Directors' Report
 

FIXED DEPOSITS

The Company has not accepted any public deposits during FY 2012-13. As on March 31, 2013, the Company had deposits aggregating Rs.314.14 crores from 11,338 investors. There were no overdues on account of principal or interest on public deposits other than the unclaimed deposits as at the year end.

INFORMATION TECHNOLOGY INITIATIVES

The Company continues to leverage Information Technology (IT) as a key enabler of its strategy, business growth and competitiveness. IT provides employees, customers, suppliers, dealers and business partners with best in class technology solutions. IT leverages b partnerships with product and services companies to support business growth and innovation.

The Company and JLR entered into a major long term outsourcing agreement with Tata Consultancy Services Ltd (TCS) after a rigorous two year long competitive process. This will harmonise and standardise the IT services, service level agreements and standards across the Tata Motors Group and lead to efficiencies in operations and lower IT costs.

Other major highlights of IT at group level are –

  • The Company's unique CRM solution crossed 4,000 channel partner locations and 40,000 users interacting with customers, augumented by 1,000+ agent call centers.
  • TDCV Korea implementing CRM, leveraging TML CRM capabilities.
  • Tata Motors Indonesia implementing SAP and CRM leveraging base capabilities.
  • JLR global expansion to China is being ably supported by IT capabilities.
  • JLR SAP implementation is progressing smoothly, including implementation in NSCs in major markets.
  • Developing key business capability enhancement initiatives like Analytics, Telematics, and Mobility solutions.

In addition, product development processes in the Company continue to grow on best of the breed tools and technology solutions, for enhancing product development capabilities, addressing quality and speed. Digital product validation processes have evolved to provide solutions in key areas:

  • Enhanced Digital Manufacturing Planning capabilities.
  • In-house developed productivity improvement tools like 'Digital Vault' were rolled out.
  • In-house 'Knowledge Based Engineering' (KNEXT) applications spread and enhanced in various product design functions.
  • State-of-the-art visualization capabilities in digital product engineering review process is implemented.

Tata Motors Group continue their collaboration in various Information Technology areas with synergies being explored for cross utilization of IT capabilities. The Group companies are working together in areas of ERP, outsourcing and technologies. Tata Technologies continues to be a strategic partner in strengthening Tata Motors Groups' IT capabilities in process transformation through technology.

TECHNOLOGY AND ENVIRONMENT FRIENDLY INITIATIVES

The Tata Motors Group continues to innovate, with a view to enhance the market share and aims at products, which cater to the changing needs of the customer for both fleet owners and individual customers. Besides new product developments covered above, some of the key initiatives on Environment friendly technologies include:

  • Fuel efficiency improvement through development of advanced oil formulation.
  • Fuel efficiency improvement initiatives on 4 cylinder and 6 cylinder engines of LCV, M&HCVs through various engine measures such as Exhaust Gas Recirculation (EGR), common rail including latest software features in engine management system.
  • 1.2 L Bi-fuel CNG engine development for passenger car.
  • Bi-fuel CNG and Gasoline 273 MPFI engine for Nano.
  • Demonstrated a Mild Hybrid technology on Nano with advance engineering functions for enhancing the CO2 emission.
  • Nano Diesel variant is being developed with Electric Power Assist Steering (EPAS) for enhancing the ease of driving and good fuel economy.
  • Vista has been made compliant to the Euro V emission requirement with better drivability and higher technology features.
  • CNG variant of the Indigo CS is ready for launch in the market.

SUBSIDIARY AND ASSOCIATE COMPANIES

Tata Motors announces consolidated financial results on a quarterly basis. As required under the Listing Agreement with the Stock Exchanges, Consolidated Financial Statements of the Tata Motors Group are attached.

Pursuant to the provisions of Section 212(8) of the Companies Act, 1956 (the Act), the Ministry of Corporate Affairs vide its General Circular No 2/2011 dated February 8, 2011, has granted a general exemption subject to certain conditions to holding companies from complying with the provisions of Section 212 of the Act, which requires the attaching of the Balance Sheet, Profit & Loss Account and other documents of its subsidiary companies to its Balance Sheet. Accordingly, the said documents are not being included in this Annual Report. The main financial summaries of the subsidiary companies are provided under the section Subsidiary Companies: Financial Highlights for FY 2012-13' in the Annual Report. The Company will make available the said annual accounts and related detailed information of the subsidiary companies upon the request by any member of the Company or its subsidiary companies. These accounts will also be kept open for inspection by any member at the Registered Office of the Company and the subsidiary companies.

SUBSIDIARY COMPANIES

Tata Motors had 64 (direct and indirect) subsidiaries (10 in India and 54 abroad) as on March 31, 2013, as disclosed in the accounts. During the year, the following changes have taken place in subsidiary companies:

Subsidiary companies formed/acquired

  • Jaguar Land Rover India Limited - an indirect subsidiary of Jaguar Land Rover Automotive PLC
  • PT Tata Motors Distribusi Indonesia - a wholly owned subsidiary of PT Tata Motors Indonesia

Companies ceasing to be subsidiary companies

  • Tata Engineering Services (Pte) Ltd. - struck off from the Register of Accounting and Corporate Regulatory Authority (ACRA).
  • Miljobil Greenland AS, upon liquidation of TMETC's shareholding

Name changes

  • Jaguar Cars Limited to Jaguar Land Rover Limited
  • Jaguar Land Rover PLC to Jaguar Land Rover Automotive Plc

Besides the above, Jaguar Land Rover continued to integrate/restructure legal entities for manufacturing and for exporting globallly as combined brand legal entities. Other than the above, there has been no material change in the nature of the business of the subsidiary companies.

ASSOCIATE COMPANIES

As at March 31, 2013, Tata Motors had 8 associate companies and 4 Joint Ventures as disclosed in the accounts.

ENERGY, TECHNOLOGY &FOREIGN EXCHANGE

Details of energy conservation and research and development activities undertaken by the Tata Motors alongwith the information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given as an Annexure to the Directors' Report.

DIRECTORS

Mr Ratan N Tata stepped down as the Chairman and Director of the Company on December 28, 2012, in accordance with the 'Policy for Retirement Age of Non-Executive Directors' adopted by the Company. Mr Tata who was appointed on the Company's Board in 1981 and later as the Executive Chairman in 1988, had through his bold vision and strategic leadership and commitment to the Company transformed it from a domestic truck company to a complete automobile company with path breaking products such as the Indica and the Nano. Thereafter it was his understanding of the global dimensions and dynamics of the automobile business and his vision that led to the Company deciding to takeover Jaguar Land Rover in the UK. The transformation of Jaguar Land Rover through the change in its culture and the approach to its business led by Mr Tata has resulted in transforming Jaguar Land Rover into a profitable and successful company.

Mr Tata was on the Board for more than 30 years and was the Chairman of the Executive Committee of the Board and a member of the Remuneration and Nominations Committees. The Directors place onamp record the immeasurable debt the Company owes to Mr Tata for the; visionary leadership, strategic direction and stewardship so liberally given to the Company and in recognition of his immense contribution and great service to the Company, the Board conferred upon Mr Tata the title of 'Chairman Emeritus'. The traditions and values that he strove to imbibe will remain the guiding principles for this Company in the coming years.

Mr Sam M Palia, Non Executive, Independent Director of the Company since May 2006, on completing the age of 75 years on April 25, 2013, retired as per the "Policy for Retirement Age of Non-Executive Directors" adopted by the Company. Besides being a Board member, Mr Palia was also an active member of the Audit Committee and Nominations Committee and Chairman of the Investors' Grievance Committee and Ethics and Compliance Committee. Mr Palia was also designated as the 'Audit Committee financial expert' as required under the Sarbanes Oxley Act and NYSE Listing Agreement. Mr Palia had by his counsel and guidance, significantly contributed to deliberations at the Board and Committee meetings. The Board also placed on record its appreciation for the contributions made and the role played by Mr Palia as an independent director of the Company.

Mr Ranendra Sen, Non Executive, Independent Director of the Company since June 2010, resigned from the Board of Directors of the Company with effect from October 16, 2012, due to personal reasons. The Board placed on record its appreciation of the contributions made by Mr Sen during his tenure on the Company's Board as an independent director of the Company.

Mr Cyrus P Mistry was appointed as the Chairman of the Company with effect from December 28, 2012, consequent upon Mr Ratan N Tata's retirement. Tata Steel had vide their letter dated March 28, 2013, nominated Mr Cyrus P Mistry as the 'Steel Director' pursuant to Article 127 of the Company's Articles of Association in place of Mr Ratan N Tata.

Mr Karl J Slym and Ms Falguni S Nayar were appointed as an Additional Directors w.e.f. September 13,2012 and May 29, 2013, respectively. In accordance with Section 260 of the Companies Act, 1956 (the Act) and Article 132 of the Company's Articles of Association, they will cease to hold office at the forthcoming Annual General Meeting and are eligible for appointment. Mr Slym was also appointed as the Managing Director of the Company for a period of 5 years with effect from September 13, 2012, subject to the approval of the Members and the Central Government. An abstract and memorandum of interest under Section 302 of the Act, has been sent to the Members of the Company.

In accordance with the provisions of the Act and the Articles of Association of the Company, Mr Nusli N Wadia and Dr Raghunath A Mashelkar are liable to retire by rotation and are eligible for re-appointment. Attention of the Members is invited to the relevant items in the Notice of the Annual General Meeting and the Explanatory Statement thereto.

CORPORATE GOVERNANCE

A separate section on Corporate Governance forming part of the Directors' Report and the certificate from the Practicing Company Secretary confirming compliance of Corporate Governance norms as stipulated in Clause 49 of the Listing Agreement with the Indian Stock Exchanges is included in the Annual Report.

PARTICULARS OF EMPLOYEES

The Information on employees who were in receipt of remuneration of not less than Rs.60 lakhs during the year or Rs.5 lakhs per month during any part of the said year as required under Section 217(2A) of the Companies Act, 1956 and the Rules made thereunder is provided in the Annexure forming part of the Report. In terms of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any member interested in obtaining a copy of the same may write to the Company Secretary.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

A separate section on initiatives taken by the Tata Motors Group to fulfil its Corporate Social Responsibilities is included in the Annual Report.

BUSINESS RESPONSIBILITY REPORT

Vide its Circular dated August 13, 2012, Securities and Exchange Board of India (SEBI) mandated the inclusion of Business Responsibility Report (BRR) as a part of the Annual Report for top 100 listed entities based on their market capitalisation on BSE Limited and National Stock Exchange of India Limited, as on March 31, 2012. The said reporting requirement is in line with the 'National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVGs)' notified by Ministry of Corporate Affairs, Government of India, in July, 2011. Pursuant to the above, the Stock Exchanges amended the Listing Agreement by inclusion of Clause 55 providing a suggested framework of a BRR, describing initiatives taken by the Company from an environmental, social and governance perspective. In line with the press release and FAQs dated May 10, 2013, issued by SEBI, the Company's BRR is hosted on its website www.tatamotors.com. Any shareholder interested in obtaining a physical copy of the same may write to the Company Secretary at the Registered Office of the Company.

AUDIT

M/s Deloitte Haskins &Sells (DHS), Registration No. 117366W, who are the Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. It is proposed to re-appoint them to examine and audit the accounts of the Company for the FY 2013-14. DHS have, under Section 224(1) of the Act, furnished a certificate of their eligibility for re-appointment.

Cost Audit

As per the requirement of the Central Government and pursuant to Section 233B of the Act, the audit of the cost accounts relating to motor vehicles is carried out every year. Pursuant to the approval of Ministry of Corporate Affairs, M/s Mani and Company having registration No. 00004 were appointed as the Cost Auditors for auditing the Company's cost accounts relating to the Company's products for FY 2012-13. An application has been made to the Central Government seeking their approval, for the appointment of M/s Mani and Company for auditing the Company's cost accounts relating to the Company's products for FY 2013-14.

The cost audit report and compliance report for FY 2011-12 were filed by the Company on December 28, 2012, well within the prescribed due date of February 28, 2013. The cost audit report and compliance report for FY 2012-13 is expected to be filed within the prescribed time.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Act, the Directors, based on the representation received from the Operating Management, confirm that:-

  • in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;
  • they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;
  • they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
  • they have prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENTS

The Directors wish to convey their appreciation to all of the Company's employees for their enormous personal efforts as well as their collective contribution to the Company's performance. The Directors would also like to thank the employee unions, shareholders, fixed deposit holders, customers, dealers, suppliers, bankers, Government and all the other business associates for the continuous support given by them to the Company and their confidence in its management.

On behalf of the Board of Directors

CYRUS P MISTRY

Chairman

Mumbai, May 29, 2013
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