Supplier Value Creation

Procurement decisions are based on life cycle costing to reduce natural resource demand. Environmental impact of the purchase decision is linked to its CO2 reduction initiative, the extent of the possibility of reusing a material and switching to a recyclable material, recycling and safe disposal of waste.

The Company ensures that the local workforce is a key beneficiary of its processes and practices by making it mandatory for its suppliers to focus on greater workforce diversity through greater inclusion of underprivileged communities, skill upgradation and training of semi-literate workers as well as contract workers to enable them to progressively assume greater responsibilities. Improvement in the availability of employee welfare benefits to tier 2 service providers as well as focusing on the health and safety of their workforce has been achieved through initiatives such as SA8000.

At Tata Steel the community is the purpose of business. Therefore the Company does not seek incentives, grants, subsidies, compensation or financial assistance from the Government, including for investments made through its Community Development initiatives.

Economic value generated and distributed
Particulars	2008-09 (Rs. Crores)	2009-10 (Rs. Crores)	2010-11 (Rs. Crores)
Economic value generated (A)	27,916	28,411	33,695
a) Revenues	27,916	28,411	33,695
Economic value distributed (B)	24,207	24,243	28,142
a) Operating Costs	13,280	14,227	15,446
b) Employee Wages and benefit	2,306	2,361	2,618
c) Payment to providers of Capital	2,431	2,264	2,456
d) Payment to Government	6,073	5,288	7,496
e) Community Investments	116	102	126
Economic value retained (A-B)	3,709	4,168	5,553

Break up of Payment to Government:-
Particulars	2008-09 (Rs. Crores)	2009-10 (Rs. Crores)	2010-11 (Rs. Crores)
Corporate tax	2,403	2,121	3,014
Sales tax	764	799	1,003
Excise duty	2,528	1,817	2,595
Customs Duty	102	88	202
Others	276	463	683
Tax paid to government	6,073	5,288	7,496
*Revenue figure includes sales tax in FY'09 Rs.764 crores, FY'10 Rs. 799 crores, FY'11 Rs. 1003 crores *Corporate tax includes tax on dividend, current tax, fringe benefit tax as per profit and loss account.