Page 38 - Tata Steel One Report 2024-Eng-Ebook HY

Business Operation and Performance Driving Business Towards Sustainability Corporate Governance Policy Financial Statements Attachments
Financial risks
Volatility in exchange rates, driven by external economic pressures such as trade tensions and commodity market fluctuations, coupled with increased liquidity risks and limited credit insurance coverage, presents significant challenges to the company’s financial stability and long-term viability.
Mitigation strategies
Foreign exchange rate fluctuations are being actively managed through an appropriate foreign exchange hedging mechanism aligned with the Company’s structured hedging policies oversight by the Tata Steel Regional Treasury Committee, with regular reporting to the Board of Directors to ensure alignment with corporate objectives.
Integration of working capital oversight and cash flow planning with the broader business strategy through coordination across Finance, Marketing & Sales, and Procurement to ensure optimal liquidity and cost-effective financial management
In addition, the Company manages and mitigates credit exposure by restricting sales to secured transactions only, actively monitoring customer accounts to ensure timely payments and promptly following up on any delays.
Emerging risk
Disruption of production and supply chain from natural calamities like flood and draught
Mitigation strategies
The Company’s inherent exposure to natural calamity is relatively minimal due to its operations being distributed across three separate locations. However, the company acknowledges the risks associated with operating in industrial zones and has established emergency response protocols at each of its facilities. Structured periodical mock drills are conducted to ensure effectiveness of such procedures. Business disruptions are effectively mitigated through adaptable supply chain strategies and by shifting operations between the three production units. Besides, the company has secured comprehensive insurance coverage for natural disasters and all industrial-related risks.
36 Tata Steel (Thailand) Public Company Limited