TATA CORUS DEAL

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Contents

Tata Steel
Tata Steel, formerly named The Tata Iron and Steel Company, was established by
Sir Jamsetji Tata in 1907. The century that followed commenced with modest
investments in India to expand and modernize their main facility, located in the
town of Jamshedpur. Over the years, their production capacity grew steadily from
1 million tonnes per annum (MTPA), allowing Tata Steel to become Indias largest
private-sector steel company by 2006. In the global market, however, the
company only ranked fifty-sixth in terms of its production capacity. (Exhibit 1
and 2 details the Balance sheet and P&L statements for Tata Steel)
The Indian Steel industry is regarded as the most important component for
the development of nation, because steel industry (heavy industry) is considered
2

as a very important and influential parameter for the development of any

modern economy. The finished steel production in India has grown from 1.1
million tonnes in 1951 to 31.63 million tonnes in 2001-02, which can be regarded
as a remarkable example of Indias development in economic activities. Tata
played a vital role in the improvement of steel production also. For that reason in
the development of Indias economy, Tata played a significant role. As a result
the consumption level of steel from 1990 to 2002 was continuously in an
increasing order, but in 2003 it was not like earlier. In respect to the per capita
income and consumption of steel it is very less in India with compare other
countries. (Refer Exhibit 3 for the details about steel consumption level).
Indias major market for steel and steel items include USA, Canada,
Indonesia, Italy, West Asia, Nepal, Taiwan, Thailand, Japan, Sri Lanka and
Belgium. The major steel items of export include HR coils, plates, CR and
galvanized products, pipes, stainless steel, wire rods and wires. With the fall in
prices along with depressed domestic demand, India has been increasing exports
to overcome the excess supply situation. This has resulted in antidumping
actions being taken by developed countries like USA, EU and Canada. The trade
action by some countries against Indian steel industry has, to some extent,
affected Indias exports to these countries. The Government of India and the
Indian steel producers are trying to combat such actions despite such efforts
being very expensive and involving time-consuming procedures. (Refer Exhibit
4 for the detailed about steel production by Tata in India).

Corus and Steel Production in the U.K

Corus Group plc was formed on 6th October 1999, through the merger of two
companies, British Steel and Koninklijke Hoogovens, following the privatization of
many steelworks companies by the U.K. government. The company consists of
four divisions which include: Strip Products, Long Products, Aluminium and
Distribution and Building Systems. With headquarters in London, Corus operates
as an international company, satisfying the demand of many steel customers
worldwide. Its core business comprises of manufacturing, development and
allocation of steel and aluminium products and services. The company has a
wide variety of products and services which comprise of the manufacturing of
electrical steel, narrow strip, plates, packaging steel, plated steel strip, semifinished steel, tube products, wire rod and rail products and services. However,
the company is also engaged in providing a variety of services including design,
technology and consultancy services.
Corus products and services are acquired by customers from diverse
fields such as commercial and military aerospace ventures, the automotive,
construction, engineering, defence and security, as well as the rail and
shipbuilding industry. In terms of performance, the company is regarded as the
largest steel producer in the UK with 10,142 million of annual revenue (for
2005) and a work force of 50 000 employees. In order to sustain and run its
global steelmaking, processing and distribution operations the company makes
annual investments of over 6 million for the purchase of various goods and
3

services, such as iron ore and coal, alloys, refractory, rolls and paint. Looking at
the financial status of the company from 1996-2005, a degree of fluctuation
between the years can be seen. But irrespective of all these factors Corus
continued the business as it was continuing. (Refer Exhibit 5 & 6for the
details of financial performance of the company across the years)

Rationale
Following few factors were key in Tatas decision to acquire Corus:
Quick improvement and gains to the scale and scope of production. The
acquisition would help Tata Steels leapfrog its ranking from fifty-sixth to
fifth position.
Corus had existing plants established in Britain, Germany, France, the
Netherlands and Belgium, which would provide them with quick access to
an annual capacity of 19 million tonnes of steel in European markets.
The Corus group enhanced its reputation as an established supplier for the
aviation and automotive industries, which would ultimately broaden Tatas
product range. These very reasons which made Corus appealing to Tata,
also captured the interest of CSN and other companies.

The Deal
On 17 October 2006, Tata Steel made a non-binding offer to acquire 100 per cent
stake in the Corus Group with a bid of 455 pence per share, valuing Corus equity
at US $8 billion. The initial bid was well received by Corus board of directors,
who accepted the proposal and recommended it to the shareholders for their
approval. This process was disrupted shortly after, when CSN put forth a bid that
surpassed Tatas.
The following timeline depicts the deal as it took place:
September 20,
2006

Corus Steel has decided to acquire a strategic partnership with a

company that is a low cost producer

October 5, 2006

The Indian steel giant, Tata Steel wants to fulfil its ambition to
expand its business further.

October 6, 2006

The initial offer from Tata Steel is considered to be too low both by
Corus and analysts.

October 17, 2006

Tata Steel has kept its offer to 455p per share.

October 18, 2006

Tata still doesnt react to Corus and its bid price remains the same.

October 20, 2006

Corus accepts terms of 4.3 billion takeover bid from Tata Steel

October 23, 2006

The Brazilian Steel Group CSN recruits a leading investment bank

to offer advice on possible counter-offer to Tata Steels bid.

October 27, 2006

Corus is criticized by the chairman of JCB, Sir Anthony Bamford, for

its decision to accept an offer from Tata.

November 3, 2006

The Russian steel giant Severstal announces officially that it will

not make a bid for Corus

November 18, 2006

The battle over Corus intensifies when Brazilian group CSN

approached the board of the company with a bid of 475p per share

November 27, 2006

The board of Corus decides that it is in the best interest of its will
shareholders to give more time to CSN to satisfy the pre-conditions
and decide whether it issue forward a formal offer

December 18, 2006

Within hours of Tata Steel increasing its original bid for Corus to
500 pence per share, Brazil's CSN made its formal counter bid for
Corus at 515 pence per share in cash, 3% more than Tata Steel's
Offer.

January 31, 2007

April 2, 2007

Britain's Takeover Panel announces in an e-mailed statement that

after an auction Tata Steel had agreed to offer Corus investors 608
pence per share in cash
Tata Steel manages to win the acquisition to CSN and has the full
voting support from Corus shareholders

Financing
Funding comprised of Tata Steel's investment of $4.1 billion in its wholly owned
subsidiary Tata Steel Asia Holdings (Singapore), which would in turn invest the
same in Tata Steel UK which has acquired Corus plc UK.

As part of Tata Steel's contribution, the company invested the following as part of
its equity commitment:
5

a) Internal generation $600 million.

b) External commercial borrowings $500 million.
c) Funds from the preferential issues of equity shares to Tata Sons (which
were approved earlier and have since been allotted) comprising equity
shares of the face value of Rs56 crore at an average price of Rs499.7 per
share, which has provided a total amount of $640 million.
A rights issue of equity shares to the shareholders in the ratio 1:5 at a

price of Rs300 per share (of Rs10 each), which would involve issue of equity
shares of the face value of Rs122 crore and would provide an amount of $862
million.
A simultaneous but un-linked rights issue of convertible preference
shares in the ratio of 1:7 having a coupon rate of 2 per cent with conversion
into equity shares after two .This issue would provide a total amount of about
$1000 million.
A foreign issue of an equity-related instrument up to an amount of $500
million.
The following important points of this total financing scheme of $4.1 billion
(about Rs 17,750 crore) may be noted:
a) For the acquisition, Tata Steel utilised additional debt of only $500 million
(about Rs 2,170 crore) which represents only 12 per cent of the total amount
required.
b) Apart from the preferential issues of equity shares of Rs56 crore allotted to
Tata Sons (at prices which were higher than the then prevailing market prices),
Tata Steel would be raising additional equity share capital of the face value in the
range of about Rs250-280 crore depending on the final pricing of the various
issues. This increase in the equity capital will come into effect only in stages
during the three financial years 2007-08 to 2009-10 which will therefore ease the
burden of servicing.
c) The post-tax cost of this total financing package on completion is expected to
be around 4.3 per cent per annum.
The long term financing pattern for the net acquisition consideration of Corus
would be $12.9 billion and Tata Steel UK would be funded in the long term from
the following sources:
Equity capital from Tata Steel
Long-term debt from consortium of banks
Quasi-equity funding at Tata Steel Asia
Singapore
Long-term capital funding at Tata Steel Asia
Singapore
Total

$4.10 billion
$6.14 billion
$1.25 billion
$1.41 billion
$12.90 billion

a) Tata Steel will provide $4.1 billion from the various sources indicated above
and will invest the above quantum through its wholly owned indirect subsidiary
Tata Steel UK.
b) Non-recourse debt financing arranged by a consortium of banks of $6.14
billion directly at Tata Steel UK.

Synergy (Strategic Fit)

Today marks the end of a journey that commenced quite some time ago and I
think when it started Tata Steel saw a strategic fit with Corus in the UK and
Netherlands, which would give it a global reach in Europe; synergies with low
cost intermediates in India and when we made our first bid to acquire the
company, many thought it was an audacious move because an Indian company
making a bid for a European steel company much larger in tonnage size which is
something that had not happened before.
- Ratan Tata
Tata was one of the lowest cost steel producers in the world and had selfsufficiency in raw material. Corus was fighting to keep its productions costs
under control and was on the lookout for sources of iron ore.
Tata had a strong retail and distribution network in India and SE Asia. This
would give the European manufacturer an in-road into the emerging Asian
markets. Tata was a major supplier to the Indian auto industry and the
demand for value added steel products was growing in this market. Hence
there would be a powerful combination of high quality developed and low
cost high growth markets
There was a strong culture fit between the two organizations both of which
highly emphasized on continuous improvement and ethics. Tata steel's
Continuous Improvement Program Aspire with the core values : Trusteeship,
integrity, respect for individual, credibility and excellence. Corus's
Continuous Improvement Program The Corus Way with the core values :
code of ethics, integrity, creating value in steel, customer focus, selective
growth and respect for our people.
Enhanced scale will position the combined group as the fifth largest steel
company in the world by production, with a meaningful presence in both
Europe and Asia.
Powerful combination of low cost upstream production in India with the
high-end downstream processing facilities of Corus will improve the
competitiveness of the European operations of Corus significantly.
Facilitates cross-fertilization of research and development capabilities in
the automotive, packaging and construction sectors and there will be a

transfer, from Europe to India, of technology, best practices and expertise of

senior Corus management.
Leading the enlarged group with a combined management team and
Manufacturing will be organized so as to produce slabs / primary steel in lowcost facilities and produce high-end products in proximity to client base - in
both Europe and India.
Strong market position by acquisition of Corus and vertical integration.
With 84,000 employees across four continents and a joint presence in 45
countries, would make the combined entity a serious rival to other steel
giants.

Post-merger Integration:
Our intention is that Corus will retain its identity for the foreseeable future and
will remain an Anglo-Dutch company. The management will be substantially the
same
-Ratan
Tata,
Forbes,
2006,
December 12.
As is the case with any acquisition, post-merger integration issues include
cultural undertones and ego clashes. Statistics show that nearly 70 percent of
mergers and acquisitions fail because of cultural issues, and Tata Steels
acquisition of Corus tends to be even more vulnerable because of potential
cultural difficulties that could emerge from a cross-border integration.
One major concern for Tata in its post-merger integration efforts was form the UK
trade unionists warned there would be trouble for Corus employees if Tata were
to move production away from the UK to lower-cost India markets. Union leaders
emphasized they were not going to accept the downfall of the UK steel industry
and could use any resources to resist its accelerated or slow demise. Philippe
Varin, the French CEO for Corus, didnt make any pledges or commitments, but
said that the deal wasnt predicated on closures, but instead, upon global
opportunities and that it was in the best interests of Corus employees to be
globally competitive.
A light-handed integration between Tata Steel and Corus was looked at instead
of engaging in a comprehensive organizational overhaul as Ratan Tata believed
that the tow companies had many shared values and similar work practices. Tata
Steel decided to allow existing management to continue, with a more
comprehensive restructuring set aside for a later date. Taking these
recommendations to heart, Tata Steel retained the following top management of
Corus to work with integration issues.
In April 2007, Tata Steel formed a seven-member strategy and integration
committee, headed by Tatas chairman, Ratan Tata. The remaining six seats were
8

shared equally by three senior members from Tata Steel and three from the
Corus Group.
Following the acquisition, Coruss head Philippe Varin was retained as chief
executive with Jim Leng assuming the deputy chairmans position. Ratan
Tata became the Chairman.
Corus announced that Malcolm McOmish, Managing Director Corus
Packaging Plus, was moved from his current position based at Ijmuiden in
the Netherlands to become Managing Director of Cogent Power Ltd within
Corus based at Orb in South Wales in the UK. Cogent Power Ltd
manufactures and sells steels, which are used in the electrical motor and
power generation industry.
McOmish was succeeded by Theo Henrar, who was Managing Director,
Corus Distribution and Building Systems based in the UK. In his new role,
Mr. McOmish will continue to remain available to provide strategic support
to the tinplate portfolio within Corus Strip Products Division.
Alastair Aitken was appointed Managing Director, Corus Distribution and
Building Systems UK and Ireland.
In its July 18, 2007 annual general meeting, Tata Steel sought approval
from shareholders to appoint four directors of Corus to its board. They
were Jim Leng, Philippe Varin, Jacobus Schraven, and Anthony Hayward.
In January 2009, Philippe Varins replacement as CEO was announced.
Kirby Adams was named the new Corus and Tata Steel Europe CEO
Jim Leng, another Corus executive, left the firm to become Chairman of Rio
Tinto, the worlds 3rd largest mining firm and a Tata rival.

Exhibits:
Exhibit 1: Tata Steel 10 year Balance Sheet
Tata
Steel
Limit
ed
http://ww
w.tataste
el.com
Exchang
e:
Country:
DJ
Sector:

DJ
Industry:

CUSIP:
BOM
IND

T08039
DCN:
9284
INE081A0
ISIN:
1012

Price
3/22/2007
442.0
0

Shrs Out
(th)
580,00
0

PE
Ratio
IRON
AND
STEEL
FORGIN
GS

6.54

Tot Ret
1Yr

6.01

Mkt Cap (th)

249,690

Beta

#N/A

Compan
y Status:

Active
Source: Thomson Financial

Scaling
Factor :
1000000
INR

Currency: INR

BALAN
CE
SHEET
3/31/20
06 3/31/20
02
ASSETS
Cash And
ST
Investme
nts
Receivab
les (Net)
Total
Inventori
es
Other
Current
Assets
Current
Assets Total
Property
Plant &
Equipme
nt - Net
Total
Investme
nts
Other
Assets
Total
Assets
LIABILIT
IES &
SHAREH
OLDERS
' EQUITY
Accounts
Payable
ST Debt
& Current
Portion of
LT Debt
Income
Taxes
Payable
Other
Current
Liabilities
Current

03/31/06

03/31/05

03/31/04

03/31/03

03/31/02

7,767.50

4,657.30

2,778.70

4,103.00

2,473.10

21,983.80

20,209.30

13,873.80

16,510.10

17,538.20

27,733.10

24,899.00

13,740.40

12,134.70

11,809.80

11

6.6

2.9

59,080.60

50,719.70

43,701.60

38,781.50

35,623.30

107340.8

96807.1

80172.3

76600.8

77722.6

#N/A

#N/A

#N/A

4,240.30
205,450.7
0

3,564.50
177,033.1
0

1,565.10
147,988.7
0

106.60
127,600.8
0

131,372.60

03/31/06

03/31/05

03/31/04

03/31/03

03/31/02

30,278.20

32,051.30

21,513.50

18,364.20

4,917.40

3,752.60

3,362.90

2,433.30

4,325.30

5,617.60

3369.3

3434.9

14252.3

4855.6

1803.6

1698

1801.9

#N/A

#N/A
10,134.40

4,771.00

4,824.80

3,976.10

1,531.40

8,848.20

49,573.00

51,006.00

45,998.80

32,147.60

27,254.90

10

Liabilities
- Total
Long
Term
Debt

27,876.20

27,902.60

30,598.80

0.00

0.00

0.00

101,396.6
0

102,726.3
0

100,935.3
0

94,347.10

95,950.80

1,235.70

935.20

486.60

309.70

236.30

Other
Liabilities
Total
Liabilitie
s
Sharehol
ders'
Equity
Minority
Interest
Preferred
Stock
Common
Equity
Retained
Earnings
Total
Liabilitie
s&
Sharehol
ders'
Equity
BALAN
CE
SHEET
3/31/20
01 3/31/19
97

0.00

0.00

0.00

102,818.4
0

73,371.60

46,566.80

11.20

11.20

#N/A

205,450.7
0

177,033.1
0

147,988.7
0

38,953.20

44,338.10
0.00

0.00

0.00
32,944.00

0.00
35,185.50

#N/A

127,600.8
0

#N/A

131,372.60

ASSETS

03/31/01

03/31/00

03/31/99

03/31/98

03/31/97

Cash And ST Investments

2,392.30

4,089.00

3,361.90

4,294.10

2,513.80

19,186.50

12,727.13

13,449.78

14,244.30

17,566.42

8,955.70

9,226.60

9,936.50

10,397.00

10,211.10

Receivables (Net)
Total Inventories
Other Current Assets

262.90

4,990.87

3,929.72

3,921.20

3,336.68

32,256.10

32,406.30

32,302.80

34,201.40

34,512.50

75380.9

74240.6

70585.8

63000.4

55264

#N/A

#N/A

#N/A

#N/A

#N/A

Other Assets

9,202.90

8,281.20

5,540.00

2,970.70

2,783.20

Total Assets
LIABILIT
IES &
SHAREH
OLDERS
' EQUITY

125,309.10

120,803.90

114,283.00

106,407.00

99,208.70

Current Assets - Total

Property Plant & Equipment Net
Total Investments

03/31/01

Accounts Payable
ST Debt
& Current
Portion of
LT Debt

03/31/00

3,100.40

787.40

6,997.20

03/31/99

3,155.30

9,404.40

03/31/98

3,874.00

03/31/97

3,405.40

6,120.10

3,529.00

782.80

Income Taxes Payable

1,802.00

1,670.40

1,855.30

1,505.80

1,114.00

Other Current Liabilities

9,803.00

7,843.40

6,827.60

7,084.30

7,414.30

11

Current Liabilities - Total

49,573.00

25,195.20

27,364.30

23,245.00

17,407.10

Long Term Debt

45,932.70

42,073.10

39,982.90

39,669.70

40,043.10

Other Liabilities
Total Liabilities

0.00

0.00

0.00

0.00

0.00

76,424.80

75,219.90

72,638.80

65,758.20

59,468.50

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Shareholders' Equity
Minority Interest

Preferred Stock
1,400.00
1,500.00
0.00
Common
Equity
47,484.30
44,084.00
41,644.20
40,648.80
Retained
Earnings
#N/A
#N/A
#N/A
#N/A
Total
Liabilitie
s&
Sharehol
ders'
125,309.1
120,803.9
114,283.0
106,407.0
Equity
0
0
0
0
Rate Used to Translate From
INR
to INR

1.00

1.00

1.00

39,740.20
#N/A

99,208.70
1.00

1.00

Exhibit 2: Tata Steel 10 Year Income Statement

Tata Steel
Source: Thomson Financial
Scaling
Factor :
100000
0 INR
10 YR
INCOM
E
STATE
MENT

03/31/0
6

03/31/0
5

03/31/0
4

03/31/0
3

03/31/02

Net
Sales
or
Reven
ues

202,444
.30

159,986
.10

111,294.
40

91,368.
20

74,279.10

Cost of
Goods
Sold

128,736
.00

90,227.
60

70,419.
40

63,572.
20

56,950.00

Deprec
iation,
Depleti
on &
Amortiz 8,603.7
ation
0

6,454.6
0

6,405.5
0

5,696.9
0

Gross
Income

65,104.
60

63,303.
90

34,469.
50

Selling,
Genera
l&
Admin

Currency: INR

#N/A

#N/A

#N/A

5,473.20
22,099.
10
#N/A

11,855.90
#N/A

12

Expens
es
Operati
ng
Expens
es Total

147,701
.00

104,427
.80

82,010.
60

74,016.
30

66,473.10

Operati
ng
Income

54,743.
30

55,558.
30

29,283.
80

17,351.
90

7,806.00

NonOperati
ng
Interest
Income

459.60

404.70

191.30

381.80

307.50

Earnin
gs
Before
Interest
And
Taxes 56,874.
(EBIT)
80

56,810.
40

28,633.
00

16,325.
30

Interest
Expens
e On
Debt

2,064.1
0

2,386.0
0

1,519.2
0

3,633.3
0

4,499.10

Pretax
Income

54,859.
90

54,424.
40

27,148.
70

12,789.
60

2,422.70

Income
Taxes

17,649.
20

18,712.
40

9,362.5
0

2,566.8
0

487.00

Minorit
y
Interest

186.40

259.60

192.80

67.60

11.50

Equity
In
Earnin
gs

321.90

580.20

294.40

151.30

0.00

Net
Income
Before
Extra
Items/P
referre 37,346.
d Div
20

36,032.
60

17,887.
80

10,306.
50

0.00

0.00

0.00

0.00

0.00

37,346.
20

36,032.
60

17,887.
80

10,306.
50

1,924.20

0.00

0.00

0.00

0.00

22.80

Extr
Items &
Gain(L
oss)
Sale of
Assets
Net
Income
Before
Preferr
ed
Dividen
ds
Preferr
ed
Dividen
d
Requir
ements

6,761.70

1,924.20

13

Net
Incom
e
Availa
ble to
Comm
on
Rate
Used
to
Transla
te
From
INR
to INR
10 YR
INCOM
E
STATE
MENT

37,346.
20

1.00

1.00

36,032.
60

1.00

17,887.
80

10,306.
50

1,901.40

1.00

1.00

03/31/0
1

03/31/0
0

03/31/9
9

03/31/9
8

03/31/9
7

Net
Sales
or
Reven
ues

61,019.
60

55,737.
60

51,067.
60

51,992.
30

51,206.
20

Cost of
Goods
Sold

38,372.
70

38,584.
68

37,517.
45

38,090.
89

35,994.
73

6,937.7
0

5,840.4
0

4,971.5
0

4,551.0
0

4,108.2
0

Deprec
iation,
Depleti
on &
Amortization
Gross 15,709.
Income
20

11,312.
52

8,578.6
5

9,350.4
1

11,103.27

Selling,
Gener
al &
Admin
Expen
ses

#N/A

#N/A

#N/A

#N/A

#N/A

Operati
ng
Expen
ses Total

48,984.
50

47,694.
20

45,501.
90

45,467.
20

42,747.60

Operati
ng
Income

12,035.
10

8,043.4
0

5,565.7
0

6,525.1
0

8,458.60

NonOperati
ng
Interes
t
Income

357.80

390.10

967.30

1,188.8
0

1,614.90

10,148.
30

8,654.4
0

6,760.8
0

6,871.5
0

9,320.40

Earnin
gs
Before
Interes
t And
Taxes
(EBIT)

14

Interes
t
Expen
se On
Debt

4,819.0
0

5,290.0
0

5,229.4
0

4,651.4
0

4,639.50

Pretax
Income

6,024.4
0

4,770.9
0

3,157.3
0

3,637.3
0

5,429.60

Income
Taxes

490.00

540.00

330.00

412.50

730.00

Minorit
y
Interes
t

0.00

0.00

0.00

0.00

0.00

Equity
In
Earnin
gs

0.00

0.00

0.00

0.00

0.00

5,534.4
0

4,225.9
0

2,822.3
0

3,220.8
0

4,692.10

0.00

0.00

0.00

0.00

0.00

5,534.4
0

4,225.9
0

2,822.3
0

3,220.8
0

4,692.10

Preferr
ed
Divide
nd
Requir
ements

122.00

86.10

0.00

0.00

0.00

Net
Incom
e
Availa
ble to
Comm
on

5,412.4
0

4,139.8
0

2,822.3
0

3,220.8
0

4,692.10

Net
Income
Before
Extra
Items/
Preferr
ed Div
Extr
Items
&
Gain(L
oss)
Sale of
Assets
Net
Income
Before
Preferr
ed
Divide
nds

Rate
Used
to
Transl
ate
From
INR to
INR
1.00

1.00

1.00

1.00

1.00

15

Exhibit 3: Steel consumption level

Year

1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-2000
2000-2001
2001-2002
2002-2003

Consumption
Levels
(In million
tons)
14.37
14.83
0.032
15
0.012
15.32
-0.02
18.66
0.218
21.65
-0.16
22.13
0.022
2.60
22.63
%
4.02
23.54
%
0.062
25.01
4
0.060
26.53
8
0.033
27.44
9
20.65
0.05

Source: The Indian Ministry of Steel (the numbers in brackets indicate the percentage increase
from the previous year).
Note: The consumption of steel is arrived at by subtracting export of steel from the total of
domestic production and adding the import of steel in the country

Exhibit 4: Steel production by Tata in India

Tata Steel - Corus : Projected capacity (in million tons per annum)

Corus Group (in UK and The Netherlands)

19

Tata Steel - Jamshedpur

10

Tata Steel - Jharkhand

12
16

Tata Steel - Orissa

Tata Steel - Chattisgarh

NatSteel Singapore

Millennium Steel Thailand

1.7

Aggregate projected capacity

55.7

Source: International Iron and Steel Institute

Exhibit 5: Corus PLC 10 year Balance Sheet

Balance Sheet (1996- 2005)
ASSETS

12/31/05

12/31/04

12/31/03

12/31/02

12/31/01

956.00

600.00

380.00

270.00

184.00

Receivables (Net)

1,533.00

1,393.00

1,133.00

1,241.00

1,396.00

Total Inventories

1,954.00

1,732.00

1,404.00

1,337.00

1,320.00

4,446.00

3,725.00

2,917.00

2,848.00

2,900.00

2820

2811

2729

2871

3064

#N/A

#N/A

#N/A

#N/A

#N/A

Other Assets

296.00

408.00

432.00

425.00

426.00

Total Assets

7,770.00

7,119.00

6,237.00

6,294.00

6,941.00

LIABILITIES &
SHAREHOLDERS' EQUITY

12/31/05

12/31/04

12/31/03

12/31/02

12/31/01

1,271.00

1,188.00

986.00

1,047.00

1,052.00

384.00

47.00

113.00

78.00

132.00

Cash And ST Investments

Other Current Assets

Current Assets - Total
Property Plant & Equipment Net
Total Investments

Accounts Payable
ST Debt & Current Portion of
LT Debt
Income Taxes Payable

79

117

94

121

108

Other Current Liabilities

733.00

531.00

390.00

390.00

437.00

Current Liabilities - Total

2,467.00

1,883.00

1,583.00

1,636.00

1,729.00

Long Term Debt

1,308.00

1,407.00

1,280.00

1,428.00

1,612.00

Other Liabilities

46.00

26.00

28.00

36.00

34.00

4,392.00

3,786.00

3,353.00

3,485.00

3,774.00

Minority Interest

26.00

42.00

47.00

47.00

60.00

Preferred Stock

0.00

0.00

0.00

0.00

0.00

Common Equity

3,352.00

3,258.00

2,797.00

2,722.00

3,061.00

Retained Earnings

1,199.00

-1,145.00

-1,605.00

-1,389.00

-1,047.00

Total Liabilities &

7,770.00

7,119.00

6,237.00

6,294.00

6,941.00

Total Liabilities
Shareholders' Equity

17

Shareholders' Equity
ASSETS

12/31/00

03/31/99

03/31/98

03/31/97

03/31/96

273.00

1,369.00

1,206.00

1,477.00

1,350.00

Receivables (Net)

1,794.00

1,231.00

1,526.00

1,494.00

1,717.00

Total Inventories

1,719.00

1,007.00

1,222.00

1,224.00

1,391.00

0.00

0.00

0.00

0.00

0.00

3,877.00

3,607.00

3,954.00

4,195.00

4,458.00

3763

3240

3335

3259

3265

#N/A

#N/A

#N/A

#N/A

#N/A

Other Assets

375.00

84.00

117.00

116.00

107.00

Total Assets

8,243.00

7,171.00

7,700.00

7,876.00

8,143.00

LIABILITIES &
SHAREHOLDERS' EQUITY

12/31/00

03/31/99

03/31/98

03/31/97

03/31/96

Cash And ST Investments

Other Current Assets

Current Assets - Total
Property Plant & Equipment Net
Total Investments

Accounts Payable
ST Debt & Current Portion
of LT Debt
Income Taxes Payable

1,086.00

733.00

853.00

836.00

928.00

183.00

81.00

73.00

74.00

126.00

1.00

18.00

83.00

155.00

305.00

Other Current Liabilities

564.00

387.00

526.00

496.00

523.00

Current Liabilities - Total

2,467.00

1,359.00

1,672.00

1,705.00

2,025.00

Long Term Debt

1,766.00

825.00

687.00

618.00

534.00

Other Liabilities

71.00

27.00

36.00

19.00

17.00

4,344.00

2,464.00

2,687.00

2,683.00

2,898.00

Minority Interest

402.00

311.00

351.00

367.00

442.00

Preferred Stock

0.00

0.00

0.00

0.00

0.00

Common Equity

3,440.00

4,346.00

4,604.00

4,757.00

4,723.00

-665.00

919.00

1,195.00

1,383.00

1,350.00

8,243.00

7,171.00

7,700.00

7,876.00

8,143.00

Total Liabilities
Shareh
olders'
Equity

Retained Earnings
Total Liabilities &
Shareholders' Equity

Currency: GBP; Source: Thomson Financial

18

Exhibit 6: Corus PLC 10 year Income Statement

10 YR
INCOM
E
STATE
MENT

12/31/05

Net
Sales
or
Revenu
es
Cost of
Goods
Sold
Depreci
ation,
Depleti
on &
Amortiz
ation

12/31/04

10,140.0
0

12/31/03

12/31/02

12/31/01

9,332.00

7,953.00

7,188.00

7,699.00

7,658.00

7,124.00

6,575.00

6,941.00

8,343.00

312.00

294.00

323.00

350.00
386.00

Gross
Income

1,485.00

1,380.00

506.00

263.00

372.00

Selling,
General
&
Admin
Expens
es

765.00

759.00

565.00

649.00

749.00

Operati
ng
Expens
es Total

9,420.00

8,711.00

8,012.00

7,574.00

8,076.00

Operati
ng
Income

720.00

621.00

-59.00

-386.00

-377.00

NonOperati
ng
Interest
Income

31.00

13.00

13.00

17.00

15.00

Earning
s
Before
Interest
And
Taxes
(EBIT)

707.00

663.00

-150.00

-314.00

-351.00

Interest
Expens
e On
Debt

128.00

131.00

111.00

109.00

118.00

Pretax
Income

579.00

532.00

-261.00

-423.00

-469.00

Income
Taxes

129.00

113.00

52.00

55.00

-48.00

Minority
Interest

-1.00

-6.00

-3.00

-7.00

0.00

1.00

21.00

5.00

13.00

2.00

Equity
In
Earning

19

s
Net
Income
Before
Extra
Items/P
referred
Div
Extr
Items &
Gain(Lo
ss)
Sale of
Assets
Net
Income
Before
Preferr
ed
Dividen
ds
Preferr
ed
Dividen
d
Require
ments

452.00

446.00

-305.00

-458.00

-419.00

0.00

0.00

0.00

0.00

0.00

Net
Income
Availab
le to
Comm
on
10 YR
INCOM
E
STATE
MENT
Net
Sales
or
Revenu
es

452.00

446.00

-305.00

-458.00

-419.00

0.00

0.00

0.00

0.00

0.00

452.00

446.00

-305.00

-458.00

-419.00

12/31/00

Cost of
Goods
Sold

03/31/99

03/31/98

03/31/97

03/31/96

9,358.40

6,259.00

6,947.00

7,224.00

7,048.00

7,711.20

5,280.00

5,443.00

5,606.00

4,999.00

939.20

313.00

306.00

298.00

281.00

Depreci
ation,
Depleti
on &
Amortiz
ation
Gross Income

708.00

666.00

1,198.0
0

1,320.00

1,768.00

Selling, General & Admin Expenses

803.20

408.00

457.00

424.00

508.00

9,453.60

6,377.00

6,640.0
0

6,787.00

6,107.00

-95.20

-118.00

307.00

437.00

941.00

31.20

92.00

91.00

90.00

67.00

-885.60

-70.00

369.00

486.00

1,019.00

Operating Expenses - Total

Operating Income
Non-Operating Interest Income
Earnings Before Interest And Taxes
(EBIT)

20

Interest Expense On Debt

Pretax Income
IncomeTaxes

126.40

66.00

52.00

48.00

45.00

-1,012.00

-136.00

317.00

438.00

974.00

4.80

-23.00

77.00

140.00

243.00

Minorit
y
Interest

56.00

-42.00

7.00

-3.00

49.00

Equity
In
Earning
s

-6.40

-10.00

-7.00

9.00

95.00

1,079.20

-81.00

226.00

310.00

777.00

#N/A

0.00

0.00

0.00

0.00

1,079.20

-81.00

226.00

310.00

777.00

Preferr
ed
Dividen
d
Requir
ements

0.00

0.00

0.00

0.00

0.00

Net
Incom
e
Availa
ble to
Comm
on

1,079.20

-81.00

226.00

310.00

777.00

Net
Income
Before
Extra
Items/P
referre
d Div
Extr
Items &
Gain(L
oss)
Sale of
Assets
Net
Income
Before
Preferr
ed
Dividen
ds

Source: Thomson Financials

21