of Technology, Kharagpur. He has been president of the All India Management Association and is involved with education through his board memberships of a school and two management colleges. Mr Gopalakrishnan is the author of The Case of the Bonsai Manager, published by Penguin India in 2007.

R Mukundan, managing director

Ramakrishnan Mukundan is the managing director of Tata Chemicals Limited (TCL), and was the executive director of the company. Prior to that, he was the executive vice president (chemicals) and was responsible for the chemicals business and consumer products business of TCL and its subsidiaries.

He joined TCL in 2001 and led various functions like strategy and business development, corporate quality, corporate planning, and manufacturing before taking over as the chief operating officer of the chemicals business of the company. He played an active role in the TCL transformation efforts in 2002, and also in the growth of domestic business as well as acquisition of new facilities in Brunner Mond (UK), Magadi Soda (Kenya) and General Chemicals (US).

Mr Mukundan has been a member playing decisive role in several industry forums like Indian Chemical Council, past executive member of Automotive Components Manufacturers Association, past president of Alkali Manufacturers Association of India, CII Chemical Industry forum.

An engineer from IIT Roorkee, Mr Mukundan, 42, joined the Tata Administrative Service (TAS) in 1990 after completing MBA from Faculty of Management Studies (FMS), New Delhi and worked with Tata AutoComp Systems and Indian Hotels Company Limited (IHCL). He is an alumnus of Harvard Business School’s advanced management programme.

Mr Mukundan lives in Mumbai with his wife Sheila, a doctor, and son Siddharth who goes to school. He is an avid reader, traveller, and a fitness enthusiast.

PK Ghose, executive director and CFO

Prashant Kumar Ghose is the executive director and CFO of Tata Chemicals Limited (TCL). He was the executive vice president and chief financial officer of the company responsible for treasury, accounting, taxation, strategic finance, secretarial, and information technology.

He started his career with Tata Steel in 1973 and has held several important positions in the company before becoming the chief financial controller (corporate) of the company in 2001. He was elevated as the chief of strategic finance of Tata Steel later during that year. After a successful stint at Jamshedpur, Mr Ghose joined TCL as the CFO in 2002.

Mr Ghose was awarded the CFO of the Year (cost optimisation) in 2003, and CFO of the year in 2006 for ‘Deal of the Year’.

Mr Ghose, 58, is a graduate in commerce and a member of the Institute of Cost and Works Accountants (ICWA) of India and the Institute of Company Secretaries of India. He is also an alumnus of the Advanced International General Management programme of CEDEP, France.

He lives in Mumbai with his son Saurabh, who is a banker, and daughter Shreya, who is studying business management. Mr Ghose is an avid cricketer and photographer.

Directors

Prasad R Menon Nusli N Wadia Nasser Munjee

Dr Yoginder K Alagh Dr M S Ananth E A Kshirsagar

Dr Y S P Thorat

The business of service

With years of expertise in the agri-business space, Tata Chemicals has extended its business operations into the services sector in India.

Tata Kisan SansarTata Kisan Sansar outlets form a network of franchised retail outlets in the Indian states of Uttar Pradesh, Uttaranchal, Punjab, Haryana, Jharkhand, West Bengal and Bihar. The network of agri-service centers, serve an area of around 22,000 villages, with access to over 3.5 million farmers.

The centres are one-stop resource centres – they stock seeds, pesticides and fertilisers, lease out farm equipment and implements, and provide services such as soil testing and mapping, fertiliser mapping, credit finance, crop insurance, etc.

Khet SeTata Chemicals, through its new business venture Khet-Se Agriproduce India, has set up state-of-the-art facilities for fresh fruit and vegetables sourcing, packaging and distribution. The first centre has already opened in Punjab; the next will come up in Maharashtra. Khet-Se will source fruits and vegetables for the fruit and vegetable retailer through its conveniently located wholesale stores.

The organisation will cater to customers such as small retailers, organised retailers, and the institutional segments comprising of hotels, restaurants and caterers. Khet-Se offers hygienically handled, high quality produce, which is delivered absolutely fresh to its customers viz, Bharti Wal-Mart India Pvt LimitedSpencers, Namdhari Fresh Limited.

Call centresTata Chemicals has set up business process outsourcing (BPO) centres in Mithapur, Gujarat and Babrala, Uttar Pradesh. These centres are unique in the sense that they are based in rural India, and thus provide employment and self-sustaining community development opportunities to the communities of these areas.

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The centres, called Uday, are an initiative of the Tata Chemicals Society for Rural Development (TCSRD), a community initiative arm of TCL. In areas where job opportunities were close to zero,Uday, the company's rural BPO, along with SerWizSol at Mithapur and Babrala has been providing job opportunities to 206 rural youth and has brought sunshine in their life.

Products:-

Tata Chemicals' products find use in a wide range of pharmaceutical, food processing and industrial applications that touch our lives on a daily basis. From food processing and fresh produce, to detergents and drugs, Tata Chemicals produces high quality chemicals and ingredients that go a long way to improving the quality of our lives.

Living essentials

Cooking soda : Tata Samunder

Fresh produce

Salt: Tata Salt, I-Shakti, Tata Salt Lite

Tata Swach

Industry essentials

Soda ash

Sodium bicarbonate

Alkakarb

Chemicals: Caustic soda, chlorine based products, bromine based products,gypsum, phosphoric and sulphuric acids

Sodium tripolyphosphate

Cement: Tata Shudh

Farm essentials

Customised fertilisers

Fertilisers: Tata Paras urea,

DAP, NPK, SSP

New business

Biofuels

Bio fuels

Tata Chemicals' biofuels business has grown out of its extensive expertise in chemicals manufacturing, the agriculture and crop-nutrition space, and its research capability through the Innovation Centre. Its product portfolio includes

Bioethanol

Biodiesel

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The business is currently focused on working with sustainably grown feedstock for first generation bioethanol and biodiesel. The bioethanol plant in Nanded, Maharashtra, is a 30KL/day facility using sweet sorghum as feedstock for bioethanol, and sweet sorghum bagasse as fuel for generating power. Sweet sorghum which contains 10-12 per cent sugar content can be crushed and processed like sugar cane and has the added advantages of reaching maturity within a 110-day period and requires only one-third quantity of water for cultivation.

For biodiesel, the company is currently focused on identifying, developing and cultivating superior varieties of jatropha as feedstock. TCL has also recently acquired an equity stake in JOil (Singapore), a jatropha seedling company founded by Temasek Life Sciences Laboratory, that will set up tissue culture labs in India and other locations to develop jatropha seedlings using micro-propagation techniques. Tata Chemicals will also have exclusive marketing rights for JOil’s jatropha seedlings in India and East Africa.

Apart from this, the company is actively involved in biofuels research. TCL's Innovation Centre is working on advanced technologies including second generation biofuels, technology for better processing of feedstock and on by-products. The company plans to utilise the Nanded facility as a pilot plant for the research and development of cellulose-based bioethanol and biobutanol. TCL is also a part of ICRISAT’s Sweet Sorghum Ethanol Research Consortium (SSERC).

Market Analysis:-

Tata Chemicals (TCL) was recognised as the second runner-up at Business world-FICCI-SEDF Corporate Social Responsibility Award 2006 ceremony held at the FICCI Auditorium, New Delhi on May 7, 2007. Dr APJ Abdul Kalam, the honourable president of India, gave away the awards.

The award recognises and applauds the contribution and achievements of corporates in the area of corporate social responsibility in India. Business & Community Foundation (BCF), an NGO, visited all the short listed companies for 'on-site verifications'. A jury comprising of eminent personalities like Dr Adid Hussian, Justice Leela Seth and others made the final selections for the award.

Homi Khusrokhan, managing director, TCL, said, "Concern for all our stakeholders is central to the value system at

Tata Chemicals and the company has always prided itself on its relationship with the communities that it serves. We have a stated CSR policy that is strictly followed. The policy translates into various developmental initiatives that we undertake for our employees, the environment and the communities around our plants. Additionally, volunteerism is encouraged and recognised throughout the organisation. This also helps us to fulfill our CSR goals

TATA CHEMICALS’ BUSINESS UNITS AND GROWTH STRATEGY

Tata Chemicals Limited (TCL) is a global company with interests in chemicals, cropnutrition and consumer products and serves a diverse set of customers across fivecontinents. Established in 1939 at Mithapur, the Company today has the world’s secondlargest capacity in soda ash and is a pioneer and market leader in the Indian brandediodized salt segment. TCL is one of India’s leading producers of nitrogenous andphosphatic fertilizers in the private sector and markets a range of crop nutritionofferings under Tata Paras brand.

TCL has its manufacturing facilities across four continents. With manufacturingfacilities in India, UK, Kenya and USA, TCL is the world’s most geographicallydiversified soda ash company with almost two-thirds of capacity comprising natural sodaash giving it global competitive advantage. TCL is also the fourth largest manufacturer ofsodium bicarbonate in the world. Our nitrogenous fertilizer plant at Babrala is thecountry’s most energy efficient fertilizer unit. Phosphatic fertilizers aremanufactured at Haldia.

In the industrial chemicals business, the focus is on defending share in the soda ashmarket with simultaneous efforts towards greater value extraction from our assets. Whiledemand and prices have shown an upward trend in 2010, overall sentiment remains cautiousand we continue our efforts towards improving the efficiency of our operating sites.During the year, our North American operations competed aggressively with Chinese materialwhile we defended our positions in the Indian and European markets. Operations atDelfzijl, Netherlands were discontinued with a view on long-term sustainability of ourbusiness.

Within the crop nutrition and agri-business, the urea business achieved record salesalong with continuing improvement in operational efficiency. We were able to maintainphosphatics sales volumes at last year’s levels despite operations being adverselyaffected by disturbances in Haldia. Our agri-business initiative Tata Kisan Sansarcontinues to expand into new geographies increasing its footprint to 673 stores, up from580 last year. Besides continued progress in the above, TCL is poised to start productionat its pioneering customized fertilizer plant at Babrala this year. Also in 2009, TCLacquired controlling stake (50.06%) in Rallis India Ltd., which is a leading player in thecrop protection business, thereby strengthening our basket of offerings to the farmer.Overall, TCL intends to increase its presence in the Indian farm while continuing effortsto secure critical inputs for the fertilizer business. On the consumer products front, TCLcontinues to leverage its strong brand equity and distribution network in the saltbusiness. Tata Salt regained the No. 1 Most Trusted Food Brand label in India. I-Shakti,launched in 2007-08 is already close to becoming the second largest national packaged saltbrand in the country. Overall our brands achieved a market share of over 59% amongnational salt brands. During the year, TCL also launched its latest innovative offering,the low cost water purifier TATA Swach, based on a new technology developed with thesupport of TCL Innovation Center.

INORGANIC CHEMICALS SEGMENT

TCL’s Chemicals Business consists of Industrial Chemicals business and ConsumerProducts business.

Industrial Chemicals

The Industrial Chemicals business manufactures and sells soda ash (Na2CO3), sodiumbicarbonate (NaHCO3) and other industrial chemicals such as STPP and cement. Of these,soda ash and sodium bicarbonate are products in which the Company is a global player.Additionally, operations in India produce STPP, gypsum and cement, and in the UK, theCompany manufactures calcium chloride.

Soda Ash

TCL with a capacity of approximately 5 million MT is the second largest soda ashmanufacturer in the world. About two-thirds of this capacity is based on natural soda ash.This unique feature helps TCL have a low energy intensity and environmental footprint. Thenatural soda ash (derived from trona) units are located at Lake Magadi in Kenya and atWyoming in the USA. The world’s largest deposits of trona occur in the Green RiverBasin of Wyoming. Synthetic soda ash and sodium bicarbonate are manufactured at Northwich,UK and Mithapur, India. This process uses brine (salt water) and limestone as key rawmaterials.

With manufacturing locations in the four continents of North America, Europe, Africaand Asia, TCL has the ability to optimally serve customers across the globe. Additionally,distributed sourcing increases the reliability of supplies and mitigates risks

associatedwith potential regional disruptions that can adversely impact the global supply chain.

In FY2009-10, global soda ash capacity increased by 7% to 61 million MT with the growthalmost entirely occurring in China. However, with demand shrinking by about 7% during theyear, global oversupply was further exacerbated. The economic downturn affected developedeconomies in particular. The US domestic market experienced a 10% demand destructioncombined with 18% reduction in output, Russian output reduced by about 17% with some unitsoperating at 50% capacity; demand in South America decreased by around 4% and WesternEurope witnessed a 5 million MT reduction in output. China continues to be the key playerin the industry as it accounts for major share of global capacity as well as consumptionand hence has a strong influence on prices in the soda ash market.

Soda ash is used in several sectors such as detergents, flat glass (used forconstruction and automobiles) and glass containers. The USA, Europe and Asia account forabout 95% of the production and 86% of the demand of soda ash. With the global financialturmoil severely impacting all of these markets, demand has shrunk considerably.

In FY2009-10, reduction in demand sent prices downward; however as raw material costsalso witnessed a simultaneous reduction, the overall impact of price erosion on the bottomline was somewhat mitigated. The second half of FY10 began to generate weak signals ofrevival and if this trend continues and there are no exceptional adverse events, in FY11,demand may begin to move up faster.

While it could take another full year before demand picks up in earnest in developedeconomies, the focus of growth has shifted to developing economies i.e. China, India,Middle East and South America. Soda ash demand in these markets is expected to be drivenby robust growth in auto as well as construction sectors.

Within India, the effects of the economic crisis were not as severe as elsewhere.Domestic demand for soda ash grew by about 8%. However, during the first half of the year,the India market attracted unprecedented dumping of soda ash from China. This led to theindustry association engaging with the Government of India, which, after rigorousinvestigations, imposed a safeguard duty on imports of soda ash from China. While in mosteconomies, glass is the major end use sector for soda, in India detergents are the largestconsuming sector. This phenomenon was responsible for the robust demand growth since thedetergent sector witnessed a strong growth rate. TCL’s strong relationships helpedconsolidate its position with key customers and channel partners. Internal initiatives forquality improvements derived from a deep understanding of customer needs continued withinformation technology driven tools and platforms increasingly being used to provide stepimprovements in customer service levels especially in the critical areas of supply chainand commercial matters.

While prices and volumes have come under strong pressure in the downturn, TCL hasproactively taken steps to counter its adverse effect through an enterprise-wide costreduction initiative. This initiative was implemented on a war footing and has helpedcompress costs, and generate cash across the organization.

Sodium Bicarbonate

Sodium bicarbonate is commonly used as a pharmaceutical ingredient, food additive,animal feed, and in air pollution control. TCL is the world’s fourth largest producerof sodium bicarbonate and the market leader in India and UK.

In Europe, our sodium bicarbonate brands, Briskarb and Alkakarb, have wide marketacceptance and an established position. In FY10, sales of bicarb from UK rose by 17%.While overall sales to Europe have decreased with closure of the plant in Netherlands, TCLcontinues to make efforts to maintain its share in the growing market. In The Indianoperations produced and sold a record tonnage of sodium bicarbonate in FY10. TCLanticipates significant growth in demand for this product over the next few years inIndia. To meet this growing demand TCL is augmenting its capacity at Mithapur by about 50%in the first phase. In FY10, TCL also launched its Alkakarb branded bicarbonate in theIndia market, aimed at animal feed application. Over a period of time, as the domesticmarket matures and grows, TCL will introduce other brands in its portfolio in India.

Cement

TCLs’ cement plant was set up in 1993 to handle solid wastes generated asby-products of soda ash manufacture. The Company uses technology to separate solideffluents and process them into Ordinary Portland Cement (OPC) and Masonry Cement. InFY10, the cement unit concentrated on establishing masonry cement in the local market inGujarat. TCL is the only producer of masonry cement in India. Masonry cements are used forpreparing bricklaying mortars, used in home construction. Masonry cement will enable TCLto convert its fly ash (generated in the power plant) into a useful building material. InFY10, TCL produced 453,901 MT of cement including masonry cement representing significantincrease over the previous year.

Consumer Products

Consumer products continued to grow in 2009-10 leveraging brand equity of TATA Salt anda strong distribution system. While continuing its leadership position in packaged saltmarket, Tata Salt regained the status of being the No. 1 Most Trusted Food Brand in India.Tata Salt has now won this accolade for six out of the last seven years thus reflectingthe trust households place in it. I-Shakti, which was rolled out nationally in 2007-08 isnow close to becoming second largest packaged salt brand after Tata Salt. Tata Salt Lite,a low sodium salt with 15% lower sodium content than normal salt, launched in December2007 was rolled out across India in a phased manner in 2008-09. Tata Salt Lite hasgenerated encouraging response from health conscious consumers across Metros and MiniMetros and has already become the market leader in the Premium Low-Sodium salt segment.All the brands continued to grow and together achieved a market share of over 59 % amongthe national salt brands.

During the year TCL took steps to increase salt production at its Mithapur plantthrough debottlenecking to further boost the volumes available for sale. Simultaneouslythe business also worked on improving its distribution reach and getting all its packingcenters HACCP certified. Steps have been taken to set up additional capacity for solarrefined salt to meet the growing demand for I-Shakti. I-Shakti brand has now been extendedto cooking soda to boost awareness and to create I-Shakti portfolio of products.

Water Purifier

TCL unveiled the Tata Swach water purifier in December 2009. Tata Swach is a householdwater purification system that does not require electricity and uses natural materials aswell as cutting edge nanotechnology. It aims to address the problem of water bornediseases like diarrhoea that are the leading cause of deaths in children across the globe.In line with the aim of providing ‘Living Essentials’, Tata Swach is an attemptto provide health and wellness to the consumers.

Tata Swach is one of the world’s lowest cost purifiers, providing safe drinkingwater at 10 paise per liter (approx 0.22 cents per liter). Fourteen patents have beenfiled so far for the technology used by it. The product has been launched in Maharashtraand Karnataka. Initial consumer feedback suggests Tata Swach has been adoptedenthusiastically by non-users, those who couldn’t afford water purifiers earlier dueto limited affordability. The product has shown healthy sales in the first three months oflaunch.

Key components of Tata Swach are being produced at TCL’s manufacturing facility atHaldia which has a production capacity of 1 million units per annum. It is planned toincrease the capacity at the existing plant as well as set up additional plants. The WaterPurification business will be rolled out nationwide and will simultaneously develop thenext line of products through various technology developments.

FERTILISER SEGMENT

Globally, while much of the developed world grappled with recession, economies of manydeveloping countries continued to grow in the year 2009-10. With this growth, a new middleclass is emerging creating demand for healthier foods and protein-rich diet of Meat &Poultry as well as lifestyle changes which impact other agri commodities e.g. fibre forclothing and energy through bio fuels. In India, for example, 70% of additional earningswould go towards spend on food. There are 75 million more people to feed in the world eachyear. These factors are continually increasing the pressure on the world farmers to growmore grain and oilseeds leading to more demand of nutrients, seeds and efficientirrigation mechanism. India would remain one of the key drivers for growth of nutrientsdemand in the world. Presently, India consumes 50 MMT (product) or 25 MMT (nutrient) offertiliser. Domestic capacities have, however, remained stagnant during the past decadethereby leading to 35% of total demand being met through imports.

In India, overall farm sector is characterized by low GDP growth, rural incomes haveshown a steady increase and forecast to grow more rapidly as a result of higher MinimumSupport Price (MSP) and government schemes like the National Rural Employment GuaranteeScheme (NREGS) and loan waiver. Deteriorating soil health and declining nutrient useefficiency has resulted in low farm productivity. A significant shift in cropping patterntowards horticultural & cash crops, driven by urban demand for quality fruits &vegetables, has been witnessed. Emerging trends like urbanization, water shortage,development of farmer interest groups, growth in employment in newer urban centres isresulting in significant opportunities for organizations like TCL that are well connectedwith the rural economy for making interventions in productivity augmentation through cropproduction & crop care, mechanization of farming, water management and possibly in therapidly growing food distribution and processing value chain.

The decision of the Government of India to decontrol the Phosphatic (P) and Potassic(K) fertilizer, implementing the Nutrient Based Subsidy (NBS) for "P" and"K" fertilizer and additional subsidy for fortified and micro nutrients (Boron-Bn and Zinc- Zn) effective from 1st April 2010 is a welcome step. The NBS would help inimproving agricultural productivity through use of soil and crop specific fertilizerproducts and would invite new investment in customized and in existing bulk nutrients.

Crop Nutrition

During the year the business continued its efforts from the previous years ofestablishing itself in the new and emerging crop nutrients market while continuing tomaintain its position in the core fertiliser business. The business environment was alsofurther shored up by announcement by the Government of India of policy shift way fromproduct based subsidy to a nutrient based one effective from April 2010. The NutrientsBased Subsidy

scheme is aimed at improving agricultural productivity by encouragingbalanced use of fertilizers and customization to suit crop and soil requirements.

A number of initiatives were taken during the year for further enhancing customerorientation. The business introduced customer circles as part of Customer Value Managementto enhance its engagement with customers. Mobile-Kheti pilot, an information servicethrough mobile phones was introduced for farmers and is now in the commercializationstage. Soil testing facilities were also upgraded by adding micro nutrient analysis to therange of analyses offered. These were supported by development of a Ready Reckoner forNutrient Recommendation in association with Center for Agri Solution & Technology(CAT) for different crops.

The business focused on conserving cash and an aggressive cash conservation initiativewas launched. The entire sale of bulk fertilizers was done on cash & carry basis withno discounts, related to the above effort the business also concentrated on improvinginternal efficiencies to further improve the cash flow with regard to submission andrealization of subsidy claims.

Urea

Urea sales of 12.2 lakh tonnes in a calendar year were the highest ever achieved,higher by 1.6 lakh tonnes compared to previous year. TCL’s urea manufacturingfacility at Babrala performed exceptionally well in FY10. With focus on safety the plantachieved highest ever accident free 11.46 Million Man hours. Post debottlenecking, Ureaproduction was also the highest ever at 12.3 lakh tonnes, higher by 2.1 lakh tonnescompared to last year. The plant also produced 2.4 lakh tonnes of neem coated Urea whichhelps reduce nitrogen losses and is beneficial to the farmer – the product was wellreceived in the market. The plant also recorded significantly improved energy consumptionlevels over previous year.

DAP, NPK and SSP

The operations at Haldia were adversely affected by political turmoil in the industrialbelt for the past 6-8 months. At the site there was strike for 34 days in the months ofFeb-Mar 2010 due to contract labor unrest. This impacted the production of DAP, Complexfertilisers and SSP. In spite of this problem production of 675,996 MT was only marginallylower by 2.30% compared to the previous year. Sales of these products from Haldia were704,036 MT, fractionally lower by 0.16% compared to the previous year. On the safetyfront, Haldia site was awarded 4 Star rating (Score of 89%) by British Safety Council.

Tata Kisan Sansar

Tata Kisan Sansar (TKS) is a service offering from Tata Chemicals of agri-inputs andservice solutions focused on improving farm income. TCL is evolving this into apartnership model that co-creates value with farmers. TKS outlets offer a variety ofservices and have become a trusted interface, providing a variety of farming solutionssuch as advice on crops, information on weather and market prices, application services,contract farming arrangements and market linkage for agricultural produce.

In 2009-10, the sales of Value Added Offerings (VAO) from TKS grew to Rs. 122 croreswhich was 21% higher than previous year. TKS Store brands contributed 59% of the total VAOrevenue. As a part of product delivery, six new products were taken through tolling routethat accrued revenue of Rs. 6.9 crores. Looking at a growing seed market, steps were takento firm up our presence in seeds segment. Two varieties, one each of

Millet and Corn fromPioneer seeds were taken for exclusive distribution through TKS network. Services weregiven a thrust in 2009-10 by commercialization of Foliar Nutrition Services (FNS) andpilot on Plant Protection Services (PPS). 14,000 acres were served under the applicationservices above.

The TKS network in current geographies was strengthened from 580 to 673. The TKSconcept was also expanded beyond the current geography and the concept was launched inMaharashtra. New TKSs contributed 17% of the total revenue. As part of its Agri BusinessInnovation Model (AGRIM) rural innovation endeavor, the business facilitated formation ofeight farmer producer companies. These producer companies were set up with the objectiveof helping farmers improve productivity and commercialize agri production and also to alarge extent solve supply chain problems of aggregation of produce.

Specialty Nutrients

TKS expanded its area of operations to new geographies of Rajasthan, M.P. and J&Ksolely with its Specialty product offerings such as calcium nitrate and zinc sulphate. Thebusiness crossed the Rs. 100 crores mark and achieved revenues of Rs. 125 crores a growthof 56% over the previous year.

Khet-Se: Fresh Produce Joint Venture with Total Produce, Ireland

The year 2009-10 was fruitful for Khet-Se in many areas, especially in the developmentof sourcing expertise, creating a Banana brand, and building exports experience forGrapes. Khet-Se has been able to create relationships with farmers in the Akluj area forprocurement of Bananas. Better quality bananas have resulted in Khet-Se getting a 40%premium in the market place. New channel partners were explored and added to traditionalexisting ones to enhance product presence. Special Banana Days for consumers wereorganized to bring about awareness about quality and health benefits associated with theKhet-Se banana. During the current year Khet-Se has exported 528 MT of grapes to Europe.Exporting Bananas to the Middle East and importing Apples are the two new areas beingfocused on.

NEW PROJECTS: Customized Fertilizers

In line with its objective and spurred on by the fillip it received in the form of theNBS scheme, the commissioning of 1.32 Lakh MT capacity Customized Fertilizer plant atBabrala is poised to proceed as per schedule and production is expected by the end ofSeptember 2010. The process of designing Customized Fertilizer formula was developed andvalidated and customized fertilizer foliar application was also successfullycommercialized during the year.

Babrala Capacity Doubling:

New Import Parity Pricing (IPP) based policy with a floor and ceiling price and gasutilization policy added impetus to undertake doubling the capacity of the Babrala plant.In year 2008-09, the proposed expansion of the plant received clearance from Ministry ofEnvironment and Forests. Discussions are underway with various technology companies fortechnology selection and for selection of Engineering, Procurement, Constructionmanagement contractors. Company will carry out studies in a phased manner so that capitalexposure is minimized till such time modifications are announced under the urea expansionpolicy of the Government. Company is also actively engaged with Government of India tosecure gas supplies for the project. Gas supply arrangement

is critical for the investmentto fructify.

RALLIS

In 2009, TCL acquired controlling stake (50.06%) in Rallis India Ltd., which is aleading player in the crop protection business, thereby strengthening our basket ofofferings to the farmer.

Globally the crop protection industry did not have a good year in 2009. The overallglobal market dropped by 6.5%, to come down to USD 37.8 billion. This was after anexcellent year in 2008, when the industry had grown by over 21%. Most multinationalcompanies registered a drop in their sales globally. Europe had the largest drop, followedby NAFTA and LATAM.

The Indian pesticide industry, however, is estimated to have grown by 10% during theyear. Kharif season was severely hit due to poor monsoon. Paddy acreage and yield havebeen impacted. Cotton was relatively pest free. Pulses, particularly red gram saw a higherusage of new chemistry insecticides. Rabi season was characterized by low pest and diseaseoccurrence in key crops, especially paddy. Lower water levels in Godavari basin led to anunprecedented drop in acreages under paddy in Andhra Pradesh during Rabi. Overall,Fungicides have grown at a faster rate propelled by higher usage of new molecules ingrape, chilli and potato. Herbicides category continued their growth path.

Rallis’ Crop Protection Chemicals business performed well overall, growing salesby 3% and achieving its highest operational profits ever in a difficult year. The DomesticFormulations and Institutional businesses did well in particular, growing by 21% and 31%over last year respectively. While International Business was affected adversely due toeconomic conditions, the division continued its focus on sustainable business for the longterm through exploring new contract manufacturing opportunities and increasing the base ofregistration led sales.

Biofuels

Globally, the bio-fuels industry went through a rough patch during 2008 amid foodversus fuel debates, and declining crude oil prices. However, in 2009, the bio-fuelsindustry showed a substantial improvement. Globally there was a year-on-year increase inbio-fuels consumption. Recovery in crude oil prices and correction in grain prices alsohelped in recovery of bio-fuels market. Blending Mandates were issued in EU and USA. Dueto a bumper crop of corn, China emerged as a major supplier of bio ethanol. Research anddevelopment focus shifted towards cellulosic bio ethanol.

The Company’s bio ethanol demonstration plant at Nanded has proved technicalviability of bio ethanol production based on sweet sorghum. As focus shifts towardssecond-generation bio-fuels, TCL plans to utilize the Nanded facility as a pilot plant forR&D of cellulose-based bio ethanol and bio butanol.

The Company has focused its field research on Jatropha at four multi-location trialsites. JOil saplings based on tissue culture propagation of Jatropha were planted at thesemulti-location sites and the results are very encouraging. The Company is exploringmarketing opportunities for large-scale plantations of JOil saplings with oil marketingcompanies and state governments.

ANALYSIS OF FINANCIAL PERFORMANCE

Financial Analysis of Tata Chemicals Limited (Standalone) – Year ended 31stMarch,

2010

1. Net Sales/Income from Operations:

Rs. in crorer

FY 10 FY 09 Change % Change

Sale of products 5,513 8,537 (3,024) (35)

Other Operating Income 64 37 27 73

Less: Excise Duty 100 175 (75) (43)

Net Sales/Income from Operations 5,477 8,399 (2,922) (35)

Net sales decreased by 35% during FY 10 over FY 09 mainly due to reduction in pricerealisation of fertiliser products partly offset by increase in volumes of Urea due todebottlenecking. During FY 10 there is substantial decrease in volumes of trading businessviz., imported DAP / MOP.

2. Other Income:

Rs. in crore


Other Income 193 95 98 (103)

The increase in other income is mainly attributable to profit on sale of tradeinvestments in quoted equity shares during FY 10.

3. Raw Material consumed:

Rs. in crore


Raw Material Consumed 2,081 3,474 (1,393) (40)

Raw material consumption showed significant decrease over FY 09 mainly due to lowerprices of Phosphoric Acid and lower prices & consumption in case of Sulphur.

4. Cost of Traded Goods purchased:

Rs. in crore


Cost of traded goods purchased 703 2,055 (1,352) (66)

Cost of traded goods purchased decreased by 66% mainly on account of significantreduction in the price and volumes of DAP and MOP.

5. Power and Fuel:

Rs. in crore


Power and Fuel 430 610 (180) (30)

The decrease in power and fuel cost during FY 10 over FY 09 is mainly on account ofsignificant reduction in the usage of Naphtha at Babrala works. In addition, during the FY10 there is reduction in the prices of furnace oil, coal, and pet coke.

6. Freight and forwarding charges:

Rs. in crore


Freight and forwarding charges 369 333 36 11

The increase in freight and forwarding charges during the FY 10 over FY 09 is due toincrease in sales volumes of Urea and Salt and also increase in average freight rates.

7. Provision for diminution in value of Current investments:

Rs. in crore

FY 10

FY 09

Change% Change

Provision for diminution in value of current investments

nil 56 (56) (100)

The provision for diminution in value of current investments Rs. 56 crores for the FY 09is primarily on account of fertilizer bonds. The investment in fertilizer bonds as at endof FY 10 is nil.

8. Other Expenses:


Other expenses 169 350 (181) (52)

Other expenses have gone down mainly due to significant decrease in foreign exchangefluctuation loss, Brand Equity Business Promotion and provision for diminution onfertiliser bonds during the year FY 10 compared to FY 09.

9. Investment:

Rs. in crore


Trade Investment 331 368 (37) (10)

Investment in Subsidiary Companies 4,314 3,447 867 25

Investment in Joint Ventures 176 176 - -

Current Investments 85 483 (398) (82)

Total Investment 4,906 4,474 432 10

Increase in investments in subsidiary companies was due to conversion of loan tosubsidiary into preference shares (HIPL) and purchase of controlling stake in Rallis IndiaLtd. Decrease in current investments was due to sale of fertiliser bonds during FY 10.

10. Inventories:

Rs. in crore


Inventories 611 961 (350) (36)

The inventories as on 31st March, 2010 was lower than the level of 31stMarch, 2009 by Rs. 350 crore primarily due to decrease in the stock of work-in-process andfinished goods ( Rs. 170 crores) as well as decrease in stock of raw materials (Rs.180crore). The raw materials inventory was lower than last year for Haldia works and tradingbusiness on account of decrease in prices of raw materials and traded products. Thedecrease was also partly due to decrease in the stock levels of work-in-process andfinished goods on account of lower sales volumes.

11. Sundry Debtors:

Rs. in crore


Gross Debtors 601 1,027 (426) (41)

Less : Provision for doubtful debts 20 26 (6) (23)

Net Debtors 581 1,001 (420) (42)

The debtors as on 31st March, 2010 was lower by Rs. 426 crores than level of 31st March,2009. The decrease is in line with the decrease in turnover.

12. Loans and Advances:

Rs. in crore


Loans and Advances 277 617 (340) (55)

The loans and advances reduced substantially as the loan given to subsidiary isconverted into preference shares during the financial year and accordingly there was anincrease in investments.

13. Cash Flow and Net Debt:

Net Cash flow from operating activities: The net cash from operating activitieswas Rs. 843 crores during FY 10 as compared to Rs. 584 crores during FY 09. The cashoperating profit before working capital changes and direct taxes during FY 10 was Rs. 954crores as compared to Rs. 1,232 crores during FY 09. The change in working capital, duringthe financial year, was mainly due to reduction in inventory and debtors.

Net Cash flow from investing activities: The net cash outflow from investingactivities amounted to Rs. 48 crores in FY 10 as against an outflow of Rs. 738 crores inFY 09. The outflow broadly represents capex of Rs. 183 crores and investment insubsidiaries of Rs. 487 crores partly offset by inflow of Rs. 530 crores on account of saleof investment.

Net Cash flow from financing activities: The net cash outflow from financingactivities was Rs. 706 crores during FY 10 as compared to inflow of Rs. 487 crores duringFY 09. There is a net repayment of borrowings of Rs. 274 crores during the current yearcompared to previous year inflow of Rs. 908 crores which is mainly on account of repaymentof term loans from banks and Buyer’s credit partly offset by proceeds on issue ofNCDs and receipt of FCNR loan.

Net Debt:

Rs. in crore


Secured Loans 249 249 - -

Unsecured Loans 2,697 3,427 (730) (21)

Total Debt 2,946 3,676 (730) (20)

Less : Cash and Bank balances 713 639 74 12

Less : Current investments 85 483 (398) (82)

Net Debt 2,148 2,554 (406) (16)

Net debt as on 31st March, 2010 is Rs. 2148 crores as compared to Rs. 2554 crores as on31st March, 2009. During the current fiscal year, the total debt decreased by Rs. 730crores as compared to the balances as on 31st March, 2009 mainly due to repayment ofbuyers’ credit and conversion /repayment of Foreign Currency Convertible Bonds,partly offset by proceeds on issue of NCDs and receipt of FCNR loan.

Financial Analysis of The Tata Chemicals Group – Year ended 31st March,2010.

1. Net Sales/Income from Operations:

Rs. in crore

Entity FY 10 FY 09 Change % Change

Tata Chemicals Limited 5,477 8,399 (2,922) (35)

Brunner Mond Group Limited 1,834 2,079 (245) (12)

General Chemicals Industrial Products Inc. 1,759 1,838 (79) (4)

Indo Maroc Phosphore S.A., Morocco 370 868 (498) (57)

Rallis India Ltd. 341 - 341 100

Others & Eliminations (237) (411) 174 (42)

Total 9,544 12,773 (3,229) (25)

Sales (net of duties) decreased by 25% during FY 10 primarily due to:

a. Inorganic Chemicals: Demand destruction which resulted into lower volumes andlower realizations (on account of global slowdown and Chinese competition) as compared tothe previous year.

b. Fertilisers: Reduction in price realizations partly offset by increase involumes of Urea due to de-bottlenecking. Also during FY 10, there is a substantialreduction in trading volumes viz. imported DAP and MOP.

c. Rallis India Limited: Rallis became a subsidiary of the Company in November 09,has contributed Rs. 341 crores towards increase in net sales during the current year.

2. Raw Material consumed:

Rs. in crore


Tata Chemicals Limited 2,081 3,474 (1,393) (40)

Brunner Mond Group Limited 239 414 (175) (42)



Others & Eliminations (143) (445) 302 (68)

Total 2,535 4,065 (1,530) (38)

Raw material consumed decreased by 38% as compared to the previous year due to: a.Inorganic Chemicals: Lower production volumes (mainly in Europe and Africa) marginallyoffset by increase in the prices of Raw materials (mainly brine). b. Fertilisers: Substantialdecrease in the prices of raw materials (mainly phosphoric acid, sulphur, etc)

partlyoffset by increase in production volumes in case of Urea and complex fertilisers.

c. Rallis India Limited: Rallis has contributed Rs. 150 crores towards increase inraw material consumption during the current year.

3. Cost of Traded Goods purchased:

Rs. in crore


Tata Chemicals Limited 703 2,055 (1,352) (66)


Others & Eliminations 10 (13) 23 (177)

Total 729 2,042 (1,313) (64)

The cost of traded goods purchased has reduced by 64% mainly on account of reducedvolumes and price of traded products in fertiliser business (mainly DAP and MOP).

Rallis has contributed Rs. 16 crores towards increase in cost of traded goods purchasedduring the current year.

4. Payments to and provisions for employees:

Rs. in crore


Tata Chemicals Limited 205 199 6 3


General Chemicals Industrial Products Inc. 266 396 (130) (33)


Others & Eliminations 7 20 (13) (65)

Total 746 870 (124) (14)

The Staff costs reduced by 14% mainly due to change in accounting policy for accountingof Employee Benefits (actuarial gains /losses) in case of overseas subsidiaries, in thecurrent year as compared to the previous year. The increase in case of Indian operationsis mainly due to revised wages.

Rallis has contributed Rs. 31 crores towards increase in staff costs during the currentyear.

5. Power and Fuel:

Rs. in crore


Tata Chemicals Limited 430 610 (180) (30)




Others & Eliminations 10 8 2 25

Total 1,041 1,376 (335) (24)

Power and Fuel charges have reduced by 24% compared to the previous year due to:

a. Inorganic Chemicals: Reduced production volumes (mainly Europe and Africa) andlower input cost (US and Indian operations);

b. Fertilisers: Reduction in the cost of input on account of increase in usage ofnatural gas compared to naphtha in the current year partly offset by increase inproduction volumes.

c. Rallis India Limited: Rallis has contributed Rs. 9 crores towards increase inpower & fuel costs during the current year.

6. Operation and Other Expenses:

Rs. in crore


Tata Chemicals Limited 1,161 1,081 80 7


General Chemicals Industrial Products Inc. 783 740 43 6



Others & Eliminations (4) 3 (7) (233)

Total 2,657 2,534 123 5

Tata Chemicals Limited

Operation and other expenses represent the following:

Rs. in crore

EntityFY 10

FY 09

Change % Change

Stores and spare parts consumed 253 195 58 30

Packing Materials consumed 210 196 14 7

Repairs 233 276 (43) (16)

Rent 59 68 (9) (13)

Rates and Taxes 104 78 26 33

Commission, discount and distributors’ service charges

92 77 15 20

Sales promotion expenses 76 60 16 27

Freight and forwarding charges 1,015 978 37 4

Others (*) 615 606 9 1

Total 2,657 2,534 123 5

(*) - Others include excise duty adjustment for stocks(net), insurance charges, leaserent, loss on sale of assets sold or discarded (net), provision for doubtful debts andadvances, provision for diminution in value of current investments, other expenses,expenditure transferred to capital account, directors fees/commission and change ininventory of work-in-process and finished goods.

The operation and other expenses during the FY 10 have increased by 5% compared to FY09 due to:

Increase in other expenses is mainly due to higher maintenance expenses, salespromotion expenses (launch of new products), freight and forwarding expenses (mainly dueto increase in freight cost per tonne), rates and taxes (on account of higher volumes)offset by reduction in rent, repairs, provision for diminution in value of currentinvestments (loss on sale of fertiliser bonds) and other administrative expenses.

Rallis has contributed Rs. 73 crores to increase in other operating expenditure duringthe current year.

7. Sundry Debtors:

Rs. in crore


Tata Chemicals Limited 582 1,002 (420) (42)





Others & Eliminations (98) (66) (32) 48

Total 1,112 1,636 (524) (32)

The debtors as on 31st March, 2010 was lower by Rs. 524 crores (32%)compared to previous year. This decrease is in line with reduction in turnover.

8. Cash Flow and Net Debt:

Net Cash flow from operating activities: The net cash from operating activitieswas Rs. 1,984 crores during FY 10 as compared to Rs. 1,028 crores during FY 09. The cashoperating profit before working capital changes and direct taxes during FY 10 was Rs. 1,920 crores as compared to Rs. 1,954 crores during FY 09. The working capital during FY10 reduced by Rs. 352 crores, mainly due to reduction in inventory (with reduction infinished inventory and raw materials inventory) and Debtors.

Net Cash from investing activities: The net cash outflow from investingactivities amounted to Rs. 438 crores in FY 10 as against an outflow of Rs. 685 crores inFY 09. The outflow during the current year represents acquisition of fixed assets (net ofsale proceeds) of Rs. 589 crores, acquisition of Rallis India Ltd - Rs. 461 crores partlyset off by net inflow of Rs. 530 crores on account of proceeds on sale of investments (netof purchases). The outflow in the previous year mainly represents acquisition of fixedassets (net of sale proceeds) of Rs. 733 crores.

Net cash from financing activities: The net cash outflow from financingactivities was Rs. 1,403 crores during FY 10 as compared to Rs. 92 crores during FY 09.There is a net repayments of borrowings (net of proceeds) of Rs. 652 crores during thecurrent year mainly on account of repayment of term loans from banks and Buyer’scredit partly offset by proceeds on issue of NCD’s and receipt of FCNR loan (previousyear- net proceeds from borrowings Rs. 526 crores mainly due to Buyer’s credit).

Net Debt:

Rs. in crore

Particulars FY 10 FY 09 Change

Secured Loans 1,839 2,325 (486)

Unsecured Loans 3,155 3,959 (804)

Total Debt 4,994 6,284 (1,290)

Less: Cash and Bank Balances 1,159 990 169

Less: Current Investments 198 483 (285)

Net Debt 3,637 4,811 (1,174)

A reduction in net debt by Rs. 1,174 crores represents a reduction in the gross debt byRs. 1,290 due to: a. Conversion into Equity / repayments of Foreign Currency ConvertibleBonds and repayment of buyer’s credit. b. Foreign exchange gain on $ 475 million onECB loan on account of fluctuation of USD-INR rate from Rs. 50.72 as on March 31, 2009 toRs. 44.90 as on March 31, 2010.. c. Scheduled repayments of external debts by GeneralChemicals and Industrial Products INC, Brunner Mond Group Limited. d. Partly offset byproceeds on issue of NCDs and receipt of FCNR loan by Indian Operations

INNOVATION AND TECHNOLOGY

Tata Chemicals Innovation Centre

During 2009-10, the Innovation Centre (IC) focused on taking to market, promisingproducts and processes developed in the laboratory. The Innovation Centre contributedsignificantly to developing ‘Swach’, the nanotech water purifier. During thisperiod, significant progress has been made in the areas of biofuels, nutraceuticals andnanomaterials with four products entering the test marketing stage. As of 31st March 2010,there were 37 scientists in the IC with an eclectic mix of expertise in the areas ofnanotechnology and materials science, biotechnology, inorganic chemistry and molecularbiology along with catalysis and bioengineering experts. There are dedicated resources forissues related to IPR and a business development group. Current projects / areas ofactivity include Water purification, Alternate Energy including Bio Diesel and BioEthanol, Catalysis and green chemistry, Nano materials (including coatings), bio materialsand advanced / smart materials, Specialty and fine chemicals and Nutraceuticals.

With the continued focus on Innovation Center, the Company has acquired land forconstruction of a world class research center in Pune.

Tata Chemicals Centre for Agri-Solutions and Technology

In order to provide appropriate advice to farmers on farming practices in general andcrop nutrition practices and solutions in particular, a development centre viz. Centre forAgri Solutions & Technology (CAT) has been set up in Aligarh (U.P.) This Centre isstaffed with experienced scientists who are working in various areas. During 2009-10, CAT,Aligarh was involved in research and developmental work related to crop nutritionalaspects. The centre developed customized fertilizer (CF) basal grades for wheat, rice,maize, potato and sugarcane for operational regions around Babrala and sweet sorghum forgrowing regions in Maharashtra state. Crop specific CF (foliar) grades were developed onR&D based field trials and were quite effective on cost-benefit basis. Geo referencedsoil samples from 21 districts around Babrala are being tested at Plant Nutrition Lab ofCAT for chemical characteristics, for delineating soil fertility zones in the operationalterritory around Babrala region. The centre is also in the process of obtaining Departmentof Science and Technology approval as an approved R & D facility.

HUMAN RESOURCES

As on March 31, 2010 TCL had 4,656 employees – 3210 of them in India and

1446overseas. Industrial Relations were cordial across the geographies of its operations.However, operations at Haldia were impacted because of an illegal strike by contractworkmen. In India, at Mithapur a new wage agreement was signed with the Workers’Union. During the year, levels of engagement with different employee segments haveincreased and are vindicated by the increase in the employee engagement score on allparameters.

The Company has a comprehensive Long-term strategic plan for Human Resources that isaligned to its long-term strategy. It has robust talent management and succession planningprocesses in place and closely tracks the talent pipeline for managing the current andfuture needs of the organization. At TCL, the focus of learning and development is onbuilding the capabilities of employees so that they are fully geared to meet theexpectations of different stakeholders of the Company. This is also combined with itsstrong belief that employees are central to the Company’s transformation and growth.On an average during the year, the Company invested around 10 man days per employee intraining for managerial personnel and around 5 man days per employee in non-managementlevels. Having built a strong foundation on the culture of excellence, many capability andcapacity building interventions were done for employees in the functional, managerial andleadership areas.

The Company understands the need to effectively communicate with all stakeholders andcontinued with its efforts to ensure effective and transparent two way communication. TheCompany was recognized for its communication efforts with fourteen National and oneInternational award in 2010 for excellence in internal and external stakeholdercommunications. The print media Share of Voice (SOV) in the Chemicals and FertilisersIndustry space was 57% and the Communication Effective Index (CEI) for internalcommunication during the year was at an all time high. A comprehensive communication planto sensitize employees on the nuances of Sustainability was launched and successfullyimplemented.

SUSTAINABILITY

Safety, Health and Environment (SHE)

The focus on improving work place safety is continued and the total recordable injuryfrequency rates are maintained at levels matching world class. There was one regrettablefatal incident on 12 August 2009 at Mithapur and one at the Mombasa Port facility ofMagadi Soda in Kenya on 17 September 2009. All necessary corrective and preventive actionshave been taken at all sites based on the learnings from these incidents. Healthmonitoring of Company employees, commensurate with the work environment have continued andthere have been no significant observations relating to deficiencies in workplace healthand hygiene conditions. The SHE performance is being reviewed at all review forums. Allsites in India are certified to OHSAS 18001, ISO 14001 and BSC 5 Star Safety Rating. TheBabrala operation is certified to Responsible Care RC 14001. The Babrala and Haldiaoperations are certified to BSC 5 Star Environmental Sustainability rating.

Mithapur Plant has continued the DuPont Safety Way engagement to develop world classpractices. The Company received recognitions from National Safety Council of India,International Fertiliser Association, Fertiliser Association of India, Indian ChemicalCouncil, Gujarat Mines Safety for its effort on SHE.

The Company has complied with environmental consent conditions at all its locations.The Company continues to monitor "Green Manufacturing Index" on targets onenergy and

water consumption, waste recycle and use of renewable energy.

The Company continues to be a "Responsible Care" Logo holding company grantedby Indian Chemical Council.

All operations outside India follow the local safety regulatory requirements and thework of integrating the measuring and reporting the SHE performance on common metrics andpractices is taken up. The Brunner Mond UK operations are certified to OHSAS 18001.

Tata Chemicals launched this year the Wellness program to engage employees ondimensions like physical health, financial health and emotional health.

Energy Conservation, Climate Change and Clean Development Mechanisms

TCL is engaged in fostering Sustainability and introducing Climate Change strategiesinto its operations. The Corporate Technology and Sustainability Group is buildingnetworks within the Company and outside to work on sustainable manufacturing practices andrespond to the emerging expectations on Climate Change issues. TCL is signatory to UNGlobal Compact and the Global Reporting Initiative (GRI), Responsible Care, CII-Mission onSustainable Growth-Code for Ecologically Sustainable Businesses and the Global CorporateRoundtable on Climate Change at Earth Institute, Columbia University. During the year, itcontinued to hold the prestigious Responsible Care Logo granted by Indian ChemicalCouncil. TCL Babrala received in the year the CII-ITC Sustainability Prize. Tata ChemicalsSustainability Report for the India operations assured to GRI G3 Protocol is now posted onthe website.

Manufacturing operations are working on "Green Manufacturing Index" to reduceenergy consumption, minimize water consumption, reduce pollution load by adopting theconcept of Reduce, Recycle & Reuse and has set targets in each aspect.

TCL is actively pursuing the Clean Development Mechanism (CDM) Process of UnitedNations Framework Convention on Climate Change (UNFCCC) to derive benefits from energyreduction and alternate fuel projects at its various plant locations and several projectshave been identified across Mithapur, Babrala and Haldia with potential revenues for theprotocol period up to 2012. Four projects are already registered with UNFCCC against which30,500 MT CER were issued and about successfully transacted for sale and about 30,000 MTCertified Emission Reduction (CER) are under review. TCL is also evaluating thepossibility of availing carbon credits for specialty fertilizers, bio-fuels, waterpurifier and new products from Innovation Center. TCL networks with several internationalagencies and Carbon Exchanges and interacts with Tata Corus Green Trade for aggregatingthe projects over a period of time to realize the best value. TCL is a member of theSteering Committee and Working Group of Climate Change formed for the Tata Group’sResponse to Climate Change and the CII Forum on National Action Plan for Climate Change.

The sustainability perspective in different regions globally is being managed as perregional mandates like the EU ETS in Europe and US EPA legislative actions in US andstrategic plans are being worked out. Brunner Mond has proposed to build a new SustainableEnergy Plant on the site of the disused power station at the plant site in Lostock. Thiswill reduce reliance on expensive, high carbon fossil fuels by building a highly efficientsustainable energy plant that will produce around a third the heat energy needs fromsustainable fuel - a non-hazardous, solid fuel made from pre-treated waste and someplant-derived material, known as biomass. This would reduce GHG emissions,

by preventingmethane release from landfills and reducing the need to burn fossil fuels.

Community Engagement & Environment Management

Care for the community and sustainability concerns are an integral part of TataChemicals’ Value system. Over the years, TCL has embedded these values into itsoperations in a variety of ways, such as promoting and establishing the Tata ChemicalsSociety for Rural Development (TCSRD), undertaking and establishing programs and processesfor greening and conservation and promotion of volunteerism within the organization. Anintegrated approach is adopted towards development, wherein, creating social capitalwithin the communities that we serve is given prime importance. This year the program atBabrala was the recipient of CII – ITC sustainability award.

"Uday" – a Rural BPO, set up in partnership with Tata Business ServiceSolutions (TBSS) at Mithapur and Babrala to help bridge the digital divide between therural and urban population, continued to provide employment to 266 educated rural youth."Okhai" is now becoming a well-known brand for handicrafts and garments made bycommunities around Mithapur and Babrala. More than 450 women are associated with Okhai.Going forward, Okhai will integrate all such initiatives that are linked to rural productsunder it with an aim to empower the artisans associated with it.

The Company has developed expertise in water management and continues to providefacilitation and resources for making more and more villages surrounding our sites waterself-sufficient. A research study has been initiated to understand the impact of waterinitiatives, and the chart the future course. Ponds are an integral part of the Bengaliethos and at Haldia a program for scientific pond management has been taken up. A modelvillage has been developed to showcase the benefits of pond management and create marketlinkage for the fish produce.

On the conservation front, the Company continues to support the "Dharti KoArpan" programs. These include efforts to save the Asiatic Lion by barricading 1000open wells in the Gir Wildlife sanctuary in association with the Gujarat Forest Departmentand Mangrove plantation in association with International Union for Conservation of Nature(IUCN). TCL has also promoted eco-clubs in the rural schools and 20 such clubs promotingunderstanding and awareness about environment and ecology have been formed. TCL hascontinued to provide support to "Save the Whale Shark Campaign". This year, wetook this further to initiate a scientific study on the whale shark so that we can ensurethe long term survival of the largest fish in the world which is in the criticallyendangered list. We also initiated work on coral reef securitization. Both these programsare being done in collaboration with Wildlife Trust of India.

TCL also continued to provide development support to the community through programs onhealth (eye camps, Swasthangan), education (Bal Utsav, adult education) and buildinginfrastructure as required. The employees of Tata Chemicals have participated wholeheartedly in all of these programs and the employee volunteering program HOPE was alsoinitiated in the corporate offices. Employees volunteered more than 24,000 hours towardscommunity development during the year.

Community welfare and development activities have also been carried out at ourinternational locations. At Magadi Soda – Kenya, the programs focused on:

• Community engagement process

• Leveraging support from stakeholders

• Water supply to the local communities and establishment of Magadi water andsanitation company.

• Championing the construction of and improving infrastructure of PattersonMemorial School to support education

• Providing scholarships to children

• Health care, HIV& AIDS prevention program

• Community Skills Upgrade program

• Promotion of community co-operative for taking up outsourced jobs.

Magadi Soda Foundation was established to further increase the focus on development inthe region. During this year, monthly consultative SWOT Committee meetings with thecommunity were held to deliberate on issues affecting the Company and the community. Thesemeetings enhanced a peaceful co-existence with the local community. Quarterly meetingswere held with stakeholders in Magadi division to coordinate development issues in thedivision. The Company collaborated with the district steering group through Arid Lands andNeighbors Initiative Alliance for water trucking. The main aim was to support thepastoralists’ access to water for livestock and domestic use during the dry season.Agricultural and livestock extension programmes within the division were supported throughpartnership with the government departments i.e. National Agricultural & LivestockExtension Programme (NALEP). Special support was provided to the Patterson Memorial Schoolfor construction of administration block, class rooms, laboratory, teachers’residences and solar powered lighting system.

INTERNAL CONTROLS AND RISK MANAGEMENT

The Company believes that good internal control is an intrinsic part of the overallGovernance process and freedom of management should be exercised within a framework ofappropriate checks and balances. TCL remains committed to ensuring an effective internalcontrol environment that provides assurance on the efficacy of operations and security ofassets. The Company has robust systems for internal audit and risk assessment andmitigation and has an independent Internal Audit Department with well established internalcontrol and risk management processes both at business and corporate level. The head ofthe Internal Audit Department reports directly to the Chairman of the Audit Committee ofthe Board of Directors, thereby ensuring total independence.

The Corporate Audit function plays a key role in providing to both the operatingmanagement and the Audit Committee of the Board an objective view and reassurance of theoverall control systems and effectiveness of the risk management process across TCL andits subsidiaries. Corporate Audit also assesses opportunities for improvement in businessprocesses, systems and controls and provides recommendations designed to add value tooperations.

The scope. and authority of the Corporate Audit Department is derived from the AuditCharter approved by the Audit Committee. Internal Audits at TCL are performed by anin-house team of multi-disciplinary professionals comprising Chartered Accountants,Engineers and MBAs. Reviews are conducted on an ongoing basis, based on a comprehensiverisk-based audit plan, which is approved by the Audit Committee at the beginning of theyear. The internal audit department which operates on a

decentralized basis, continuouslymonitors the adequacy and effectiveness of the internal control environment across theCompany and the status of compliance with operating systems, internal policies andregulatory requirement. Besides, validation of IT security and Business Continuity Plansreceives focused attention from the internal audit team. The Audit Committee meets on aquarterly basis to review and discuss the reports submitted by the Head Audit and alsoreview closure of all agreed actions. The Audit Committee also meets the StatutoryAuditors separately to ascertain their views on the adequacy and efficacy of internalcontrol systems.

At TCL, we believe that every employee has a role to play in fostering an environmentin which controls, assurance, accountability & ethical behavior are given highimportance. To supplement the reviews carried out by the internal audit teams, we followan elaborate system of Control Self Assurance (self audit) which is carried out throughthe year. The CSA coverage includes all critical departments in the organization and alsoimportant third party operations like CFA’s & Salt Packing Centres. The ITenabled CSA process provides a good bottom-up approach and build up for the CEO/CFOcertification as required by clause 49 of the listing agreement, besides helping inawareness creation of controls across a wide segment of TCL employees.

Risk Management and Internal audit functions complement each other at TCL. Over theyears, the Enterprise Risk Management (ERM) process at TCL, has evolved into a robustexercise entailing a balanced bottom up and top down approach, covering all units,functions and departments of TCL and its subsidiaries. The basic framework followed is theinternational standard AS/NZS 4360:1999.

TCL’s risk identification and assessment process is dynamic and hence the Companyhas been able to identify, monitor and mitigate the most relevant strategic andoperational risks both during the period of accelerated growth as well as through therecessionary phase of the economy we recently witnessed.

Integration with Strategy and Business Planning: Identified risks are used as aninput whilst developing the strategy and business plans. The Company strives to identifyopportunities that enhance organizational values while managing or mitigating risks thatcan adversely impact its future performance.

The Risk management framework at TCL encompasses the following activities:

• Risk Identification: A periodic assessment across the Company and thesubsidiaries together with a trigger based assessment is undertaken to identify andthereafter prioritize significant risks. This assessment is based on an online riskperception survey, environment scanning and inputs from key stakeholders.

• Risk Measurement and control: Owners are identified for all identified risks andthey go on to develop and deploy mitigation strategies. Measurement indices are used toevaluate effectiveness of the mitigation plans.

• Risk Reporting and Review: Besides detailed review by the Executive Committee,Enterprise Risks are reviewed quarterly by the Audit Committee of the Board. Risk ownerspresent status updates on their mitigation plans.

Some of the major risks and concerns identified are:

1) Continued Recessionary Pressure: Though markets & economies havebegun to recover from the unprecedented turmoil witnessed in the previous year, reducedconsumer wealth and consequent demand continues to be a concern.

Additionally, thewithdrawal of fiscal stimulus packages across the globe further accentuates the situation.While the breadth of TCL’s portfolio and our geographic spread has helped mitigatethe crisis to an extent, we will continue to protect our profits through a new wave ofenterprise wide initiatives on cost compression.

2) Financial Risks: TCLs breadth in international operations, our foreigncurrency borrowings and our dependency on imports for the phosphatic fertilizers, continueto subject us to risks from changes in the relative value of currencies. Our elaborateTreasury policy ensures that foreign exchange exposures are within prescribed limits andthe use of foreign exchange forward contracts is resorted to judiciously. We have aseparate Risk Management Committee which monitors & helps mitigate our currency andinterest rate risks.

3) Government Subsidy on sale of fertilizers: Effective April 1, 2010, theGovernment has introduced a Nutrient Based Subsidy for Phosphatic & Potash basedfertilizers. This change could result in margin pressures over the short/medium term.Uncertainty regarding the timing of receipts of government subsidy in our fertilizerbusiness is a major factor affecting cash flows and hence working capital requirements.Here again, our treasury policy anticipates this risk and adequate precautions have beenbuilt in to address the issue.

4) Input costs and securitization of raw materials for fertilizer business: Theprices of raw materials for phosphatic fertilizers are subject to economic conditions andglobal demand-supply balances. With the change in policy to Nutrient Based Subsidy,it’s imperative that the imports are competitive. While TCL has entered into longterm supply contracts for its key raw materials, the pricing of these are normally formulabased. TCL actively monitors the environment for opportunities and maintains good supplierrelationships to ensure minimal impact from commodity price fluctuations.

5) People and Talent: Attracting and retaining talented employees is core toour success. TCL has over the years embarked on several "people initiatives" toenhance the environment and help employees achieve their personal and professional goals.Work life balance is consciously pursued. TCL’s performance appraisal systems arewell integrated to our business objectives and help bring out the best in individuals.Investment in employees through training is constantly made to ensure we equip ouremployees for challenges in their roles.

6) Safety and Environment related risks: TCL is conscious of its strongcorporate reputation and the positive role it can play by focusing on social andenvironmental issues. Towards this, the Company has set very exacting standards in safety,ethics and environmental management. The Company continues to recognize the importance ofsafety and environmental issues in our operations and have established comprehensiveindicators to track performance in these areas. TCL values the safety of our employees andconstantly raises the bar in ensuring a safe work place.

The Company continues to benchmark its Internal Audit and Risk Management practiceswith global best and ensures that high standards are set to meet the challenges of theexternal environment.

Cautionary Statement

Statements in this Management Discussion and Analysis describing the Company’sobjectives, projections, estimates and expectations may be ‘forward lookingstatements’ within the meaning of applicable laws and regulations. Actual resultsmight differ substantially or materially from those expressed or implied.

Importantdevelopments that could affect the Company’s operations include a downtrend in theagriculture, fabric wash and glass industry— global or domestic or both, significantchanges in political and economic environment in India or key markets abroad, tax laws,litigation, labour relations, exchange rate fluctuations, interest and other costs.

Customers catering: Tata Chemicals broadly operates in three sectors — living essentials (household products), industry essentials and farm essentials (crop nutrition and protection) — giving it a wide and diverse customer base. The core concept behind its product and services portfolio is to provide inputs for better living.

The company’s sustainable approach to business has led it to work towards optimising the use of raw materials, resources and technology and creating a portfolio of products that find application across industries and consumers. It has taken several key steps to develop a high-tech and sustainable product portfolio by leveraging its business and scientific expertise.

Tata Chemicals has established the TCL Innovation Centre in Pune with world-class R&D capabilities in the emerging areas of nanotechnology and biotechnology. TCL's Centre for Agriculture and Technology at Aligarh provides advice on practices and solutions related to farming and crop nutrition. The company has also entered into a joint venture with Temasek Life Sciences Laboratory in Singapore for the development of better varieties of seedlings and agronomic practices.

Living essentialsBasic products for daily living, such as salt, sodium bicarbonate or baking soda products, fresh produce and water-related products The company’s foray into household and consumer necessities started with an idea – using iodised salt to resolve health issues arising out of iodine deficiency in India. Tata Chemicals has launched a range of iodised salts in India and today is considered a business superbrand in Indian industry.

Today, the Consumer Products Business (CPB) comprises branded iodised edible salt, sodium bicarbonate and water purifiers, among other offerings. Besides the iconic brand Tata Salt, the company's products include a new refined salt brand called I-Shakti; Tata Salt Lite (contains 15 per cent less sodium than ordinary salts and caters to health-conscious low-sodium salt users); and Topp Salt, a brand of edible salt created for export. I Shakti, a cooking soda, is marketed as a leavening agent.

To leverage its reach with farmers and housewives, TCL started Khet-Se, a fresh fruit and vegetable distribution business in India, in 2007 as a 50:50 joint venture with Total Produce of Ireland. Total Produce is the third largest fruit and vegetable distribution company in the world and Europe’s largest fresh produce provider. The first Khet-Se centre has already opened in Punjab; the next will come up in Maharashtra. Khet-Se will source fruits and vegetables for the fruit and vegetable retailer through its conveniently located wholesale stores.

Safe drinking water is still a pipe dream for the majority of India’s lower middle class and poor. TCL met this challenge by launching Tata Swach in December 2009. Tata Swach is a unique and innovative water purifier that combines low-cost ingredients such as rice husk ash with nano-technology. The product provides performance, convenience and, above all, affordability, and serves a basic human right of millions of consumers.

http://www.tataswach.com/

http://www.khetse.com/

http://www.tatachemicals.com/our_company/businesses.htm#top


Industry essentialsProducts that form essential inputs to diverse industries across the glass, detergents, mining and chemical processing sectorsSoda ash, one of TCL’s main products, finds use in several industries, including the manufacturing of glass, pulp and paper, detergents and industrial chemicals. TCL’s customer base includes some of the world’s leading and most recognisable brands and companies, such as Procter & Gamble, Church & Dwight, Unilever, Saint Gobain, Pilkington, Asahi, Owens Illinois, Guardian, PPG, Vale, Xstrata and Pilkington.

Tata Chemicals' journey started as a synthetic soda ash manufacturer at Mithapur, Gujarat. The salt works spread across 60sqkm can produce over 2 million tonnes of solar salt, the base raw material for almost all the 27 basic chemicals that the company produces. The Mithapur plant is the largest integrated salt works and inorganic chemicals complex in this part of the world. It has an installed capacity of 875,000 tpa -- about 34 per cent of the country's capacity -- making it one of the largest producers of synthetic soda ash in the world.

The company's soda ash capacity took a significant leap in early 2006 when it completed the acquisition of the UK-based Brunner Mond Group, one of the world’s leading manufacturer of associated alkaline products, and added manufacturing plants in Northwich in the UK and Lake Magadi in Kenya. Lake Magadi is a major alkaline evaporate deposit in Africa’s Great Rift Valley.

In early 2008 TCL successfully completed the acquisition of US-based General Chemical Industrial Products (GCIP), providing access to some of the world’s largest and most economically recoverable trona ore deposits that are then converted to soda ash, and to manufacturing facilities located at Green River Basin in Wyoming.

Along with soda ash, TCL also produces sodium bicarbonate, bulk chemicals such as sulphuric acid, phosphoric acid, sodium tripoly phosphate (STPP), caustic soda, bromine-based products, chlorine based products, gypsum and cement.

TCL's cement business grew out of a sustainability and environment activity; the cement plant at Mithapur was set up to consume the solid waste generated during the manufacture of soda ash. By instituting a more efficient filtration process, TCL has worked towards capturing by-products and effluents of the soda ash manufacturing process. The thousands of tonnes of effluent, thus diverted from negatively loading the environment, have been converted into a usable commodity – cement – that is used for high quality construction in western India.

Farm essentialsFarm inputs needed to improve crop health and productivity, such as fertilisers, pesticides, specialty nutrients, seeds and agri-servicesThe crop nutrition and agri-business unit has a presence across three key agro-nutrients – nitrogen, phosphorus and potassium. Nitrogenous fertiliser (urea) is manufactured at Babrala in the northern state of Uttar Pradesh; phosphatic fertilisers, DAP and complexes are manufactured at Haldia in West Bengal in eastern India; MOP is imported.

Currently, TCL is a dominant player in the crop nutrition segment and its subsidiary Rallis India is a leader in the crop protection industry. Through Rallis, TCL is looking to enhance value creation as well as access to business synergies in the crop nutrition and protection sectors, and thus strengthen its presence in the entire agri-input space.

The company also helps small farmers enhance farm yields by providing end-to-end solutions through a network of Tata Kisan Sansars (farmer’s centres) in the Indian states of Uttar Pradesh, Punjab, Haryana, Uttarakhand, West Bengal, Bihar and Jharkhand. Tata Kisan Sansars are one-stop resource centres; they stock seeds, pesticides and fertilisers; lease out farm equipment and implements to farmers who cannot afford to buy expensive modern machinery; provide agronomy services like soil testing and mapping and fertiliser testing; arrange credit and crop insurance, and even provide buyback facilities.

http://www.tatakisansansar.com/



http://www.tatachemicals.com/products/sodium_bicarbonate.htm


New business

Biofuels | TCL Innovation Centre | Centre for Agricultre and Techonology (CAT)

Tata Chemicals is leveraging its expertise in chemicals and agri-businesses to develop strengths in new sustainable technologies in the nanotechnology and biotechnology space. The company is actively working to build a significant presence in the biofuels sector. Its Innovation Centre is working on technologies that can mitigate climate change through “green chemistry” and product offerings that will make a difference.

BiofuelsIn 2007, Tata Chemicals decided to enter the biofuels business in India. A 30KL per day bioethanol facility, using sweet sorghum as feedstock, has been set up at Nanded, Maharashtra. Arrangements have been made with farmers in districts in and around Nanded, for growing sweet sorghum. The plant has proved the technical viability of bioethanol production based on sweet sorghum. The company has also undertaken field research on Jatropha, a non-edible tree crop for biodiesel production. Tata Chemicals has set up a research farm in Aurangabad and has started varietal trials for developing a package of practice. The company has also set up multi location trials for Jatropha in Gujarat, Maharashtra, Tamil Nadu and Andhra Pradesh.

TCL Innovation CentreTata Chemicals Innovation Centre was set up with the objective of developing world-class R&D facility working on more than 20 projects in the areas of nanotechnology and biotechnology. It has now moved from being TCL-centric to a having a much wider base of clients, from the Tata group as well as external companies.

The team of scientists at the centre is working in the following areas: Advanced materials

Specialty chemicals

Green chemistry and catalysis , Alternate energy

Nutraceuticals

Centre for Agriculture and Techonology (CAT)The CAT has been set up in Aligarh, Uttar Pradesh to provide advice to farmers on farming and crop nutrition practices and solutions. This centre is staffed with experienced scientists who are working in various areas of agri-technology. Specific projects have been undertaken on determining area and crop specific nutrition products and combinations, soil health tracking through indexing etc.

The CAT is expected to provide TCL a competitive advantage in the future and will provide a very strong base for the growth of the company in its customised fertiliser business, specialty crop nutrients business and agribusiness

Competition with other competators:

Last Price

Market Cap.

Sales Net Profit

Total Assets

http://www.tatachemicals.com/innovation/nutraceuticals.htm

http://www.tatachemicals.com/innovation/green_chemistry_and_catalysis.htm

http://www.tatachemicals.com/innovation/specialty_chemicals.htm

http://www.tatachemicals.com/innovation/advance_materials.htm

http://www.tatachemicals.com/our_company/businesses.htm#cat

http://www.tatachemicals.com/our_company/businesses.htm#tcl

http://www.tatachemicals.com/our_company/businesses.htm#bio


(Rs. cr.) Turnover

Tata Chemicals 361.2 9,201.80 5,476.64 434.78 7,221.58

United Phos 183.4 8,087.17 2,555.13 181.29 4,075.41

Pidilite Ind 154.7 7,829.90 1,949.77 293.5 1,359.09

BOC India 318.95 2,720.14 807.99 53.24 1,175.73BASF 635.45 2,590.73 1,394.14 96.81 865.77

Guj Flourochem 214.65 2,357.93 997.24 334.16 2,066.18

Himadri Chem 48.95 1,888.16 505.93 107.34 1,150.65

Gulf Oil Corp 112.05 1,110.92 976.06 45.07 726.94Solar Ind 599.65 1,038.82 483.5 31.27 294.91

Guj Alkali 126.5 928.98 1,315.87 171.84 1,714.31

Balance Sheet comaprision to the competators balance sheet

------------------- in Rs. Cr. -------------------

Tata Chemicals United Phos Pidilite Ind BOC India BASF

Mar '10 Mar '10 Mar '10 Dec '09 Mar '10

Sources Of Funds

Total Share Capital 243.32 87.91 50.61 85.28 40.77

Equity Share Capital 243.32 87.91 50.61 85.28 40.77

Share Application Money 0.00 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 4,031.75 1,833.62 887.05 971.15 825.00

Revaluation Reserves 0.00 0.00 0.00 1.68 0.00

Networth 4,275.07 1,921.53 937.66 1,058.11 865.77

Secured Loans 249.24 226.08 218.45 0.000.00

Unsecured Loans 2,697.27 1,927.80 202.98 117.61 0.00

Total Debt 2,946.51 2,153.88 421.43 117.61 0.00

Total Liabilities 7,221.58 4,075.41 1,359.09 1,175.72 865.77

Tata Chemicals United Phos Pidilite Ind BOC India BASF

Mar '10 Mar '10 Mar '10 Dec '09 Mar '10

Application Of Funds

Gross Block 3,803.50 1,603.54 801.18 1,065.81 629.62

Less: Accum. Depreciation 2,211.06 630.76 388.92 375.76 386.31

Net Block 1,592.44 972.78 412.26 690.05 243.31

Capital Work in Progress 237.65 29.33 282.62 426.53 9.52

Investments 4,905.59 687.87 510.66 15.00 9.00

Inventories 611.19 287.01 250.63 67.57 349.51

Sundry Debtors 581.60 747.66 238.76 120.32 258.00

Cash and Bank Balance 624.96 131.35 32.83 17.68 27.29

Total Current Assets 1,817.75 1,166.02 522.22 205.57 634.80

Loans and Advances 391.39 1,851.08 108.99 233.86 244.98

Fixed Deposits 87.69 252.35 0.29 54.54 136.55

Total CA, Loans & Advances 2,296.83 3,269.45 631.50 493.97 1,016.33

Deffered Credit 0.00 0.00 0.00 0.00 0.00

Current Liabilities 1,457.74 781.51 380.27 417.12 358.18

Provisions 353.19 102.51 97.68 32.70 54.21

Total CL & Provisions 1,810.93 884.02 477.95 449.82 412.39

Net Current Assets 485.90 2,385.43 153.55 44.15 603.94

Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00

Total Assets 7,221.58 4,075.41 1,359.09 1,175.73 865.77

Contingent Liabilities 560.26 878.21 124.89 168.74 29.80

Book Value (Rs) 175.74 43.71 18.53 123.87 212.36

Tata and its competencies company and their strategies:-

Tata Chemicals started with competition. First there was global competition due to falling duties and, at times, even dumping. While Tata Chemicals is an efficient manufacturer of soda ash, it was not geared to withstand competition from the US industry, which harnesses natural soda ash from lakes full of it. Domestic competition too cropped up when its largest customer, Nirma, went ahead and set up its own half a million tonne soda ash plant last year.

Tata Chemicals was a pioneer in vacuum evaporated pure salt, but tremendous pressure was brought on it through aggressive marketing by Hindustan Lever under the brand name: 'Annapurna'. Clearly, for HLL, salt was

a cheap way to establish an all-embracing food brand, Annapurna. Consequently, there were huge dealer discounts. The delay in putting up a urea plant in Babrala too brought its own woes in terms of interest during construction. At the same time, the current fertiliser policy, based on plant by plant allocation of subsidies, gives no incentives to efficient producers while shielding inefficient ones.

As a result of all these factors, profits have been highly volatile and slipped from Rs 288 crore in 1998-99 to Rs 117 crore in 1999-2000. Consequently, the stock too is trading around Rs 50 down from a high of Rs 200-plus a few years ago. Clearly, the main strength of Tata Chemicals is in manufacturing.

Rallis, on the other hand, is the exact opposite. Its main strength lies in marketing and distribution. Interestingly, Rallis is one of the oldest companies still alive and kicking in India. A Greek entrepreneur, John Eustratio Ralli, founded Ralli Brothers in India in 1851, which was rechristened Rallis India in 1948. From a trading company Rallis transformed itself into an agrochemical company, spreading its activities from manufacturing and formulating to distribution and marketing, primarily under the leadership of Vijay Rai. However, it also diversified into pharma, trading in phosphatic fertilisers, seeds, etc and set up some subsidiaries, including one in Israel. Rallis has pesticide manufacturing plants in several locations: Navi Mumbai, Akola (Maharashtra) Hyderabad, Ankleshwar (Gujarat) but its main strength is its sales force that has made Rallis a premier brand in all the important agrochemical markets. Rallis is also furiously focussing and has gotten rid of its engineering and pharma business. Arguably, Rallis' R&D centre in Bangalore is the best in the Indian agrochemical industry. It is the only toxicology lab in India of international standards.

But Rallis has lost money in its subsidiaries and has a huge debt burden of Rs 500 crore. As a result, Rallis' record on the profitability front has been dismal. Even leading to a shocking Rs 25.6 crore loss last year. Even when the going was good Rallis was not a very profitable company. With a top line that has grown from Rs 1,171 crore in 1996-97 to Rs 1,446 crore in 2000-01, the profits were a meagre Rs 22.80 crore and Rs 45.42 crore respectively. Of course, a lot of top line contribution comes from trading, where the margins are low.

As chairman Dr Freddie Mehta said in his address during the AGM on 10 September 2001: "The reported loss during 1999-2000 is RS 25.6 crore. It actually includes a loss of Rs 33.2 crore, which had to be absorbed in the clean-up operations, and Rs 19.3 crore non-operational income, mainly due to the sale of pharma brands and property in Chennai. The losses came from: a write off of Rs 12.96 crore due to earlier debits, Rs 6.66 crore from bulk drugs, sericulture and garment operations. Provisioning Rs 5 crore for more bad debts and Rs 8.5 crore loss in the JV in Israel."

Though Rallis expanded rapidly under the leadership of Vijay Rai, the recent dismal performance saw some heads roll. The result: exit Rai in not too savoury circumstances, enter young Rajeev Dubey from Tata Metaliks in September 2000.

The scene at Tata Chemicals too was no different. The poor performance of Tata Chemicals also brought in management changes, leading to the rather dramatic exit of Manu Seth in August 2000 and the entry of Prasad Menon, a veteran of the fertiliser industry. Gopalakrishnan, who is vice-chairman of Tata Chemicals and is also on the board of Rallis, was pressed into service at Bombay House to set the house right. Gopalakrishnan immediately saw the synergy in the two companies and, together with Menon and Dubey, started a restructuring operation in earnest. Brainstorming about Tata's strategy in chemicals led to clear goals: the aspiration to become the lowest-cost bulk industrial chemicals and to take a major initiative in rural India with a bouquet of products and services to farmers distributing nutrients, fertilisers, pesticides and agronomical advisory services.

The outcome of this brainstorming and close coordination between Rallis and Tata Chemicals has also led to speculation in the media about a merger of the two. Gopalakrishnan, however, pooh poohs it. The trio is now totally focussed on turning around the two companies and recharging them to unassailable levels in customer

focus and manufacturing excellence.

Gopalakrishnan is so confident about the results of the process underway that he says: "Excellence achieved in Tata Steel is a result of things set in motion several years ago. I am confident that what is happening in the chemical companies of Tata Group — Rallis and Tata Chemicals — will lead to similar results in about three years." Skeptics might consider it an overoptimistic statement, considering the dismal performance of the two companies.

Business India spent several weeks visiting both Tata Chemicals and Rallis plants in Babrala, Mithapur, Hyderabad, and the famous pesticide market Pattanam Bazaar, in Guntur (Andhra Pradesh), which is reputed to be the largest in Asia, transacting over Rs 250 crore of business in a small street less than a kilometre in length. We also visited the Rallis R&D centre in Bangalore and spoke to farmers in the Pesticide Efficacy Advisory Centre (PEACE) in Andhra Pradesh and in Tata Kisan Kendras in the villages of Uttar Pradesh. The conclusion was clear: adversity seems to have come as an opportunity to these companies. Rapidly they are being transformed into powerhouses that can lead a major Tata initiative into agro business.

Of course, the exercise started with lopping off some old businesses and assets. For example, Rallis has merged some of its subsidiaries like Ralchem into itself while selling off the pharma business to the Shreya group for Rs 18.14 crore. It has also exited from the dyes and sericulture businesses. Gopalakrishnan also discovered a large piece of valuable real estate in Andheri (Mumbai), which was not being used for anything other than entertaining top management cadres. It has been sold for a sizable sum of Rs 133 crore to Tata Sons. At that spot Tata Sons plan to build a world-class campus for the software geeks of Tata Consultancy Services, thereby also exiting from several pieces of real estate in the more expensive Nariman Point. Using group synergies, the expertise in instrumentation at Tata Honeywell and in IT-enabled manufacturing in TCS, the two companies have been pressed into manufacturing Tata Chemicals.

Old dogs and new tricks In the second phase of proactive steps, the first major initiative has come in HR. On the one hand, the Mithapur plant had excess manpower, which has been pruned through a generous employee separation scheme. While this was expected, what came as a pleasant surprise to insiders was the hefty hike that employees got in both Tata Chemicals and Rallis. "We were working hard even earlier, but there were rumours of the Tatas withdrawing from Rallis. But this hike came as a great morale booster, which showed that the leadership clearly believes that despite current problems the company has a great future," says KT Vijaykumar, regional sales manager of Rallis in Vijaywada.

It had a similar effect in Tata Chemicals as well. According to Anil Vaidya, COO, at Mithapur works, the most interesting HR fall-out has come from an industrial accident. The fire in the power plant in Mithapur earlier this year destroyed the plant and set back production in soda ash, salt and cement plants, but it also brought in great teamwork. The power plant was rebuilt and brought on line in record time and plant engineers like IL Momin and AG Vaidya take great pride in the same.

The momentum generated in this disaster management and rebuilding has greatly helped in pushing forward 'Action 500', a campaign to reduce the cost of production of soda ash by Rs 500 per tonne by December 2001. Vaidya already claims to have achieved it and is preparing to launch the next one to reduce the cost by Rs 1,500/tonne. Gopalakrishnan and Menon, however, are cautious on this front and say "let the auditors substantiate the claim and then we will announce it". A healthy dose of realism no doubt. But the goal is very clear: Tata Chemicals should become profitable even in a zero-duty regime despite competition from natural soda ash producers.

On the fertiliser front too, Tata Chemicals is working hard to gain higher efficiencies. The fact that there is price control and a consequent cost-plus regime, or that Tata Chemicals is already one of the most energy efficient

plants has not deterred them. However, the most interesting change that is coming over Tata Chemicals is on the marketing front. "Strictly speaking, we did not have a marketing group five years ago, when I joined after a long stint in Rallis," says Kapil Mehan, VP, sales and marketing. Tata Chemicals had preeminent market share in soda ash, close to 60 per cent and customers used to get their quota. With imports and new capacity added by Nirma, there came a rude shock. Since then its market share has fallen to about 40 per cent in soda ash and margins have eroded too. "Now we have a team of 30 people in marketing and there are client service officers for top-10 customers as in an ad agency," adds Mehan. Tata Salt, which had a preeminent position in the table salt segment, has also been facing competition from HLL's Annapurna and smaller manufacturers. Mehan and his team are working on a massive ad campaign to capitalise on the fact that Tata Salt is the only vacuum evaporated pure salt in India. However, to cover the flanks they are also test marketing a cheaper crushed salt under the brand name Samudra.

However, it is on the fertiliser front that Tata Chemicals has taken a major strategic initiative. Under Darbari Seth's leadership, it set up a few modern centres, called Tata Kisan Kendras, in some parts of India, starting with Ujjhani near Babrala (UP). Today they have blossomed into the front end of Tatas' ambitious and far-reaching foray into agro business. Every Tata Kisan Kendra (TKK) has an agronomist who can advise farmers on what cropping pattern to use or diagnose a particular pest attack in their crop and recommend the appropriate agro chemical to be used. These centres also have a godown for fertilisers and a store that sells anything from Tata Salt to pesticides. Several training sessions are held here for the surrounding farmers, who enroll themselves in the TKK club. There is a waiting list to become a TKK member and a handful of people are chosen from each village. The centres have all modern amenities, including conference rooms and cafeterias and look futuristic in the impoverished UP milieu. For the sake of completeness, another service that is being offered is modern farm machinery on hire at affordable rates.

When Business India visited the TKK in Ujjhani there was a day-long training session going on, covering veterinary science to cropping patterns and agronomical information on new seeds and agrochemicals, in which 100 farmers were participating. The participants had come on their own expense and consisted of farmers between 20 and 60 years of age. The community development team at Tata Chemicals, consisting of architect couple Vivek and Alka Talwar, has plans to propel these villagers into the 21st century. They are working on a major Geographic Information System project that will contain the most detailed rural database ever collected. You just point and click on any piece of land in any surrounding village in the computer kiosk at a TKK and you can get details of cropping pattern, satellite-based information regarding soil fertility contours, crop yield estimation and even pest attacks. A farmer can just drop in at a TKK and get all the information he needs — including the much-coveted land records.

Doesn't all this sound like expensive social work when the company is not doing too well? "Not at all. In fact, the godown within a TKK sells about 3,000 tonnes of fertilisers and makes the whole centre self-supporting," says BB Singh, who looks after fertiliser marketing.

It is this front end with farmers that Rallis excels in. "The Tata brand equity in rural India is a revelation," says Rajeev Dubey, but he is understating Rallis' own network in bringing this about. But since there are so many pesticide companies and any new product gets copied very fast, how do you maintain growth? There are two ways of doing it. One is to constantly pump your R&D to come with better molecules and formulations. Dr MS Mithyantha and his team at Rallis R&D centre at Bangalore are lining up such a pipeline. A factor which reduces the time from lab to market for such products is this lab itself. It being arguably the best toxicology lab in India, they can study the effect of any pesticide molecule on birds, bees, animals and so on, and file the required data for regulatory approval. Even though this procedure is not as elaborate as that for new drugs, it is still quite expensive and time consuming. Even MNCs who have discovered the molecules and are using them elsewhere have to again file this data in India before introducing these molecules.

Since they have a rather elaborate set up, Rallis is offering this service to other companies and making money on technical services. Quietly, Mithyantha's chemists and entomologists

have also come up with novel molecules which they are in the process of patenting. If one of these turn out to be an effective pesticide molecule, then that will be the first agrochemical to be discovered in India.

There is a sea change on the marketing front in Rallis as well. "We have gotten rid of high-volume, low-margin pesticides but the primary change that has come about in the last year is that the top management is on top of the market situation and there is no dumping of inventory on us. Today we produce what we need and thus we are able to get rid of the discount wars and realise better prices and also lower inventory in our distribution network," says B Raj Kumar, regional sales manager of Hyderabad.

The other way to maintain farmers' mindshare is to have an extensive network of agronomists who act like crop doctors. There is one major difference between pharma marketing and agrochemical marketing. Pharma companies need only to educate the doctors about new drugs and make sure that the pharmacies carry them. After all, the consumers — patients — have intrinsic belief in what the good doctor prescribes. In the case of agrochemicals, there is no such structure. As a result, farmers depend on word of mouth and half-baked information and tend to overuse pesticides, or the wrong ones and at the wrong time. They need farm doctors who can test soil chemistry and advise on what fertiliser to use when and in what quantity. And when there is a pest attack it should be diagnosed correctly and correct advice should be given on what agrochemical to use. "Incorrect practices not only lead to extra chemical load on the crops and hence on the consumers, but also at times serious resistance developing in the pests. Rallis is doing it with an army of paraagronomists. For example, in Vijaywada alone we had deployed over 1,000 youth, armed with in-house training and a moped, to stay with farmers during the busy season and deliver service," says KT Vijay Kumar.

The result of this kind of interface is an amazing amount of bonding. Business India was witness to an impromptu farmers' meeting in a village near Aligarh (UP), where Dubey was questioned by about 30 farmers on supplies of particular fertilisers and agrochemicals. The sense of bonding was so strong that these farmers were least intimidated by the presence of the managing director of the company himself. Moreover, they seemed to be surprisingly well-versed in phytochemistry.

Obviously, a quiet revolution is waiting to happen in the countryside and companies like Rallis and Tata Chemicals are playing their part in hastening it. There is immense hunger among the farmers for agronomical services, along with proper products. Rallis is also exploring seriously the seed market and Dr. A K Deshmukh and his team at Pattancheru, near Hyderabad, are busy developing new hybrids and high-yielding varieties.

Rallis is also cautiously venturing into corporate agriculture by trying to reduce the role of intermediaries. "It is clear that there is a multi-billion dollar opportunity in food processing and agro business, but the experience of the corporate sector in this field is very mixed. There is Pepsi's experience in Punjab, there is Hindustan Levers' experience with wheat growers and atta. There is also an unrelated but relevant experience of a lot of business houses with aqua culture. That is why on a small scale we are doing some things in Chitradurga in Karnataka and a different experiment in Madhya Pradesh and Haryana," says Dubey.

Tatas, ICICI and HLL have launched a 'Partnership Project' for contract farming in wheat and basmati rice in Haryana and Madhya Pradesh to provide a profitable model for agriculture. Rallis and ICICI have also tied up with big retail chains like Food World and Nilgiris and juice maker Sunsip for contract farming of fruits and vegetables in Karnataka.

Thus two of the oldest companies in the Tata stable have weathered a financial crisis and the mixed legacy of earlier management and are restructuring themselves. There are turnaround strategies ad nauseum in corporate India, but what distinguishes the current change underway in Tata Chemicals and Rallis is the aggressive vision of the group to position itself firmly in the hinterland of industrial India. In the process they are acting as agents of social change even in the most backward villages, where the state has withered away.

Marketing strategy:-

The chemistry is clearly changing at Tata Chemicals. For starters, the exit of Mr Manu Seth from the Tata Chemicals board in August 2000 gave way to chemical industry veteran Mr Prasad Menon coming in as managing director, and Mr R Gopalakrishnan from the Tata Sons board as executive director. This comes at a time when the company is also attempting to transform itself from a mere manufacturing company to a service-oriented, competent player in the marketplace.

Like most of its peers in the Tata Group, Tata Chemicals too was labouring under the burden of the past. The company is the largest producer of synthetic soda ash with its completely integrated plant at Mithapur, which also produces nearly 300,000 tonnes of vacuum evaporated sodium chloride (common salt) as a byproduct. Also gypsum (another byproduct) is used to make half a million tonnes of cement. What the company, however, lacked was marketing skills to support its manufacturing strengths.

With a soda ash capacity of 8 lakh tonnes per annum and a nearly 60 per cent market share, there was a sense of complacency. With falling import duties, Tata Chemicals was not armoured to withstand imports from the US, and what perhaps acted as a catalyst is its largest consumer Nirma, setting up its own 42,000-tonne soda ash capacity. As a result, the market share dropped to 42 per cent.

In the branded salt business, too, Tata Chemicals faced stiff competition from Hindustan Lever, who used their distribution network to launch the Annapurna brand across India. Tata Salt, despite being the first player in the branded salt market, lost a sizeable share to the Annapurna and the Captain Cook brands, largely due to its inexperience as an FMCG player.

In fertilisers also, despite suffering many initial glitches, its urea plant of 7.5 lakh tonne capacity at Babrala, Uttar Pradesh, is one of the most technologically advanced, cost efficient manufacturing facilities in the country. However, price controls and a cost-plus regime does not help much. The fertiliser policy that shields inefficient players by allocating subsidies based on plants, has not helped either.

Result: Profits had dwindled from Rs 288.63crore in 1998-99 to Rs164.95crore in 2000-01 and return on capital employed had slipped from 17.41 to 11.26 during the same period.

Clearly, a constructive effort was the call of the day. "We realised that we had inherent manufacturing strengths, but we had to enhance our operational efficiencies to become a formidable player and we have made significant progress in that direction," says Mr Menon.

Operational revampTo enhance its operations, the company, with the help of McKinsey, has chalked a four-pronged strategy: restructure the marketing team, focus on the customer, streamline supply chain management and cut costs to improve margins, and look out for alliances and partnerships to grow in new markets.

"We want to become the lowest cost producer of synthetic soda ash," says Mr Mukundan, vice-president (strategy and business development). As the first step towards achieving that goal, the company had launched a programme called Action 500, which was essentially to bring the variable cost of production down by Rs 500 per tonne. Currently, the cost of production is around Rs 3,800 to Rs 4,000 per tonne.

Having achieved that, the next step is a project called Manthan, designed by McKinsey, which will be a continuous effort to improve working capital and inventory management and rationalise costs. "With Manthan we have set no targets, the idea is not to (merely) accept what is existing but continuously strive to achieve higher cost reductions across all functions," says Mr Mukundan.

"What will perhaps stand the company in good stead in the long run is its recent focus on marketing," says an industry expert. Mr Kapil Mehan, vice-president (sales and marketing) who joined the company five years ago, had to virtually set up a marketing team, currently at 30. That, in a way, provided the much needed fillip to a non-existing function at Tata Chemicals. To market soda ash, the company has not only widened its distribution network but has also set up dedicated client servicing teams for its top few customers.

More market-friendlyThe company has also set up a separate marketing team to handle the table salt business. "Marketing salt is a totally different ball game and needs the strengths of an FMCG company," says Mr Mehan. Earlier, the company had sold off its detergent brand Tata Shudh to Jyoti Laboratories, because it did not have the relevant expertise to market an FMCG product like detergent.

Also, with Tata Shudh, Tata Chemicals was competing with its own customers, since the largest consumers of soda ash are detergent companies. "It was difficult to get into that cutthroat competition with our own customers; philosophically that business did not suit us," says Mr Mehan.

Today, the company is also toying with the idea of launching a cheaper crushed salt under the brand Samundar. The test marketing is underway and this is likely to boost its salt business further. Already with an estimated 37 per cent market share, it is ahead of HLL’s Annapurna which has 35 per cent.

On the fertiliser front, the Tata Kisan Kendras (TKKs) have provided the plank to reach out to customers. "We have realised that to increase our urea sales we have to reach out to the farmers directly," says Mr Menon. The TKKs are set up in areas where the company has a dominant presence, and farmers are advised on cropping patterns and the use of pesticides and seeds. These centres also sell everything from fertilisers to Tata Salt, and modern farm machinery is offered on hire. "These are meant to provide complete farm solutions to the farmers," says Mr Menon.

"These initiatives are in line with a long-term strategy of brand-building," says an analyst. The company will benefit from eventual price decontrol due to superior margins and a firm relationship with its customers.

Even in its cement business, the company has revamped its marketing strategy. While it was marketed by ACC, the company now markets its own produce. Tata Chemicals was scouting for a buyer for its cement unit, but due to its size it has been unable to do so. "We have an open mind as far as cement is concerned. We will either sell it or rope in a partner to take the capacity up to one million tonnes," says Mr Menon. Meanwhile, the company is marketing its cement business under the purity plank and trying to get it back in the black.

What is perhaps encouraging is that in the third quarter of this fiscal, despite taking a Rs 20 crore cut in its top line on account of the energy norms, the company has posted a 26 per cent increase in bottom line ."We are confident of a stable future because of the measures we have initiated within the organisation," says Mr Menon.

The company has also revamped its human resource policies, by implementing an emolument scheme, based on performance. The company has also reduced the number of layers within each department to avoid procedural delays in any function.

To reward its shareholders, Tata Chemicals has launched a buyback option, for which the total outgo is expected to be around Rs 125crore. Tata Chemicals has also realised that while it is important to get the basics right, so is looking for greener pastures. In its second phase of engagement, McKinsey has been given the mandate to chalk out areas of growth for the company. The company is also in talks with the government to pick up a stake in National Fertilizers Limited (NFL) and Paradip Phosphates Limited (PPL). "We have completed the due diligence and are waiting for the government’s decision," says MrMenon. The decision on PPL is likely to precede that of NFL.

The Tatas as well as the company’s investors are hoping that Mr Menon and his team will act as the right catalyst to bring about these changes at Tata Chemicals.

Taking an example of TATA salt:-

Tata Salt's new communication strategy attempts to elevate the brand to the status of a national icon desh ka namak

(the country's salt). With this positioning, Tata Chemicals, the manufacturers of Tata Salt, hopes to break the brand

clutter caused by recent entrants in the salt market.

The pioneer in India's branded-salt industry, Tata Salt has held the No.1 position in the country since its launch in

1983. It has a 37 per cent share of the branded-salt market and an 18 per cent share of the total salt market.

Tata Chemicals' salt story began in 1983, when it needed fresh water for the boilers that produced soda ash at its

Mithapur plant. Fresh water was scarce, so the company set up a process to generate it by using seawater, a freely

available resource. Salt, of high quality and purity, was a by-product.

Says Kapil Mehan, vice president (sales and marketing), Tata Chemicals: "At that time both Unicef and the Indian

government were promoting the intake of iodine for health reasons. Salt is the most economical and convenient

dietary vehicle for iodine consumption."

The Tata brand advantage

These factors led to Tata Chemicals taking up salt production. "We marketed the product by prefixing the Tata name

to it," says Mr Mehan. "Our positioning statement emerged: Namak ho Tata ka, Tata namak." The line remains an

audio mnemonic for the brand. The communication was built around the fact that Tata Salt, India's first iodised salt,

was manufactured by a Tata company.

The first competitive challenge came in the early 1990s with the launch of Captain Cook. Positioned as a freeflowing

salt, it helped create awareness about brands in the salt segment. Tata Chemicals responded by releasing ads to

counter Captain Cook's claims. As more consumers moved from non-branded or local products to the national

brands, Tata Salt's inherent superiority and strong distribution network ensured its continuing growth in terms of

market share and category expansion.

In 1996, Annapurna, another national salt brand, was launched. It was positioned on the health benefits of iodine.

According to Mr Mehan, by that time iodisation had become almost a hygiene factor and consumers did not perceive

it as a differentiator.

The rising number of players in the branded-salt segment got Tata Chemicals to think of strategies to combat the

possibility of its market share being eroded. In 1998, the company conducted a comprehensive market research

study to understand the consumer psyche. The results ranked Tata Salt high on attributes such as iodisation, free

flow, purity and whiteness (consumers thought of Tata Salt as a saltier salt). The next commercial showed Sanjeev

Kapoor, the famous chef, endorsing the product for these attributes.

Pressing the purity button

By late 2001 several brands had entered the market. In September, 2001, Tata Salt was relaunched with a new

advertisement that talked about its purity, a core property of the brand. The packaging was also changed to a more

premium-looking pack, a response to consumer feedback.

Tata Chemicals brought in consultants to track the brand and review its marketing strategy. The results showed that

Tata Salt's brand equity index was 7, which was ahead of the competition. But a study by Quadra Consultancy on the

marketing strategy revealed that, though the brand awareness was still strong, the differences between the players

was getting cloudy.

"In order to sustain a competitive advantage over a long period of time, what is needed is for the consumer to

perceive you to be different from others," adds Mr Mehan. "The best way to differentiate is to connect with the

consumer at an emotional level."

The challenge, according to Mr Mehan, was to take purity, a rational product benefit, and create an emotional link

with the consumers. A new agency, Bates India, was chosen to work on the communication. Says JS Mani, vice

president and general manager, Bates India: "A strong fact that emerged from our research was that consumers were

troubled about the gradual erosion of our value system. Another factor was that salt is deeply rooted in grassroots

values. Putting them together, we linked the product (salt) with integrity of character."

The advertisements, released in August 2002, show ordinary people doing their duties with integrity and commitment.

"Integrity should not be seen only in the context of a uniform, or as integral to the occupation," says Mr Mani. Apart

from a policeman and an army officer, there is a railway linesman checking the fishplates in spite of heavy rains, and

a taxi driver returning a cell phone but refusing the reward.

The emotional link

"Our campaign is a reassurance for Tata Salt users," says Mr Mehan. "By using Tata Salt, a pure salt, he is a pure

human being. That's the emotional link."

The communication route is interesting because Tata Salt's leadership position is implied, not stated. The

commercials end with the consumer stating: "Maine desh ka namak khaya hai." "If everyone is eating the salt, then it

suggests that Tata Salt is the leading salt in the market," says Mr Mani.

Additionally, the company decided to contribute 10 paise on every packet of Tata Salt sold between August 15 and

September 15, 2002, towards the education of deprived girl children. The Desh Ko Arpan programme encouraged

ordinary individuals to make a difference. Over Rs35 lakh was collected and given to Child Relief and You through

this initiative.

The new campaign got an enthusiastic response from all Tata Chemicals employees, who signed a specially

designed poster reiterating their commitment to the product. "It was a very emotional event, " says Mr Mehan. "They

felt very proud to be part of a successful company with a No.1 brand."

Tata Chemicals had taken over the distribution of Tata Salt in December 2001 to make it more efficient. "The selling

and logistics functions are now separate entities," says Mr Mehan. "Sales and distribution teams concentrate on

developing markets and improving the penetration level of Tata Salt. The team is structured and focused like an

FMCG company."

In order to strengthen relations with its channel partners, the company organised a workshop to help them manage

business through insights into marketing and strategy skills. The workshop was greatly appreciated by the partners.

Potential to grow

Mr Mehan feels that the brand has tremendous potential to grow, since 70 per cent of the market consists of non-

branded salt. "Our focus is on two levels: to retain our core users and bring in new users."

The efforts have been successful. Tata Salt was voted the fourth most trusted brand in a survey conducted recently

by The Economic Times. "We were pleasantly surprised by the result, since salt was thus far not considered a

product exciting enough to feature in the survey," says Mr Mehan. "We knew that our brand was the best. This is due

to a combination of personal experience, the Tata name and product quality, which people have experienced for so

many years."

Tata Salt has a strong presence in the northern, western and eastern regions of India. The south is a weak area, but

the company is currently evaluating options to tackle this weakness. There are also plans to go global, and

discussions for Bangladesh and the Middle East are on the anvil.

"With the current level of activities in the market, we are looking at enhancing Tata Salts market share to 38-40 per

cent," says Mr Mehan. "But, more than that, we are looking at expanding the base of the category so as to bring in

new users."

Manufacturing:-

It is the most common thing on every dining table and yet it is the most important. To the richest and the

poorest, salt provides saltiness and basic taste to food; and if it is Tata Salt it also provides the requisite daily

dose of iodine.

Launched in 1983, Tata Salt pioneered packaged iodised salt in India. It offered millions of housewives an

opportunity to move away from the loose, unbranded salt of suspect quality to the reassurance of clean, pure

salt, guaranteed by India’s most trusted business house. Today, Tata Salt touches the lives of 40 million

households in India and is one of the two Tata brands (the other is Tata Indicom) which directly impact a large

part of the Indian population.

Tata Salt enjoys market leadership in the branded salt category with a 44-per cent market share. As a brand, it

is extremely popular, enjoying 100-per cent awareness among customers, the highest for any food brand

tracked in various studies. The trust that consumers have in the brand is reflected by the fact that since 2003, it

has been consistently ranked the number one food brand (except in 2007 when it was at number 2) by The

Economic Times Brand Equity ‘most trusted brands’ survey.

Quite an impressive achievement, especially when one considers that Tata Chemicals — the company which

manufactures Tata Salt — had no experience in marketing consumer products. It was essentially a company

producing soda ash. And salt was merely a by-product of using steam to make soda ash, at the company’s

Mithapur plant in Gujarat, India.

The decision to brand and sell this by-product as iodised table salt was adventitious. It so happened that in early

1980s the Indian government identified iodised salt as the most effective vehicle to deal with iodine deficiency

diseases rampant among the masses. Concerned

with the widespread health problem, then industry

minister ND Tiwari approached Darbari Seth, the

then managing director of Tata Chemicals, to find

a solution. It was a worthwhile cause and Mr Seth

decided to support the government’s health

campaign to eradicate iodine deficiency disorders

through iodised salt. So, desh ka namak (salt of

the nation) is not just a marketing slogan; Tata

Salt actually came into existence to serve a

national need.

However, for a company focused on bulk

manufacturing, the move to consumer products

was not easy. Tata Chemicals had to learn

lessons in packaging, distribution, branding and

marketing. It also had to face the challenge posed

by loose, unbranded salt, which dominated the

market then. Added to this was the reluctance of

consumers to pay more for a commodity as

common as salt. With no knowledge of how the

market would work or respond but with the

intention of helping the Indian government in its

cause, Tata Chemicals went ahead with the

launch of Tata Salt in 1983, pioneering the cause

of iodisation in India.

The product was revolutionary by all standards. It

was branded. It was iodised. And it was vacuum

I-Shakti

I-Shakti, the solar refined salt brand of Tata

Chemicals (TCL), brings the goodness of

iodine to the masses at an affordable price.

For the extremely budget-conscious

housewives in rural and semi-urban areas,

it provided an opportunity to upgrade from

loose, coarse, unbranded salt to the

benefits of good quality, free-flowing

iodised salt. Launched in October 2006, I-

Shakti reaches 20 million households, has an annual

consumption of 150,000 metric tonnes and is the second

biggest salt brand in the country, after Tata Salt, with a market

share of 14 per cent in the branded salt category according to

the Nielsen Retail Audit, August 2009.

TCL has laid down stringent quality specifications for I-Shakti.

This has resulted in good manufacturing practices at facilities

and improvement in solar salt quality. Each packet of I-Shakti is

endorsed by the International Council for the Control of Iodine

Deficiency Disorders for containing an adequate quantity of

iodine.

I-Shakti conducts several consumer activation programmes

around the Iodine sahi to dimag tez (roughly translated it

means adequate quantity of iodine results in an intelligent

mind) campaign to spread awareness about the goodness of

iodine and its health benefits. I-Shakti has helped in spreading

iodisation from 50 per cent of the population to 65 per cent.

evaporated — a technology never used before for making salt in India. Plus, because of the technology used, it

was white, pure and consistent, and free from any extraneous matter unlike the solar salts in general use then.

As awareness of health issues has grown and consumers have become more discerning, the Tata Salt brand

has also grown from strength to strength.

In the food business, where companies spend a fortune on brand building, this is no mean feat. So what’s the

secret? Ashvini Hiran, head, consumer products business, explains: “The word Tata lends the value of trust and

quality to Tata Salt. The functional benefits and unmatched quality, coupled with the emotional connect the

brand has with the people of India, has positioned it as the most trusted food brand of India.”

Tata Salt clicked with the consumers from the beginning. The purity positioning, supported by the government

campaign to promote iodised salt, established it as a favourite with housewives in no time. It was only in 1990

that other players joined the fray and Tata Salt had competition. Captain Cook, with its promise of a “free

flowing” salt that doesn’t become soggy, swamped the market. In 1996, Hindustan Unilever (then Hindustan

Lever) launched Annapurna salt, positioning it on the health and iodine platform. Other brands such as Nirma

and Dandi followed.

This competition was something new for Tata Salt, so used to being the sole brand in the market. To combat

this sudden onslaught on its supremacy in the market, a revolutionary new strategy was needed. So, in 2001,

moving beyond the ‘health’ and ‘purity’ platform, Tata Salt launched the highly emotional Desh ka namak

campaign, which reinforced its leadership position in the marketplace and the consumer’s mind and elevated the

brand forever from the mundane to the sublime. This strong connect with the national good remains, to date, the

key differentiator between Tata Salt and other brands.

The latest ad campaign Ghul mil ke, carries the ‘salt of the nation’ positioning forward by establishing a connect

between salt and the way Indians celebrate festivals, putting aside religious and cultural differences.

Quality matters

Desh ka namak was a masterstroke. But this campaign could not have worked and that too in such a sustained

manner, if the quality of the product had not been so unimpeachable. At Tata Salt’s Mithapur plant, the stringent

quality checks at every stage of the production process ensure that Tata Salt keeps to its promise of purity,

whiteness, consistency, adequate iodisation and consistent saltiness. The 27 centres spread all over India that

package the salt for distribution maintain the strictest hygiene, even though they are not owned by Tata

Chemicals. “Ensuring quality right through the supply chain is extremely important for us,” explains Mr Hiran,

“that is why we have deputed senior managers to supervise the process.”

Each pack of Tata Salt is Hazard Analysis and Critical Control Points (HACCP) certified, which is the most

respected food grade certification globally. To consumers it means that they get safe,

pure and hygienic salt in every pack of Tata Salt. Interestingly, the HACCP certification

for food safety is not a requirement for salt, and probably nowhere in the world do

companies HACCP-certify their salt. Then why does Tata Chemicals do it? “Because,”

says Mr Hiran, “we go the extra mile to ensure quality. And because we want to be

future ready.”

On the ‘lite’er side

That the company is forward looking, modern and innovative is evident in other areas

too. It conducts regular research to identify new segments, new products and new markets. Take for instance,

Tata Salt Lite, launched in October 2007. Lite was the result of research studies which indicated that 40 per cent

of the urban adult population suffers from hypertension and that salt could play an important role in its

management. After extensive research, Tata Salt Lite was launched as a healthier option for consumers wanting

to manage their weight and blood pressure.

Lite aims at wellness and is packed with the triple goodness of 15 per cent less sodium (good for management

of hypertension and heart-related diseases), potassium enrichment (good for maintaining the potassium-sodium

balance in the body) and iodisation (to counter iodine deficiency and related problems). Since its launch, Lite

has grown to four times that of its nearest competitor. The challenge for the marketing team now, according to

Mr Hiran, is to “make Tata Salt Lite as big as Tata Salt”. Wellness is the new focus for Tata Chemicals and its

research efforts are directed towards developing products that have far-reaching health benefits for the masses.

Salt of the earth

In keeping with the Tata tradition of giving back to society and in recognition of consumers’ loyalty towards the

brand, Tata Salt introduced the Desh ko arpan (dedicated to the nation) programme in 2002. Every January (to

coincide with India’s Republic Day) and August (to coincide with India’s Independence Day), Tata Chemicals

contributes a part of its sales revenues to the nation through organisations involved in working to improve the

lives of underprivileged children, thereby providing millions of Tata Salt users an opportunity to participate in a

worthy cause.

For the last two years the programme has extended educational support to 1,500 underprivileged girl children

through the Nanhi Kali project. The 2009-10 programme funds and supports four hostels run by the Cohesion

Foundation Trust for the children of salt pan workers in Gandhidham, a major salt hub in Gujarat. The seasonal

hostels ensure the kids stay back and continue with their education, even when their parents migrate in search

of a livelihood.

Looking ahead, Mr Hiran is confident that Tata Salt will continue to innovate and to contribute to the public health of India. In a market flooded with branded salt, innovation does seem to be the best bet to keep ahead. However, the need to innovate for Tata Salt is not driven by competition. Mr Hiran explains: “Most salt brands in the market are solar salts and compete with I-Shakti (Tata Chemicals’ solar refined salt brand for the rural and semi-urban markets). Tata Salt is on a different platform.” The competition or challenge, if any, is to keep the brand modern with new, healthy offerings for the nation. He adds: “Tata Salt will remain the umbrella brand and in the coming years we hope to bring more variants, each with a story of its own.”

How Tata Salt is made

Turning the waters of the Arabian Sea into Tata Salt using vacuum evaporation technology is a fascinating

process. It all begins at Charkala Saltworks, some 45km away from the Tata Salt plant, where sea water is

pumped into solar pans. The location is so environment friendly that scores of migratory birds from Europe and

elsewhere fly in to nest. It is here that the sea water is concentrated by natural evaporation. This concentrated

sea brine is brought to the Mithapur plant by two pipelines where the sand and foreign particles are first

removed and then fed into steam-heated vacuum evaporators.

The heating process creates a solid-liquid mix which is pumped into decanters for the first level of separation.

In the second stage, the settled solids are pumped into a centrifuge to separate the moist salt. Once separated,

it is dried and iodised, making it ready for use. Salt is then packed in 50-kg bags and despatched via rail and

road to 27 HACCP-certified salt-packing centres across India, where it is packed into 1kg retail packs.

Financial Analysis:-

Balance Sheet of Tata Chemicals

------------------- in Rs. Cr. -------------------

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 215.16 215.16 234.00 235.23 243.32

Equity Share Capital 215.16 215.16 234.00 235.23 243.32

Share Application Money 0.00 0.00 0.06 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 1,952.54 2,177.68 3,337.62 3,386.68 4,031.75

Revaluation Reserves 0.00 0.00 0.00 0.00 0.00

Networth 2,167.70 2,392.84 3,571.68 3,621.91 4,275.07

Secured Loans 160.43 60.63 47.97 249.48 249.24

Unsecured Loans 1,294.06 981.14 2,297.31 3,426.62 2,697.27

Total Debt 1,454.49 1,041.77 2,345.28 3,676.10 2,946.51

Total Liabilities 3,622.19 3,434.61 5,916.96 7,298.01 7,221.58

Mar '06 Mar '07 Mar '08 Mar '09 Mar '10

12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds

Gross Block 3,142.22 3,219.35 3,291.44 3,602.99 3,803.50

Less: Accum. Depreciation 1,678.02 1,811.83 1,948.24 2,058.01 2,211.06

Net Block 1,464.20 1,407.52 1,343.20 1,544.98 1,592.44

Capital Work in Progress 86.77 107.22 169.38 298.77 237.65

Investments 713.74 1,350.28 3,741.40 4,473.73 4,905.59

Inventories 560.82 506.48 657.64 969.80 611.19

Sundry Debtors 601.35 668.55 639.50 1,001.73 581.60

Cash and Bank Balance 46.06 72.48 175.90 510.52 624.96

Total Current Assets 1,208.23 1,247.51 1,473.04 2,482.05 1,817.75

Loans and Advances 1,276.08 647.08 713.45 863.35 391.39

Fixed Deposits 0.00 22.00 101.73 128.23 87.69

Total CA, Loans & Advances 2,484.31 1,916.59 2,288.22 3,473.63 2,296.83

Deffered Credit 0.00 0.00 0.00 0.00 0.00

Current Liabilities 806.49 970.89 1,273.98 2,120.39 1,457.74

Provisions 327.36 379.81 351.79 372.71 353.19

Total CL & Provisions 1,133.85 1,350.70 1,625.77 2,493.10 1,810.93

Net Current Assets 1,350.46 565.89 662.45 980.53 485.90

Miscellaneous Expenses 7.02 3.70 0.53 0.00 0.00

Total Assets 3,622.19 3,434.61 5,916.96 7,298.01 7,221.58

Contingent Liabilities 965.34 287.64 530.80 394.96 560.26

Book Value (Rs) 100.78 111.24 152.64 154.01 175.74

Source : Religare Technova

Explore Tata Chemicals connections

Tata Chemicals announces Q4 FY09 resultsMumbai, May 28, 2009

Business Highlights

Soda ash business environment worldwide continues to be fluid; domestic demand stable on back of growing detergents and chemicals market

Debottlenecked capacity at Babrala clocks highest ever urea sales

Consumer products business continues to grow. I-Shakti sales almost double YOY

Focused efficiency ADAPT programme delivering results

The Board of Directors recommended a final dividend of 90% translating in a total outflow of Rs247.62 crore including dividend distribution tax.

FY09 Financial Highlights

Revenues at Rs12,258 crore up 103 per cent YOY

Profit from operations increases 80 per cent to Rs1,436 crore

PAT at Rs648 crore

Q2FY09 Financial Highlights

Revenues at Rs4,661 crore up 169 per cent YOY

Profit from operations increases 169 per cent to Rs670 crore

Profit before exceptional items and tax at Rs587 crore, up 120 per cent

Tata Chemicals Limited, a leading manufacturer of chemicals, fertilisers and food additives today announced it’s consolidated & standalone financial results for the quarter ended March 31, 2009. The Company is the second largest manufacturer of soda ash and the third largest producer of sodium bicarbonate in the world, apart from being the leader in the Indian market. Tata Chemicals also enjoys leadership in the Indian edible salt market and is the most efficient manufacturer of urea fertiliser in the country.

Commenting on the Company’s performance for FY 2009, Mr. R Mukundan, Managing Director said: “This has been a challenging year for businesses all over and our case is not different. In some international markets for soda ash we are seeing some pressure on volumes and prices. I am happy to say that due to a portfolio of businesses which serve a diverse range of customer base spread across agri, household and industrial sectors, we are well placed. Tata Salt delivered record breaking market share in FY09 and our newly launched salt products are already market leaders. Urea sales have been at its highest ever. It has truly been a year of value management. We have in place a focused efficiency program that we believe would enable us respond to challenges in the environment. Going forward Tata Chemicals will continue to create value for shareholders and customers alike.”

Note:Consolidated financials indicated in this communication are reviewed and primarily include those of Tata Chemicals standalone entity, the Brunner Mond Group acquired in December 2005, the one third stake acquisition in Indo Maroc Phosphore S.A. (IMACID) and the acquisition of General Chemicals and Industrial Products acquired in March 2008.

http://connect.in.com/profile/

YEAR – ON – YEAR CONSOLIDATED PERFORMANCE COMPARISION

FY2009 (April 2008 – March 2009) v/s FY2008 (April 2007 – March 2008)

Income from operations (net of excise) at Rs12,257.66 crore compared to Rs6023.15 crore in FY 2008, an increase of 103 per cent

Profit from operations at Rs1,436.48 crore higher by 80 per cent compared with Rs796.19 crore in corresponding period last year

Profit before exceptional items and tax down by 9.5 per cent at Rs1,124.6 crore; as against Rs1,243.51 crore (including Rs487.47 crores on account of profit on sale of long-term investments) in the previous year

Profit after Tax (PAT) (after Minority Interest) at Rs648.1 crore compared with Rs964.4crore in FY 2008, down by 33 per cent

Basic EPS : Rs27.59

Diluted EPS : Rs26.19

DividendThe Board of Directors recommended a final dividend of 90 per cent translating in a total outflow of Rs247.62 Crore including dividend distribution tax.

Details of extraordinary items

Foreign exchange - AS-11 amendmentThe Company has exercised the option of AS-11 as per the notification issued by the Ministry of Corporate Affairs on March 31, 2009. Amount amortised for FY 09: Rs125 Cr and amount transferred to the balance sheet Rs360 Cr. To be amortised till March 31st 2011.

Reversal of impairment of cement plantIntroduction of Masonry cement which utilises fly ash increases opportunity. As a result profits are expected to improve and the company has as a result reversed the impairment of the cement plant.

Balance sheet perspectiveTotal cash on the balance sheet as on March 31, 2009 amounted to Rs1,452 crore (inclusive of value of fertiliser bonds of Rs446 crore as on March 31, 2009). Operating cash flows have been and are expected to continue to be healthy lending strength to Tata Chemicals’ balance sheet and enabling it to support the Company’s objective of strengthening its competitive position through a mix of and organic and viable inorganic initiatives as well as efficiency enhancement.

The Company’s consolidated gross debt as on March 31, 2009 stood at 6,283 crore. This comprises borrowings of USD 475 million taken on the Tata Chemicals balance sheet and a loan of USD 300 million taken on the GCIP balance sheet, both of which have been taken at extremely fine rates. Payment towards the former will commence in June 2012 while towards the latter has begun in February 2009.

After deducting cash, value of investments and fertilizer bonds as on March 31, 2009, debt stands at Rs4,831crore.

SEGMENTAL PERFORMANCE

Soda ash

Global and Domestic Industry perspective and outlook

The global soda ash industry is presently operating at approximately 75 per cent capacity utilisation in line with demand. Prices are currently in the range of USD 160-175 FOB China

The Government of India has imposed a 20 per cent safeguard duty for a six month period to protect the soda

ash industry from Chinese dumping

The Chinese government has also reintroduced a 9 per cent export incentive for producers leading to increased production in China

While demand in the UK continues to be encouraging, the rest of Europe is witnessing a decline

US demand looks to be stabilising; however there are some challenges being witnessed in Latin America which accounts for a considerable portion of GCIP exports

Domestic soda ash demand continues to be healthy mainly on the back of traction of the detergents and chemicals segments

Consolidated sales amounted to Rs5,415 crore for the quarter ended March 31, 2009; PBIT margins for the chemicals business stood at 18.6 per cent for the quarter

Mithapur, India

Tata Chemicals maintained its leadership position in the domestic soda ash market

Sales volumes (including exports) for soda ash at Mithapur for the quarter ended 31March 2009 stood at 695 thousand tonnes.

Brunner Mond Group Limited

Higher volumes, price increases that effective during three quarters of the year and lower overheads enabled improved performance of BMGL

However there is some volume shrinkage now being witnessed and capacity utilisations are being seen to normalise at approximately 70 per cent. Rapid increase in production seems unlikely in the near future

Prices in Europe are presently in the region of USD 240 pmt.

Increased imports from China into South East Asia has considerably impacted Magadi's performance

GCIP

While US domestic demand appears to have stabilised, increased Chinese imports into Latin America combined with weaker demand in the region is impacting exports of the Company

GCIP has begun a focused cost reduction and cash generation programme to help keep costs under control

Consumer Products

Tata Chemicals remains market leader with 58.4% market share in the national branded segment ¡V its highest ever.

Tata Salt's continues at number one position with market share of about 44 per cent

I-shakti sales double YOY

Tata Salt Lite has become the market leader in the low sodium salt category within the first year of its launch

CROP NUTRITION BUSINESS (formerly Fertilisers Business)

Sales for Q4FY09 from the crop nutrition business were Rs6,912 crore

PBIT margins stood at 7.3 per cent

Urea production at the Babrala plant has stabilized at over 3,500 tpd levels

The quarter under review saw the highest ever urea sales on the back of improved availability after debottlenecking the plant

While DAP consumption in India saw its highest levels ever, prices have corrected over this quarter impacting margins

Continuing high phosphoric acid prices may render manufacture of DAP unviable

Details of subsidy received & outstanding

Total subsidy received in FY 2009 – Rs4,264 crore

Cash subsidy received in FY 2009 – Rs3,245 crore

Bonds subsidy received in FY 2009 – Rs1,019 crore

Total subsidy outstanding as on 31 March 2009 – Rs874 crore

Details of fertiliser bonds received during the year under review

Coupon, yearof maturity

Date of allotment Amt ofBondsRs Crore)

Sold till 28thMay 09(Rs Crore)

Balance(Rs Crore)

7%, 2022 10th Dec 611.93 516.27 95.66

6.2%, 2022 24th Dec 123.47 NIL 123.47

6.65%, 2023 29th Jan 283.66 NIL 123.47

Total 1019.06 502.79

IMACID

IMACID resumed operations in the quarter under review

Inventory writedowns to current realizable values impacted EBITDA

D. NEW BUSINESSES

Fresh Produce

Operations in Ludhiana stabilising

During the quarter the business focussed on cutting costs and improving margins by reaching higher volumes

Bio-fuels

Feedstock for the 30 KL/day Ethanol plant is being sourced and production is expected to begin soon

Trial cultivations of Jatropha for the Biodiesel operations continue smoothly

ADAPT

The Company has adopted this programme to combat the extremely challenging prevalent macroeconomic environment. Under the three heads below, ADAPT is carrying out the following actions –Capex Postponement

Focus on Critical, Safety and maintenance Capex; All non critical and non routine capex being deferred

Cash Conservation

Working Capital management; Cash conversion efficiency; Locking in energy costs, royalty

payments; Taking price increases wherever possible; Stringent monitoring of ARs and APs

Cost Reduction

Reducing wastage; Focus on supply chain efficiencies; Leveraging Scale; Deleveraging, Selling

Non Core Assets; Review of raw material contracts; Paring overheads

tata chemicals ltd

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green river

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