A Memorandum of Settlement dated 5th September, 2008 has been signed between Tata Steel and the Tata Workers' Union, for Annual Bonus for the accounting year 2007-2008.

The Memorandum of Settlement dated 20th August, 2002 which was valid for 5 years has been extended for further one year for the accounting year 2007-08.

In accordance with it, the Annual Bonus for the accounting year 2007-08 is to be calculated on the basis of 50% on Production and 50% on Profitability. Based on this calculation, the Annual Bonus works out to 9.26% on Production and 10% on Profitability - thus making a total of 19.26% of salary / wages (Basic and DA) paid for the year 2007-2008.

However, on the request of the Union and in consideration of our centenary year and satisfactory performance during 2007-08 and also in order to keep up the morale of the employees, it is agreed to round-off the Bonus percentage for the accounting year 2007-08 from 19.26% to 20% (twenty) of salary/wages (Basic and Dearness Allowance) paid for the year.

Most of the employees of the Steel Company are drawing salary/wages higher than the limit laid down in the Payment of Bonus Act, 1965, such employees of the Company not eligible for bonus under the Act. However, respecting our old traditions, the Company is going to pay bonus to all employees in the unionised category.

At 20% (twenty) percent bonus, the minimum and the maximum annual bonus payable will be Rs. 9,154/- and Rs.75,372/- respectively. The total payout on account of annual bonus for the year 2007-2008 at Jamshedpur (Including Tubes) will be Rs 64 crores approximately. However, the amount being paid across Tata Steel (India operations) is Rs. 113.8 crores for the year 2007 - 2008.

Mr. B Muthuraman, Managing Director, Tata Steel and Mr. Raghunath Pandey, President, TWU and Senior Executives of the Company and Union Office Bearers signed the Settlement in the Board Room at Jamshedpur in the presence of Mr. R P Singh, Conciliation Officer and Deputy Labour Commissioner, Jamshedpur.

In a communiqué signed by the Managing Director, Tata Steel and President, Tata Workers Union, all the employees are being informed about the payment of annual bonus for 2007-08.