Onwards and Upwards, with Con_dence

Dear Shareholders,

I hope this letter _nds you in good health and high spirits. I am delighted to share the signi_cant milestones achieved by Tata Steel Long Products Limited (TSLP) during the _scal year 2023, despite numerous challenges. I am also pleased to introduce the inaugural Business Responsibility and Sustainability Report (BRSR), highlighting our commitment to responsible practices and sustainable growth within your company.

Heightened volatility at the marketplace easing out

The year 2022 brought signi_cant volatility to the global economy, including the steel industry. Several factors such as the Russia-Ukraine con_ict induced global energy crisis, supply chain constraints, in_ationary pressures, semiconductor shortages, interest rate hikes by central banks worldwide, and China's zero-Covid policy, contributed to this volatility. As a result, the demand-supply balance in the steel industry was impacted, leading to a substantial contraction in spreads. Additionally, Indian steel manufacturers faced the challenge of 15% export duty introduced from May to November 2022, which disrupted supply patterns compared to historical trends.

Despite these challenges, steel demand in India grew 10% in _scal year 2023, and is projected to keep pace with the GDP growth. Indian economy has e_ectively managed in_ation and is on a robust growth trajectory, with infrastructure-focused government expenditure. As commodity prices ease and demand improves, we anticipate a reduction in volatility in the steel market in the near term.

Remained resilient despite several headwinds

On the operational front, your company achieved a historic feat by reviving the Neelachal Ispat Nigam Limited (NINL) plant within 100 days of acquisition, leveraging the strength of the Tata Steel ecosystem. This resulted in 33% increase in crude steel production and 26% increase in deliveries in FY23. TSLP Gamharia unit crossed the 0.7 MnT mark for crude steel production on a standalone basis for the _rst time. Specialty steel sales were the highest ever at 0.54 MnT, up from 0.49 MnT in FY22.

The company made a conscious decision to change the business model of its Joda Direct Reduced Iron (DRI) unit from own to conversion route for Tata Steel. This was executed successfully in Q3 FY23. DRI Gamharia plant registered its best annual production of 0.46 MnT, up 18% from the previous year. However, the unprecedented volatility in the market especially in coal coupled with some outages at blast furnaces resulted in higher costs. In TSLP, we responded with agility and sharpened our focus on managing the volatility through recalibrating the operating processes and aligning the supply chain. This was demonstrated in our management of working capital where we ended the _nancial year with a healthy cash balance and averted any fresh borrowing during the year. Our continuous improvement program (Shikhar) focussed on improving operating metrices to mitigate the adverse impact of contraction in spreads. Despite this, there was a negative impact on the company's _nancial performance in H1 FY23. However, the situation normalised in H2 FY23.

This year, Tata Steel Long Products (TSLP) completed its acquisition of the 0.9 MnTPA Neelachal Ispat Nigam Limited (NINL) and production was ramped up to the rated capacity within nine months of the acquisition.

For the year ended March 31, 2023, TSLP's consolidated revenue grew by 32% to _8,992 crore, supported by the NINL acquisition and ramp-up, product mix enrichment, and elevated price levels. Standalone revenue grew by 10% to _7,464 crore. However, both EBITDA and pro_t after tax were substantially lower compared to the previous year.

A year of strategic achievement; successful ramp-up of NINL

During FY23, the company completed the acquisition of NINL under the Government of India divestment program, at an aggregate consideration of approximately _12,100 crore. This acquisition has resulted in doubling the crude steel capacity to ~1.9 MTPA and is well positioned to grow synergistically in the future being part of the Kalinganagar eco-system. Despite the fact that the plant was mothballed for almost three years, it was revived within 100 days and the production was ramped up to the rated capacity within nine months of the acquisition. This has enabled the company to enhance its product portfolio by leveraging "Tata Tiscon", the retail brand of Tata Steel.

Swift progress towards growth in specialty steel

Another signi_cant milestone in our growth journey is our state-of-the-art facility, the 0.5 MTPA "Combi mill" for specialty steel in Jamshedpur. This upcoming mill will enhance our presence and drive growth in the chosen segments of passenger vehicles and 2-wheelers. We are proud to share that this project has been selected and approved by the Ministry of Steel for Automotive Powertrain and Bearing steel, as part of the Production Linked Incentive (PLI) scheme for specialty steel. The project is progressing well and is expected to complete by early FY25.

Unlocking greater value through proposed merger with Tata Steel

The intended merger is anticipated to bolster operational e_ciency, provide a coordinated strategic approach, and enhance overall agility across the businesses. This amalgamation will also facilitate synergies through access to raw materials, centralised procurement, optimised inventory management, reduced logistics expenses, and improved utilisation of facilities. At present, the proposed merger has reached an advanced stage with the court-convened Extraordinary General Meeting conducted on June 29^th, 2023. Currently, it is undergoing necessary judicial and regulatory procedures, and we anticipate its completion by the end of the current _scal year.

Furthering commitment to decarbonisation and transformation

Our commitment to sustainability has led us to take bold measures to footprint. We have

reduce our CO2

prioritised the transition to green energy through various initiatives, such as the partial closure of one of the coal-based captive power plants at Gamharia, maximizing green power generation through waste heat recovery, changing fuel combination to reduce fresh coal usage. These e_orts, combined with increased throughput and reduced fuel consumption across our mills, have resulted in 9% year- emissions,

on-year reduction in CO2