Professional Documents
Culture Documents
1. Profile
2. Organisational
Profile
3. Report
Parametres
Aspect
Indicator
Page #
Statement f rom MD
1.1
8-9
1.2
21-23
2.1
13
2.2
13
Operational Structure
2.3
13
Location of HQ
2.4
13
2.5
14
2.6
14
Markets served
2.7
14
2.8
14
2.9
15
Awards Receiv ed
2.10
15-18
Reporting Period
3.1
20
3.2
20
Reporting cycle
3.3
20
Contact persons
3.4
20
Report content
3.5
2-6
3.6
23
3.7
23
3.8
23
3.9
23
Restatements
3.10
23
3.11
23
3.12
2-6
3.13
23
4. Governance,
Commitments and
Engagement
5, Economic
Performance
Indicators
4.1
25-26
4.2
25-26
4.3
25-26
4.4
27-28
4.5
28-29
4.6
29
4.7
29
4.8
4.9
27
4.10
30
4.11
30-31
4.12
32
4.13
32
Stakeholder engagement
4.14
32
4.15
21
4.16
32
EC1
36-40
EC4
40
EC5
41
EC6
41
EC7
41
EC9
41-42
6. Environmental
Performance
Indicators
Materials used
EN1
45
EN2
45-46
EN3
46
EN4
46
Energy sav ed
EN5
46-47
EN6
47-48
EN7
47-48
EN8
48
EN9
48
EN10
48
EN11
48
EN12
48
EN13
49
EN14
49
EN15
49
EN16
50
EN17
50
EN18
50
EN19
51
EN20
51
EN21
52
EN22
52-53
EN23
53
EN24
53
EN26
54-55
EN27
55
EN28
56
6. Social
Performance
Indicators
EN29
56
EN30
56
LA1
59
LA2
59
LA3
59-60
LA4
60
LA5
60
LA6
61
LA7
61
LA8
61-63
LA9
63
LA10
63
LA11
63-64
LA12
63-64
LA13
65
LA14
65
HR2
66
HR3
66-67
HR4
67
HR5
67-68
HR6
68
HR7
68-69
HR9
69
SO1
70
SO2
70-71
SO3
71
SO6
71
SO7
71
PR1
72
PR2
72
PR3& 4
72-73
PR6
73
PR8
73
A
G3 Profile
Disclosures
G3 Management
Approach Disclosures
G3 Performance
Indicators
Beginning of each
section
Reported on 67
performance
indicators
S
E
L
F
D
E
C
L
A
R
E
D
1
Strategy and Analysis
T he Company has well-defined thrust areas for its community development initiatives which are
linked to national and international goals and standards, including the Human RightsCharter, Bharat
Nirman Programme and the Millennium Development Goals. Over a thousand youth from rural areas
adopted by the Company were trained in various technical and vocational trades. 350 of these youth
were trained at the Singur site in West Bengal, where the small car project wassupposed to come up.
As part of the women empowerment programme, over a thousand women were trained in sewing,
manufacturing food products and beautician courses.
T he Companys contribution in the national development, environmental conservation and societal
value creation has been acknowledged at various forums. The Jamshedpur plant was awarded the
National Energy Management Award by CII and declared the Energy Efficient Unit 2007. It also
received a trophy and award for Outstanding Performance by CII- ER Energy Conservation (ENCON)
Award 2007- 08 Contest. T ata Motors is also the only Indian automobile company that hasearned the
distinction of Notable COP for the third consecutive year in 2006-07.
T ata Motors is confident that the wealth generated as a result of development would not only power
the business but would also be ploughed back in the conservation and enrichment of environment
and for greater prosperity of the community.
Yours truly,
Ravi Kant
T he vision, mission and core values for the two business units of Tata Motors, Passenger Car and
Commercial Vehicle are given below:
10
11
2
Organisational Profile
12
T he wide array of commercial vehicles from T ata Motors is designed to take care of almost every
business needs, big and small. From rigid trucks to tractor trailers, from light commercial vehiclesto
specialised defence carriers, from luxury buses to compact city carriers, we have it all.
Commercial Vehicle Business Unit (CVBU) manufactures and markets commercial vehiclesranging
from 1.5 tonnes Gross Vehicle Weight (GVW) pick-ups to buses to 49 tonnes GVW heavy trucks. The
specifications of our trucks have become brand names in the market place such as 407, 709, 207DI,
2516, 4021, EX series, etc.
Passenger Cars Business Unit (PCBU) manufactures and markets cars (Indica and Indigo brand)
along with marketing of utility Vehicles like Sumo and Safari.
T ata Motors through its Engineering Research Centre provides design and development capabilities.
Both the business units of Tata Motors reach customer via large network of dealers, T ata Authorised
Service Stations, T ata Authorised Service Centres and spare parts distributors.
Operational structure of the organization, including main div isions, operating companies,
subsidiaries, and joint v entures
T ata Motors is a fully integrated automobile company. T oday, it is the only automobile manufacturer
to offer the entire range of commercial vehicles for transportation of goods and passengersand also
13
passenger cars in India through its two business unit viz. Commercial Vehicle Business Unit (CVBU)
and Passenger Car Business Unit (PCBU).
Over the years, T ata Motors has made substantial investments in building subsidiary and associate
companies that add value, facilitate and support its diverse range of business activities: T elco
Construction Equipment Co. Ltd. (Telcon), T ata T echnologies Ltd. (T T L), HV Axles Ltd. (HVAL), HV
T ransmissions Ltd. (HVT L), T AL Manufacturing Solutions Ltd. (T AL), T ata Marcopolo MotorsLimited
(T MML), T ata Motors (SA) Proprietary Limited (T MSA), T ata Motors (T hailand) Limited (TMTL), Tata
Motors European T echnical Centre (T MET C), T ata Motors Finance Limited (T MFL), T ata Motors
Insurance Broking and Advisory Services Limited (TMIBASL), Sheba Properties Ltd., T ata Daewoo
Commercial Vehicle Company Ltd (T DCV), T ML Distribution Company (T DCL), Automobile
Corporation of Goa Limited (ACGL), Fiat India Automobiles Private Limited (FIAPL), Tata Cummins
Ltd. (T CL), T ata AutoComp Systems Ltd. (T ACO), T ata Precision Industries Pte Ltd., Hispano
Carrocera S.A. and Nita Company Ltd.,
Location of organizations headquarters
In addition to the above, we also have a liaison office in Dubai which caters to promoting our
international business for the Middle East and Africa region.
Markets serv ed
T ata Motors has major operations in India with sales and marketing operations in more than 70
countries. T he scope of this report though, includes only Indian operations.
14
23,230
Rs. 330.94 billion
585,649
Gross debt
Share Capital
Largest Shareholder
Shareholding
T he Company is a widely held, listed company (including on the New York Stock Exchange), with
approximately 292,090 shareholders. T he Companys international offerings of Foreign Currency
Convertible Bonds are listed on the Luxembourg/Singapore Stock Exchanges. T he shareholding
pattern as on March 31, 2008 for the Company is given below:
Category
No. of shares
% of holding
Promoters
NRIs, Foreign Companies & ADRs
Gov ernment Companies, Financial Institutions, Banks
and Insurance Companies
Mutual Funds & Unit Trust of India
Foreign Institutional Inv estors
Others
128819405
79068379
57079243
33.42
20.51
14.81
10160944
65388543
44987440
2.63
16.96
11.67
Total
385503954
100
Significant changes during the reporting period regarding size, structure, or ow nership
Tata Motors acquired Land Rov er and Jaguar, part of Premier Automotiv e Group of Ford
Motor Company for US$ 2.3billion on cash free, debt free basis. The tw o enterprises w ere
formally transferred on June 2, 2008 at a signing ceremony at the Jaguar and Land Rov er
headquarters in West Midlands. To fund this acquisition, Tata Motors is raising Rs. 72000
millions on a rights basis and US $500/600 million through an international offering of equity
and/or cost effective quasi equity instruments. Jaguar and Land Rov er achieved rev enues of
US$ 19.09 billion for the financial year 2007-08.
15
16
vehicle tracking telematic device developed by T ata Motors for Indian truck driversand fleet
owners.
Process Related:
17
Commercial Vehicle Business Unit w ins Raj iv Gandhi National Quality Aw ard for 2007
T ata Motors, CVBU Pune has won the prestigious Rajiv Gandhi National Quality Award for
2007. CVBU Pune received this award in the large scale manufacturing organisation
category. T he Rajiv Gandhi National Quality Award is instituted by the Bureau of Indian
Standards (BIS), New Delhi and has criteria similar to prestigious international quality awards
like the Malcolm Baldrige National Quality Award USA, the European Quality Award and the
Deming Prize, Japan.
Recognitions:
Mr Kw ang-Ok Chae, President - Tata Daewoo, honoured w ith the 'CEO of Korea' award
Mr Kwang-Ok Chae, President - T ata Daewoo, was conferred with the ''CEO - Korea Award
2007'', by the Economic Review magazine of South Korea. T he award is given to an
outstanding South Korean CEO, who has contributed to the development of the national
economy, and generated a sense of achievement among citizens through exemplary
leadership and business innovation.
Mr. Viv ek Joshi bags patent for energy sav ing dev ice
18
Mr. Vivek Joshi from the Uttarakhand team has been awarded a patent (Patent No. 203430)
for an energy saving device for high pressure gas discharge lamps. T he patent isfor a period
of twenty years. T his device can save 22% electrical energy consumption and can be used in
any gas discharge lamp at home, in shops, malls, hotels offices etc.
3
Report Parameters
19
Reporting cycle
T his is the fourth GRI report from Tata Motors Limited. The reporting cycle for the GRI report is
annual.
Mr. M B Paralkar
Consultant Advisor CSR & IR
T ata Motors Limited, Pune
Phone 91 20 66132381
E Mail mparalkar@tatamotors.com
Website www.tatamotors.com
20
Opportunities and Threats have been identified through a combination of variousinstituted processes,
including the Enterprise Risk Management (ERM) process and interviews with department heads,
including vendor development, environment, safety and human resources. T hese are enumerated
below:
Opportunities
Road dev elopment: Continued improvement in road infrastructure in coming years is expected to
have a positive effect on automobile sales. T he Golden Quadrilateral road project was97% complete
as on March 31, 2008. T he North South East West (NSEW) road corridors are expected to be
completed by December 2009. Rural connectivity is expected to correspondingly improve which
would expand significantly the population/markets/supply sources participating in the overall
economic growth. Improvement in road infrastructure would facilitate faster transportation of goods
and passengers, and would in turn create demand for safer, reliable and faster vehicles. T he
Company is poised to benefit from the same as it has a wide range of goods and passenger
transportation vehicles ranging from 0.7 T on load carrier to large haulage tractors (49T ) for goods
movement, buses and coaches for public transportation and passenger cars and utility vehiclesfor
personal transportation.
21
Car penetration in India: T he reduction in excise duty on Small cars announced in the Budget is
expected to increase the penetration of cars in the country from 7 per 1,000 people ascompared to a
higher penetration level in developed and developing markets for example, Germany 550, France
495, Malaysia 253, South Korea 219, Brazil 96 and T hailand 51 cars per 1000 people. India and
China (with a car penetration of 6 per 1,000 people) are perceived as highly attractive marketsfor the
global automotive industry. Due to growth in urbanization and expansion of cities, the outlook for
growth in passenger car sales remains positive.
Increase in income lev els: A growing middle income level population, rise in their average income
levels, moderation in income tax rates and the recently announced increase in compensation for
government employees, all augur well for the automotive industry, both in terms of personal
transportation requirements as well as freight movement.
Large tw o wheeler parc/market: India has a 60 million two wheeler parc and an annual sale of over
7.2 million two wheelers. T he Company believes that the gap between two wheeler pricesand the
current entry level car prices offer a huge opportunity for an affordable, safe and comfortable small
car with appealing design and features. It is hoped that the T ata Nano would address this huge
potential in demand.
International business: India continues to be a cost effective source for the automotive industry
globally, both for vehicles and components. Indias manufacturing base will benefit from these scale
economies and technology/quality improvements. T he Companys exports currently constitute 9.8%
of the total sales value and have opportunities to increase significantly, particularly with the new and
contemporary product offerings in commercial vehicles and passenger cars. T he Company is also
setting up / exploring manufacturing footprint overseas that would combine these advantageswith
local operations and sourcing in these markets.
Growing consumer culture: T he demand for a better lifestyle has enhanced consumption levelsand
rapid growth in several areas like retail chains, cellular phones and cable and satellite television. The
Company, with its wide portfolio is expected to benefit from improvement in lifestyle and higher
aspiration levels in passenger cars and potential growth in freight movement.
Threats
Credit unavailability: Further tightening of liquidity position and reduction in exposure to vehicle
financing by banks/NBFCs would have an adverse impact on the automotive industry. T hough inhouse vehicle financing has been strengthened by the Company, it would be a challenge for the
Company to fully offset the decrease in credit availability from outside sources.
Interest rates hardening and other inflationary trends: Further hardening of consumer interest
rates could have an adverse impact on the automotive industry. Increase in inflation could also have
a negative impact on automobile sales in the domestic market.
Fuel Prices: T he international crude prices witnessed steep increase from price levels of $62 per
barrel at the beginning to $100-110 per barrel towards the end of the fiscal. Further hardening of fuel
prices would adversely impact the automotive sales.
Input Costs: Prices of commodity items like steel, non-ferrous and precious metals and rubber
witnessed an upward movement, which was partially offset by the Companys cost reduction
initiatives. The price of steel, in particular, has increased by 30% 35% in the last 24 monthsand is
expected to further increase significantly in the coming year. Whilst the Company continuesto pursue
cost reduction initiatives, increase in price of input materials could have a negative impact on the
demand in the domestic market and/or could severely impact the Companys profitability to the extent
that the same are not absorbed by the market through price realisation.
Government Regulations: Stringent emission norms and safety regulations could bring new
complexities and cost increases for automotive industry, impacting the Companys business. WTO,
22
Free T rade Agreements and other similar policies could make the market more competitive for local
manufacturers.
Global Competition: India continues to be an attractive destination for the global automotive players.
T he global automotive manufacturers present in India have been expanding their product portfolio
and enhancing their production capacities. T o counter the threat of growing global competition, the
Company has planned to bridge the quality gap between its products and foreign offerings while
maintaining its low cost product development/sourcing advantage.
Growing consumer aw areness: Growing awareness amongst consumers is driving up expectations
from automobile companies in terms of providing world class features and technology for which
adequate price realization is not always possible.
Growth in Mass Transit Systems: T he domestic passenger vehicle demand could be impacted by
the growth of road and rail based mass transit systems. However, the Company would benefit from
the road based mass transit system due to its wide range of commercial passenger carriers.
Boundary of the Report
T his report includes only Indian manufacturing Operations of T ata Motors. T he sales and revenue
figures include international business. T he products and services of Commercial Vehicle and
Passenger Car Business Units (CVBU and PCBU) including T rucks, Buses, Multi-Utility Vehicles,
Sports Utility Vehicles and cars is included in the scope of the report. In addition, operations of
Engineering Research Centre are also included. Economic indicators are provided for CVBU, PCBU
and International Business. International Business exports are included in the CVBU and PCBU
business.
Specific limitations on the scope or boundaries
T ata Motors would not be reporting on all indicators as the data compilation for some of the indicators
is still underway. Attempt would be to report on such indicators in subsequent reports.
Basis for reporting on Subsidiaries and Associate Companies
We have added to this years GRI report, a summary of the financial performance of T ata Motors
primary subsidiary and associate companies. Information reported for the subsidiaries and associate
companies is sourced from our Annual Report 2007-08.
Data measurement techniques
T ata Motors has implemented SAP 4.6c system for its data operations reliability and hasintegrated
its operations under it. T he SAP Modules implemented include Finance (FI), Production Planning
(PP), Material Management (MM), Sales and Distribution (SD) Quality Management (QM).
T ata Motors also uses Indian GAAP for reporting its financial performance (from which most of the
Economic performance indicators have been addressed). Most financial details have been sourced
from the Annual Report, which are in turn verified by external auditors.
Internal and external audit practices are designed to provide assurance on systems and data. These
include Corporate Assurance Process every year with the help of Tata Quality Management Services,
Internal and External Financial Audit, ISO 14001 as also ISO 9000 -2000 and IS/T S16949.
Explanation of the effect of any restatement
T here are no re-statements from T ata Motors
Significant changes
Disclosure on Management processes for the performance indicators is being included in the report.
23
4
Governance, Commitments and
Engagement
24
Name of
Committee
Audit
Committee
Role
The Audit Committee f unctions according to its Charter that def ines its
powers, scope and role in accordance with the Companies Act, 1956, listing
Status on
Independence
All 3 Independent
Directors
25
Remuneration
Committee
2 Independent and 2
Non-Executiv e
Directors
Inv estors
Griev ance
Committee
The Inv estors Griev ance Committee of the Board is empowered to oversee
the redressal of inv estors complaints pertaining to share/debenture
transf ers, non-receipt of annual reports, interest/dividend payments, issue of
duplicate certif icates, transmission (with and without legal representation) of
shares and debentures and other miscellaneous complaints
1 Independent
Director as Chairman,
1 Non-Executiv e and
Managing Director
Ethics &
Compliance
Committee
Chairman being
Independent Director,
1 Non-Executiv e
Director and 1
Executiv e director
Executive
Committee of
Board
The Executive Committee of Board rev iews capital and rev enue budgets,
long-term business strategies and plans, the organizational structureof the
Company , real estate and inv estment transactions, allotment of shares
and/or debentures, borrowing and other routine matters. The Committee
also discusses the matters pertaining to legal cases, acquisitions and
div estment, new business f oray s and donations
5 Non-Executiv e
Directors, 1 Executive
Director and
Managing Director
Nominations
Committee of
the Board
4 Non-Executiv e
Directors
Donations
Committee and
Corporate
social
Responsibility
Committee
The Donations Committee reviews and approves donations to nongov ernmental organisations/non-prof it institutions on basis of need and
merit. The CSR Committee rev iews, monitors and guides the CSR work
undertaken across all locations
Managing Director
26
T he relationship between the Board, the Committees and the senior management functions is
illustrated below:
Shareholders/Investors
A monthly shareholders report is sent to the Board members which describes the shareholding
pattern and also the performance of T ata Motors stock with respect to the other automotive
27
companies and the stock indices. The report also highlights the expectations from various equity
analysts and the Companys performance vis--vis the same. T he Ethics & Compliance Committee
also reviews on a monthly basis the trading in the Companys shares by the designated employeesto
ensure that they do not unduly benefit on account of access to unpublished price sensitive
information. Investors Grievance Committee reviews the investor grievance redressal procedure and
also proactively gives suggestions/directions to protect the interest of the investor.
On recommendations of the Investors Grievance Committee, the Company has taken various
investor friendly initiatives like sending of reminders to investors who have not claimed their dues,
launching an odd lot scheme, sending nominations forms, launching a shareholders discount
scheme, arranging factory visits, etc. Critical feedback, complaints and suggestions received from
investors are considered appropriately and addressed.
Channel partners/Suppliers:
A Supplier Relationship Management programme and Dealer Management System are in place and
the Management Committee reviews the programme from time to time. The key indicatorsof review
are the Supplier coverage and the efficiency of the transactions with the Company. T he Company
also organizes Suppliers day/Vendor meets/Channel partner meets where suppliers can touch base
with the Board members and share their thoughts and inputs.
Employees:
T he Management Committee on a very regular basis reviews the employees issues. T he
remuneration guidelines, the employee satisfaction, the employee growth plan and the organization
culture are discussed in these meetings. Major employee welfare schemes are put up to the Board for
approval. T he Board is also kept informed of senior level changes in management, statuson signing
of Union wage agreements, remuneration of senior executives, etc.
Customers:
T he Company is also in the midst of implementing a very comprehensive Customer Relationship
management program which is reviewed by the Management Committee and the Board subCommittees from time to time. T his program ensures that the Customers are treated in the fair
manner by the channel members of the Company and their needs are also captured and responded
to through this programme.
28
to the Notice of the General Meeting. T he Annual Report contains details of the remuneration drawn
by the Whole-time Directors.
T he remuneration by way of commission paid to the Non Whole-time Directors is decided very
objectively by the Board of Directors and distributed to them based on their attendance and
contribution at the Board and certain Committee meetings, as well as time spent on operational
matters other than at the meetings. Approval of the shareholders is taken for payment of commission
to Non-Executive Directors which is within the limits prescribed under the Companies Act, 1956.
Appropriate disclosures are made in the notice of the General Meetings. The Annual Report also
contains details of the remuneration paid to the Directors - both Executive and Non-Executive
Directors.
Process to avoid conflicts of interest
T o ensure that no conflict of interests arise among the highest governing body, transparency in
operations and selection and disclosure policies for governance is maintained. T he Board of the
Company has adopted the Code of Corporate Disclosure Practices according to which the public
spokespersons are identified who are responsible in ensuring timely and adequate disclosure of price
sensitive information. T his Code ensures simultaneous release of information through various
mediums of disclosure/dissemination in a transparent and fair manner. Information isavailable to the
shareholders through Annual Reports and half-yearly communications which are dispatched to them,
besides press releases for audited quarterly financial statements, which are also intimated to Stock
Exchanges. T his information is also available on the Companys website. T he 20F Annual Report
prepared as per the US regulations and the New York Stock Exchange Listed Manual provides
information which is not normally in the public domain vis--vis other listed companies, is also
available on the website of the Securities and Exchange Commission and the Company. The 20-F
Annual Report contains information on five-year financial data under US GAAP; risksassociated with
the Companys business; investments in the Company and relating to ADRs; a business overview
which includes sections on the Indian economy and the automotive market and competition; business
strategy and operations; a complete product profile; production facilities and distribution network;
R&D initiatives; intellectual property; legal proceedings; organisation structure; subsidiaries and
affiliates; operating and financial review and prospects; capital expenditure incurred and sourcesof
financing; details of the auditors; Board composition and management; governance structure;
shareholding pattern; dividend policy; share and ADR price; rights of shareholders; exchange control
policy of the Government and taxation as relevant to investors; Chief Executive Officer and Chief
Financial Officer certification to the investors and audited consolidated financial statementsfor the
last three years.
T o ensure that the Company has disclosed relevant, accurate and complete information to its
investors so as to ensure that the Companys financial condition and results of operations in all
material respects have been disclosed on a timely basis under the applicable laws, the Company
recently constituted a Disclosure Committee comprising of the senior management as also headsof
the larger subsidiary companies.
Selection Criteria for Board members
T he Directors are selected based on the following criteria:
Business experience
Expertise in the field
Ability to bring in the external perspective
Relation to the Company and Board
29
T he Board takes responsibility for the total process of risk management in the organization. The Audit
Committee reviews with the Management, External and Internal Auditors, the adequacy of internal
control systems. It reviews management letters / letters of internal control weaknesses issued by
Statutory / Internal auditors. T he Management implements actions to mitigate residual risks. T he
Board assures all stake holders about adequacy of internal control Systems and documents
procedures in the Companys Annual Report.
T he Management is accountable for the integration of risk management practicesinto the day to day
activities. Lapses are highlighted as findings after risk assessment or audit reviews.
T he Risk management and internal control model and framework adopted by the Company provides
the Board reasonable assurance on the effectiveness and efficiency of the Companysoperations; the
safeguarding of the Companys assets, the Companys compliance with laws, regulations and
supervisory requirements; the sustainability of the Companys operations under normal and adverse
operating conditions; the reliability of the Companys reporting and the Companys responsible
behaviour towards all stakeholders.
Ev aluating the Boards Performance
T he organisation has adopted the Balanced Scorecard concept and an online dynamic Performance
Appraisal System which is a fairly transparent and formal procedure for deciding on the director,
senior and middle management remuneration
30
philosophy, employee competence, etc. supports risk management. T he risks are assessed on an
ongoing basis and controls are designed to respond to risk throughout the Company.
T here is a twofold approach to Risk Management:
1. Enterprise Risk Management (ERM)
2. Internal Audit
31
Audits are conducted by way of Self Assessment Questionnaires or through full fledged audits. The
Audit Committee reviews audit reports every quarter. Audit Reports are classified as Section A and
Section B type reports. T he Audit Committee reviews observations and recommendationshighlighted
in Section A reports as well as critical issues pertaining to Section B reports. T he timelines for
implementing the recommendations is monitored by way of a robust process, which yieldsmeaningful
and actionable reports
Stakeholder Engagement
Approach
Engagement of
Stakeholders:
Meetings, f eedbacks,
I nt eractions, etc
Identify their
c oncerns and
Is sues
Prioritize
c oncerns and
is sues
S teering Committee
Review and
c orr ective action
Report and communicate
to all stakeholders
(Ann ual Report, Cha irman &
ED le tters/GRI & Corpo rate
Gove rna nce reports, etc)
Address concer ns
and issues in
Strategy Planning
Process
Set Goa ls , targets
Ba lanced
S co recard &
I nit iat ive s
S t ra te gic
Di re cti on
Stakeholder engagement and input is central to the entire strategic planning and deployment
exercise. T here are several mechanisms (as detailed in Annexure) through which the Company
engages its stakeholders and identifies the key stakeholder concerns and issues.
T he organizational challenges and issues identified are considered in the strategic planning process
to determine strategic objectives.
T he vision, mission and values guide the strategic planning process. T his process also involves a
comprehensive external environment scan, various survey feedback, inputs, SWOT (strengths,
weakness, opportunities and threats) analysis and business planning exercise. After identification of
key business drivers, the short terms and long term strategic objectives are identified. T he strategic
objectives are deployed using the balanced scorecards, which balance the needs of all stakeholders.
An indication of how various objectives are aligned with stakeholder concerns has been provided in
Annexure I (Stakeholder Engagement Chart).
32
5
Economic Management Approach
and Performance Indicators
33
MANAGEMENT APPROACH
Risks and concerns identified for the economic performance of the company are enumerated
below :
Interest rates and credit availability: Consumer interest rates witnessed an upward movement in
the second half of FY 07-08. Further tightening of the liquidity position, non-availability of vehicle
finance and firming up of interest rates would affect vehicle demand, which could impact the
Companys revenues and profits.
Exchange rates: The Companys exports constitute 9.8% of the turnover and imports constitute
4.6% of material consumption. Further, the Company has large foreign currency borrowings in the
form of foreign currency convertible securities. Movements in exchange rates and volatility in the
foreign exchange markets could significantly impact profits.
Freight Rates: Moderation in industrial activity, slowdown in freight movement and increase in fuel
price would adversely impact vehicle operators margins to the extent not recovered through increase
in freight rates. T his would have an adverse impact on commercial vehicle demand.
Railways: Railways renewed focus on cement and steel movement and container movement and
planned nationwide rail freight corridor connecting major cities could impact the demand of
commercial vehicles for goods transportation. However, it is expected that with the growth in road
infrastructure and increase in vehicle penetration and with product offerings suitable for different
applications, road transport would continue to have a dominant role and offer flexible, speedy and
point-to-point service.
Domestic market: T he commercial vehicle industry due to its strong linkages with the economy
would be impacted by slowdown in economic growth. T he Company has strengthened itslesscyclical
businesses like passenger carriers, small and light trucks and passenger cars as well as its spare
parts and other service offerings to counter moderation in demand. T he increasing trend of offering
price discounts in the market could also affect the Companys margins.
Ov erseas markets: In the overseas markets, many of which have stricter norms of vehicle
regulations related to emission, safety, noise, technology, etc., the Company competes with
international players which have global brand image, larger financial capability and multiple product
platforms. These factors may impact the demand of the Companys products in overseas markets.
Manufacturing: T he Company manufactures its products at multiple locations and its operations
could be affected by disruption in its supply chain due to any natural calamities and workstoppages
at its suppliers end due to load shedding, labour problems, etc.
New Competition: Intensity of competition has increased in almost all the segments of the Indian
automotive market due to entry of new players and expansion plans of existing ones. The Company
is aware of the increasing competition and is taking measures to remain competitive in the market
place.
34
New proj ects: T he Company is undertaking a variety of new projects ranging from the launch of a
small car to the development of a new truck model. T hese projects are in variousstagesof execution.
T hough the Company employs sophisticated techniques and processes to forecast the demand of
new products, yet the same is subject to margin of error. T imely introduction of new products, their
acceptability in the market place and managing complexity of operations across various
manufacturing locations would be the key to sustain competitiveness.
Internal Control Systems and their adequacy to manage these risks are highlighted below :
T he Company has in place adequate system of internal control. It has documented procedures
covering all financial and operating functions. T hese controls have been designed to provide a
reasonable assurance with regard to maintaining of proper accounting controls, monitoring of
operations, protecting assets from unauthorized use or losses, compliances with regulationsand for
ensuring reliability of financial reporting. The Company has continued its efforts to align all its
processes and controls with global best practices in these areas as well.
T he Management Approach managing economic risks and concern is to have a robust internal
control system so as to achieve the maximum economic value creation. Some significant featuresof
the internal control systems are:
T he Board takes responsibility for the total process of risk management in the organisation. The Audit
Committee reviews reports covering operational, financial and other business risk areas. Through an
Enterprise Risk Management programme, each Business Unit addresses opportunities and the
attendant risks through an institutionalized approach that is aligned to the Companysobjectives. This
is also facilitated by internal audit. T he business risks are managed through cross functional
involvement and intense communication across businesses. Results of the risk assessment and
residual risks are presented to the senior management.
35
36
104522.7
49102.7
(2728.5)
60.5
150957.4
62805.2
78395
9757.2
150957.4
330939.3
43631.1
287308.2
4831.8
292140.0
2. Expenditure
37
240939.3
15445.7
643.5
6523.1
2823.7
266375.3
25764.7
20289.2
10138.3
30427.5
Appropriations
(i) Proposed Dividends
(ii) Tax on Proposed Dividends
(iii) General Reserve
(iv) Balance carried to Balance Sheet
5784.3
812.5
10000.0
13830.7
30427.5
Donations
T otal Donations disbursed during 2007-08 to various non-governmental and non-profit institutions,
based upon merit and need Rs. 12.8 millions.
Community Inv estments
T ata Motors invests in various CSR projects that target improvement of quality of life of people. The
thrust areas for these projects include - Education, Health, Employability and Environment. T he
Company views the expenditure in such projects as an investment and not a cost. In the year 200708, investments in social and community projects amounted to Rs. 12.5 millions. T his amount is
excluding administrative expenditures involved.
Summary of Economic Performance of Subsidiary and Associate Companies
Subsidiary Companies
For the financial year ended March 31, 2008, the Companys subsidiaries, on an aggregate basis,
have significantly improved on their financial performance and profitability. A brief profile of the
subsidiary companies and their main financial parameters for FY 2007-08, are given below:
T ata Daewoo Commercial Vehicle Company Limited (T DCV), Korea is a 100% subsidiary of the
Company is the second largest manufacturer of Heavy and Medium commercial vehicles in Korea.
During the year ended March 31, 2008, T DCV recorded a turnover of Rs. 28650.2 millions, which is
45% higher to the previous year. PAT increased by 78% and stood at Rs. 1531.1 millionsasagainst
Rs. 974.6 millions in 2006-07.
T elco Construction Equipment Company Limited (T elcon) is engaged in the business of
manufacturing and sale of construction equipment and allied services in which the Companyhas60%
38
holding and Hitachi Construction Machinery Company Limited, Japan, holds 40%. During the year,
the Company divested 20% of its stake to Hitachi, thus reducing its stake from 80% to the present
60%. With the increase in economic activity especially in the infrastructure sector, Telcon recorded its
best performance to date having sold 7,698 machines with a Profit After Tax of Rs. 3240 millions.
T ata Marcopolo Motors Limited (T MML) is engaged in the business of manufacture and sale of fully
built buses and coaches in which the Company has a 51% holding with the balance 49% being held
by Marcopolo S.A., Brazil. The Company started its commercial production from November 2007 and
has sold 190 low entry CNG buses. T MML recorded a net turnover of Rs. 65.7 millions and lossafter
tax is Rs. 38.3 millions.
T ata Motors (SA) Proprietary Limited (T MSA) a joint venture company was incorporated during the
year in which the Company holds 60% with the balance 40% being held by the Tata Africa Holdings
(SA) (Pte.) Limited. T MSA has been formed for manufacturing and assembly operations of the
Companys Light and Heavy commercial vehicles and Passenger Cars in South Africa. TMSA hasyet
to start its operations.
T ata Motors (T hailand) Limited is a 70:30 joint venture between the Company and T honburi
Automotive Assembly Plant Co., for manufacture, assembly and marketing pick-up trucks. The joint
venture enables the Company to address the ASEAN and T hailand markets, the latter being the
second largest pick-up market in the world after the USA. While T MT L has begun setting up
operations in 2007-08, the manufacturing of vehicles began only during March 08 with revenuesfrom
sales and other income at Rs. 9 millions.
T ata Motors Finance Limited a wholly owned subsidiary of the Company, is registered with Reserve
bank of India as a Non-Banking Finance Company and has been classified an Asset Finance
Company. During the year under review, total income was 423% higher than last year and stood at
Rs. 8369.5 millions, with Profit Before T ax of Rs. 502.6 millions exceeding the 2006-07 figuresby
150%.
T ata T echnologies Limited (T T L), along with its subsidiaries is in the businessof providing information
technology services. T ata Technologies Pte. Ltd. (TT PL) which became a subsidiary of TTL acquired
T ata T echnologies, USA, (TT US) in March 2006. T T US acquired INCAT International Plc (INCAT), a
global provider of Product Life Cycle Management (PLM), Engineering and Design services to
automotive and aerospace industry. INCAT acquired CEDIS Mechanical Engineering GmbH, in
January 2006, to enhance its presence in its lines of business in Germany. T T L incorporated a wholly
owned subsidiary in T hailand named T ata T echnologies (T hailand) Limited which would be TTLs
second global delivery to take advantage of the growth in the area. T T L has 13 subsidiary companies
as on March 31, 2008.
T he Company holds 81.71% of T TLs share capital. T he year marked an important milestone in the
growth history of the Company with consolidated revenues crossing the Rs. 10,000 millionsthreshold.
T AL Manufacturing Solutions Limited (T AL) is a 100% subsidiary of the Company engaged in the
business of providing factory machine tools, equipments, material handling systems and fluid power
solutions. During the year, it has ventured into Aerospace business by signing agreement with Boeing
Corporation, USA for manufacturing structural components. T AL has also signed sales and service
agreement with HELLER, Germany, a globally renowned manufacturer of high end machining
centres. T AL recorded a turnover of Rs. 2205.8 millions and a Profit After T ax of Rs. 120.2 millions.
HV Transmissions Limited (HVT L) and HV Axles Limited (HVAL) 85% subsidiary companies of the
Company are engaged in the business of manufacture of gear boxes and axles for Heavy and
Medium commercial vehicles, with production facilities and infrastructure based at Jamshedpur. With
the rise in demand for Medium and Heavy commercial vehicle over the years, major improvement
39
initiatives were undertaken at HVT L and HVAL. Both HVT L and HVAL manufactured prototypesof
gear boxes and axles for application in the Companys new products. HVT L recorded a 9.39%
increase in its turnover of Rs. 1919.8millions in 2007-08, PAT being Rs. 474.4 millions. HVAL
recorded a turnover of Rs. 2032.4 millions and a PAT of Rs. 634.1 millions.
T ML Distribution Company Limited (T DCL) a 100% subsidiary of the Company incorporated on March
28, 2008 would be engaged in the business of dealing and providing logistics support for distribution
of the Companys products throughout the country. T DCL is yet to start operations.
Sheba Properties Limited is a 100% owned Investment Company, whose income was Rs. 213.7
millions and Profit After T ax was Rs. 162.2 millions.
Concorde Motors (India) Limited (CMIL), a 100% subsidiary of the Company engaged in salesand
service of T ata and Fiat passenger cars recorded a turnover of Rs.6252 millions with PAT of Rs. 53.3
millions.
T ata Motors Insurance Broking and Advisory Services Limited (T MIBSAL) (formerly known as Tata
Motors Insurance Services Limited), a 100% subsidiary of the Company, proposes to undertake the
business of direct insurance broking. T MIBSAL has received a licence from Insurance Regulatory and
Development Authority (IRDA) to act as Direct Broker under the IRDA Act on May 13, 2008. Pending
the issue of licence, no business was carried out during the period of October 2005 to March 2008.
T ata Motors European T echnical Centre plc. (T MET C) is a 100% subsidiary of the Company engaged
in the business of design engineering and development of products for the automotive industry.
Working synergistically with the Company, T MET C provides it with design engineering support and
development services, complementing and strengthening the Companys skill sets and providing
European standards of delivery to the Companys passenger vehicles. T MET C earned gross
revenues of Rs. 1279.5 millions and an operating profit of Rs. 114.3 millions as against Rs. 70.8
millions in 2006-07.
Associate Companies
Automobile Corporation of Goa Limited (ACGL) in which the Company has a 37.79% shareholding
was incorporated in 1980, jointly with EDC Limited, a Government of Goa enterprise. ACGL isa listed
company engaged in manufacturing sheet metal components, assemblies and bus coachesand is
the largest supplier of buses (mainly for exports) to the Company.
Fiat India Automobiles Private Limited (FIAPL) is a Joint Venture with Fiat auto S.p.A., Italy to
manufacture Fiat and T ata cars and powertrains at Ranjangaon, Maharashtra, India. The new facility
was inaugurated on April 2, 2008 and is one more step towards confirming the strong motivation and
understanding between the partners towards developing new opportunities in India and abroad.
T ata Cummins Limited (T CL), in which the Company has a 50% shareholding, with CumminsEngine
Co. Inc., USA holding the balance. T CL is engaged in the manufacture and sale of high horse power
engines used in the Companys range of Medium/Heavy commercial vehicles.
T ata AutoComp Systems Limited (TACO) is a holding company for promoting domestic and foreign
Joint Ventures in auto components and systems and is also engaged in engineering services, supply
chain management and after market operations for the auto industry. T he Companysshareholding in
T ACO is 50%.
T ata Precision Industries Pte. Ltd., Singapore, in which the Company has a 49.99% shareholding, is
engaged in the manufacture and sale of high precision tooling and equipment forthe computer and
electronics industry.
40
Nita Co. Ltd., Bangladesh, in which the Company holds 40% equity, is engaged in the assembly of
T ata vehicles for the Bangladesh market.
Hispano Carrocera S.A. (HC), a well-known Spanish bus manufacturing company, in which the
Company acquired a 21% stake in March 2005, was another major step in the Companysplansfor
globalization. Hispano has two manufacturing units, one in Spain which caters to the European
market and the other tone in Casablanca which caters to the Moroccan and other North African
markets. HC is present in both the city bus and coach market segment in both the geographies. HC
reported a production of 375 buses during FY 2007-08 on a consolidated basis.
EC 5: Range of ratios of standard entry level w age com pared to local minimum wage
at significant locations of operation
If a comparison is made of entry points of wages with the Minimum wages as prescribed bythe law,
T ata Motors offers more than double the minimum prescribed by law. With experience and the tenure
of service, the average wages that an operative earns improve the quality of life that the individual
can enjoy in the society.
41
1,058,355
23,230
5000
Employment
thr ough social
initiatives *
232,864
18,000
10,300
Employees in
Subsidiar ies
Employment
gener ated through
channel par tners
Dir ect
Employees
Indirect
employment fr om
passenger car s **
42
6
Environment Management Approach
and Performance Indicators
43
MANAGEMENT APPROACH
T ata Motors Ltd, (T ML), plans for the environment in its processes, products and services. Facilities
and Environment Management is identified as a Business Process and is formally documented in our
Enterprise Process Manual. Facilities and Environment Management process is mapped in detail
and the measures for effectiveness and efficiency of the process are specified. This hashelped the
Company to evolve a uniform approach across all manufacturing locations in the country.
Environment Management system at T ata Motors is given below:
Inp uts
ISO:14001
New developments
Global developments such
Outp uts
Impr ovements in
as Climate Change
envir onmental
per for mance (e.g.:
r eduction in pollution;
e.g.: r eduction in natur al
r esour ce consumption;
e.g.: elimination of
hazar dous mater ial etc.)
Compliance to
envir onmental
r equir ements as per
statutory nor ms
Reduce CO2 emissions /
incr eased car bon offsets
Pe r fo r mance M easur e
Unit
Efficie ncy
Impr ovement over pr evious year s
environmental per for mance
* TISHD Tata Ind e x fo r Sustainab le
Hum an De v e lo p m e nt
Effe ctive ne ss
Ratio
(TISHD*)
44
All our manufacturing facilities (Pune, Jamshedpur, Lucknow and Uttarakhand) have been certified to
the ISO:14001 Environmental Management System (EMS) Standard. At Jamshedpur the
Engineering, Health Care & Civic Services to T ata Motors T ownship have also achieved certification
to ISO:14001.
Consumption in 2007-08*
Steel ( T housand MT )
205.094
Oils (KL)
26947.79
936.64
9509.9
* Data includes three main manuf acturing units in India, v iz. Jamshedpur, Pune and Lucknow
45
Collapsible, custom-built polypropylene (PP) boxes have been developed for bought out
components that are bulky and light (e.g.: dashboards). These PP boxes can be dismantled,
flattened and returned to vendors for re-use, eliminating the use of virgin packaging material each
time. With a cycle time of more than 150 trips these polypropylene boxes have resulted in
significant savings on component packaging.
2007-08
2339.25
2556.11
* Data includes two main manuf acturing units in India, v iz. Pune and Lucknow
46
avoiding pollution due to power generation processes. Energy conservation is driven throughout the
organization, by way of setting Division-wise targets and monitoring performance on everyday basis
for optimizing energy consumption.
Company has started several Energy Accounting and Energy Conservation programmes, some of
which are highlighted below:
Introducing Fiber Reinforced Plastic blades for man-coolers.
Installing variable speed drive for flow control and energy saving
Introduction of fuel additives in Furnace Oil to improve the combustion efficiency of the fuel.
Soft-start energy savers for hydraulic press motors
Sheds designed for efficient natural lighting.
Use of compact fluorescent lamps, sodium vapours lamps to minimize energy consumption.
Installing portable compressors for isolated running to save compressed air
Harnessing natural daylight by installing translucent roof sheets in workshops
Use of Liquefied Petroleum Gas in place of Light Diesel Oil and Electricity for heating, wherever
applicable.
Installation of Turbo Ventilators in forge and Foundry to extract fumes which do not require
energy to operate
Representatives of the Company are participating in the following national committees working for
improvement of environment throughout the country:
1. Technical committee for Air quality monitoring, emission inventory and source apportionment
studies for Indian cities constituted by Central pollution control board, Delhi
2. Group on T echnical evaluation of Automotive Research Association of India reports on
development of emission factors constituted by Central pollution control board, Delhi
3. Technical committee for Heavy-duty Diesel retrofit demonstration project constituted byNational
environmental engineering research institute, Mumbai
4. Multi stakeholder committee to Develop Better environmental sustainability targets for lead
battery manufacturers constituted by development alternatives, Delhi in collaboration
occupational knowledge international, UK and national referral center for lead poisoning, India
5. Steering committee for Mobile Air conditioning Assessment project constituted by The Energy
Research Institute (T ERI), Delhi
EN 6 & EN 7:
Initiatives to use renewable energy sources and increase energy efficiency
The Env ironment Challenge: T he demand for energy has grown along with rapid industrial growth.
Studies have forecast a shortage of fossil fuel worldwide leading to ultimate extinction, when natural
deposits will be completely depleted. Fossil fuel based conventional power generation isrecognized
as a major contributor to environmental pollution and to the Greenhouse Effect.
Wind Pow er as an alternate source of energy: Wind power is a clean and cost effective
renewable energy source. Wind energy has emerged as an economically lucrative and the cheapest
source of electrical energy which offers financial returns within a short period of time. It is further
estimated that approximately 1000 Units of electricity saved is equivalent to 1 tonne of carbon dioxide
the primary greenhouse gas. T ata Motors opting for wind energy effectively reduces the demand
for electricity generated by burning conventional fossil fuels such as coal and fuel oil.
Wind Pow er Dev elopment in Maharashtra: T he estimated wind energy potential of India is20,000
MW and 800-900MW in Maharashtra. T he State Govt. has appointed an agency, Maharashtra
Energy Development Agency (MEDA) to encourage use of non-conventional energy sourcessuch as
wind power. MEDA has identified various sites n Maharashtra, where sufficient wind velocity is
available to develop wind power generating units.
47
Use of Wind Pow er at Tata Motors, Pune: M/s Suzlon Energy Ltd. installed & commissioned 114
Nos. x 350 KW wind turbines & 3 Nos. x 1MW wind turbines at Satara and Supa in Maharashtra. Tata
Motors, Pune has signed a 35.55 MW Power Purchase Agreement (PPA).
In September 2007, the Certified Emission Reductions w ere auctioned through the Chicago
Carbon Exchange (CCX) and purchased by M/s Eco-Securities Capital Ltd., Ireland
It is to be further noted that T ata Motors is working with the steering committee of National Hydrogen
Energy Board, India, to find ways in which India may harness hydrogen potential energy of future.
T otal water consumed during 2007-08 was 6222080 m T otal water withdrawal by source in 2007-08
3
was 605057 m
(P.S. T he above figures are for three manufacturing units of T ata Motors, viz. Jamshedpur, Pune
and Lucknow only)
48
EN 11: Location and size of land ow ned, leased or m anaged in biodiversity rich
habitats
While the facilities of T ata Motors are not in biodiversity rich areas, at Jamshedpur, the Dalma range,
which is a Biodiversity rich area is located at an aerial distance of 10 km from the plant boundary.
At Pune, none of the manufacturing facilities are located near such protected areas. T ata Motors,
however, has taken immense care to develop the residential area adjoining Pimpri Worksinto a "bird
sanctuary".
EN 14: Strategies, current actions and future plans for managing im pacts on biodiversity
T he Ministry of Environment & Forest (MoEF), Government of India, has appointed Gram Vikas
Kendra, Jamshedpur (GVKJ) an NGO supported by T ata Motors, Jamshedpur, as the Regional
Resource Agency (RRA) for National Environmental Awareness Campaigns (NEAC) 2008 for
Jharkhand State for 15th consecutive year. National T heme for the year 2007 was Solid Waste
Management and for the year 2008 is Biodiversity Conservation.
GVKJ has been constantly involved in the dissemination of Environmental AwarenessProgrammes
and creating water Management network by making ponds, check dams and wells in the surrounding
areas of the company.
Strategic initiatives to develop 150 hectares of land for irrigation through water shed
development project in FY 07-08
T ree plantation drive by Gram Vikas Kendra, Jamshedpur. In FY 07-08 165000 trees were
planted
Rain water harvesting pond constructed in 4 villages of Singhbhum (E) district namely
Kanikola, Jaskandih, Patherchakri and Narayanpur
GVKJ has been appointed as Regional Resource Agency for the 15th consecutive year to coordinate the National Environmental Awareness Campaign (NEAC)
A good number of Forest Protection groups formed. to maintain the status quo of biodiversity
49
EN 15: Number of IUCN Red List species and national conservation list species
w ith habitats in areas affected by operations, by level of extinction risk
T here is no impact of activities/ operations on such sensitive areas.
2007-08
Jamshedpur
233.10
Pune
280.26
Lucknow
23.87
2007-08
Jamshedpur
39.78
Use of propane gas in place of Light Diesel Oil (LDO): Besides, propane gas has negligible
sulphur content as against 1.25% in case of existing LDO. T his makes Propane a more
environment friendly fuel compared to LDO due to almost nil SOx emissions. 2 bulletsof 100
Metric T onnes capacities each are under installation phase.
50
Clean Development Mechanism (CDM): T aking opportunity of the CDM mechanism, Tata
Motors Ltd. initiated action for 20.85MW Wind Power Projects installed & commissioned at
Satara and Supa.
Project Information Note (PIN) and Project Design Document (PDD) for 20.85MW Wind
Power Project was prepared with the help of MIT CON and submitted to Ministry of
Environment (MoEF) for Host Country Approval. MoEF, New Delhi has issued Host Country
Approval for the Project. T he Project was validated by M/s BVQI and registered by UNFCCC.
In September 2007, successfully traded the CERs through e-bidding on the Chicago Climate
Exchange.
Plantation of different varieties of trees in factory complex is done to sequester significant
carbon emission
Replacement of conventional energy with cleaner energy alternatives/renewable energy
sources in plant activity and process.
2007-08
280.00
Annual Average
182.66
Annual Average
187.04
2007-08
7.21
Annual Av erage
11.03
Annual Av erage
11.09
2007-08
45.12
51
12.47
Annual Av erage
Respirable Particulate Matter (RPM)
3
Limit : 150 microgram/m
12.83
2007-08
129.09
Annual Av erage
63.88
Annual Av erage
66.06
2007-08
(Load in Metric Tonnes)
45.14
52.74
Total Oil & Grease (TOG)
4.1099
0.95265
13.03
35.81
107.63
176.81
52
EN 23: Significant spills of chemicals, oils, and fuels in term s of total num ber and
total volume
T here were no significant spills of chemicals, oils or fuels in the reporting period. A systematic effort is
underway to quantify and define what could be termed as a significant spill based on the nature of
the hazardous chemical, quantity stored, extent of pipeline network and the age of installation.
53
Hazardous Wastes (Management & Handling) Amendment Rules 2003 to ensure the following
statutory requirements:
Endorsement of the Hazardous Waste quantity sold in authorised buyer's Pass Book as per
the authorized recycling capacity mentioned
Fill up and sign the 6 coloured copies of MANIFEST (Form -9) and send to the concerned as
mentioned in the copies
Hand over the T REM CARD (T ransport Emergency Card) to the T ransporter
54
(e) Minimize CO2 emissions by designing & developing the vehicles for Indian operating
conditions rather than directly adapting the vehicles from other marketse.g. Mumbai City
Fuel Efficiency Drive Cycle.
(f) Use of energy efficient air conditioning system like Scroll compressor, smaller heat
exchangers and high-efficiency condensers, low GWP refrigerants, etc. and reducing
refrigerant leakage and refrigerant recovery system during servicing .
Reducing Ozone Depletion:
CFC-12 having potential for ozone depletion is no longer used as refrigerant in AC system of our
product since 1996, HFC134a is used as a refrigerant
55
EN 27: Products sold that is reclaim able at the end of the products useful
Initiativ es Taken to Reclaim the Products Sold are as under:
(a) Recyclability and Recoverability Regulation at End of Life of vehicle:
a.
b.
EN 28: Incidents of and fines for non-com pliance with all applicable international
declarations / conventions / treaties, and national, sub-national, regional and local
regulations associated w ith environmental issues
T here is no incidence of any fine or non-compliance with respect to any national, sub-national,
regional and local regulations associated with environmental issues.
EN 29: Environm ental Impacts of transporting products and other goods and
m aterials used for the organisations operations and transporting m em bers of
w orkforce
Strict adherence of the norms applied to transport product, materials and employees. Vehicle
condition check, Pollution Under Control (PUC) checks are in place to avoid any significant
environmental
impacts
during
transportation.
Identified
concerned
agencies
(Vendors/suppliers/contractors/transporters) have specific environmental programmes or control
procedures to mitigate the same.
56
7
Social Management Approach and
Performance Indicators
57
MANAGEMENT APPROACH
Employees are the driving force of our organisation. T he permanent employees strength of the
Company as on March 31, 2008 was 23, 230. Recruitments across all levels, extensive training and
skill enhancement activities were carried out especially at the new locations, in line with the
Companys expansion and growth plans. Companys cordial industrial relations were maintained at
all times and the Company entered into three wage settlement with its union. There has been
consistent improvement in productivity across all locations.
T he Company was awarded Indias Best Managed Company for 2007-08 in the automotive sector
by Business T oday based on a study conducted by Ernst and Young.
HR
Strategic Alignment
Pillar
S T R AT E G I C P IL L A RS
Strategy Execution
Pillar
S TR A TE G IC
Leadership / Growth
& Development Pillar
E LEM ENT S
En gage ment,
Perfo rman ce Mg mt.,
Con seque nce M gmt.
Industria l Relations
Attract, Select a nd
Deplo y
AC T IV I TI E S
Vision
DE L I VE RA B L E S
En gagem ent, Superio r
icate
, Reward,
PeCommun
rf orma nce,
Motiva
tion ,
ise
Rete ntioRe
n, cogn
Productive
&
cordial relationship
SY S T E M S
Bu siness
Strategy
F EE D B A C K
Core Valu es
Labour issues are managed by Employee relations department at each manufacturing location,
which forms a part of the human Resources Department. Within a manufacturing unit, there are
58
multiple factories and in each factory there is an officer in charge of safety. T hese officers in turn
identify and train Safety Stewards from amongst the workers. T he structure enables the effective
implementation of Poka-Yoke (mistake proofing).
Manpower planning department looks after recruitment, training and performance management at all
levels. T raining division at every location is in charge of identifying skill gaps and designing and
organising training programmes for both the blue-collared and the white-collared workers.
T he said structure is at every manufacturing location and the Plant Head is in charge for the unit.
Functional Heads function at the corporate level as well and report to the Managing Directoror to the
Executive Director.
Jamshedpur Lucknow
Pune
Uttaranchal
Mumbai
Small Car
Total
144
34
315
166
671
Managerial
1092
398
3199
213
1171
51
6124
Supervisory
1060
100
1461
65
165
20
2871
Operatives
3894
626
8841
27
176
13564
*T he Management team comprises of Executive Grade which represents the senior leadership, the
T M grade which represents Middle Management as well as the various entry points based on
different level of education like graduation, post graduation etc. Operatives refer to workmen who
have requisite technical qualification employed for direct production activities
3.4
Managerial
10.4 %
59
accounts for the liability for gratuity benefits payable in future based on an independent actuarial
valuation.
(ii) Superannuation
T he Company has two superannuation plans, a defined benefit plan and a defined contribution plan.
An eligible employee on April 1, 1996 could elect to be a member of either plan. Employeeswho are
members of the defined benefit superannuation plan are entitled to benefits depending on the years
of service and salary drawn. T he monthly pension benefits after retirement range from 0.75% to 2%
of the annual basic salary for each year of service. T he Company accounts for the liability for
superannuation benefits payable in future under the plan based on an independent actuarial
valuation. With effect from April 1, 2003, this plan was amended and benefits earned by covered
employees have been protected as at March 31, 2003. Employees covered by this plan are
prospectively entitled to benefits computed on a basis that ensures that the annual cost of providing
the pension benefits would not exceed 15% of salary. T he Company maintainsa separate irrevocable
trust for employees covered and entitled to benefits. T he Company contributes up to 15% of the
eligible employees salary to the trust every year. The Company recognizes such contributionsasan
expense when incurred. T he Company has no further obligation beyond this contribution.
(iii) Bhavishya Kalyan Yojana (BKY): BKY is an unfunded defined benefit plan. The benefitsof the
plan accrue to an eligible employee at the time of death or permanent disablement, while in service,
either as a result of an injury or as certified by the Companys Medical Board. T he monthlypayment
to dependents of the deceased / disabled employee under the plan equals 50% of the salarydrawn at
the time of death or accident or a specified amount, whichever is higher. The Company accountsfor
the liability for BKY benefits payable in future based on an independent actuarial valuation.
(iv) Post-retirement Medicare Scheme
Under this scheme, employees get medical benefits subject to certain limits of amount, periodsafter
retirement and types of benefits, depending on their grade and location at the time of retirement.
Employees separated from the Company as part of Early Separation Scheme, on medical groundsor
due to permanent disablement are also covered under the scheme. T he liability for post-retirement
medical scheme is based on an independent actuarial valuation.
(v) Provident Fund
T he eligible employees of the Company are entitled to receive benefits under the provident fund, a
defined contribution plan, in which both employees and the Company make monthly contributionsat a
specified percentage of the covered employees salary (currently 12% of employees salary). T he
contributions as specified under the law are paid to the provident fund and pension fund set up as
irrevocable trust by the Company or to respective Regional Provident Fund Commissioner and the
Central Provident Fund under the State Pension scheme. The Company is generally liable for annual
contributions and any shortfall in the fund assets based on the government specified minimum rates
of return or pension and recognises such contributions and shortfall, if any, as an expense in the year
incurred.
(vi) Compensated absences
T he Company provides for the encashment of leave or leave with pay subject to certain rules. The
employees are entitled to accumulate leave subject to certain limits, for future encashment. T he
liability is provided based on the number of days of unutilised leave at each balance sheet date on the
basis of an independent actuarial valuation.
Some other benefits advanced to the permanent employees are:
Allowances like T ransport allowance, Education allowance, Sanitation allowance, Leave
travel allowance etc
Annual Performance linked Payment
Free Medical facility for family
Company loans & advances
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T ata Motors has internal unions at its manufacturing units at Pune, Jamshedpur and Lucknow, which
enjoy majority with upto 98%-99% membership. These unions form representative bodies of the
workmen and negotiate with the management and settlements signed with these unionsrespectively
cover all permanent workmen present. At Uttarakhand, which is our new manufacturing unit location,
compensation of the operatives is decided on the basis of industry and region parity and in
consultation with Works Committee formed from time to time.
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following paragraphs. T he Company has a robust Medical Scheme which covers complete health
care of employees and their dependent family members.
T ata Motors is committed to take initiatives to combat the spread of HIV/AIDS. T ata Motorsisaware
of the social stigma that accompanies the contraction of HIV / AIDS and thus asa consciousdecision,
the Company does not make any discrimination, right from employment to retirement of employees.
Tata M otor s has also tr eated 8,000 lepr osy patients in last two decades thr ough the Nav Jagr at
M anav Samaj (NJM S) in Jamshedpur, Jhar khand. The ser vices extended have contributed towar ds
the reduction of leprosy pr evalence rate in Jamshedpur down fr om 22/1000 to 2.2/1000.
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Photo: Mr . Jow ahar Ram Paswan, a beneficiar y of the NJMS pr ogr amme and now a full-time volunteer with
NJMS, w ith a patient at the ashr am
Rehabilitation work for leprosy-affected people is carried out by the Nav Jagrat Manav Samaj in
Jamshedpur. 8 ashrams situated around the city of Jamshedpur, which are self-settled coloniesof
people affected by leprosy, are supported with medical and institutional help for making their lives
comfortable and humane. More than 400 children of cured leprosy patients have been helped into
the formal stream of education. Also promoted are savings in banks by these people and adoption of
small business/vocations like rearing of livestock, poultry, cycle-rickshaw, cart and even growing
vegetables and selling them. A temporary hospitalization facility with 28 beds is available for the
treatment of seriously afflicted patients of leprosy. A 30-bedded Old Age Home run by NJMS catersto
the old and destitute.
LA 10: Average hours of training per year per employee by employee category
Average Hours of T raining per year per employee
Executive
49
Managerial
52
Supervisory
41
Operatives
23
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T he process is reviewed periodically for status of successors and for process improvements. In case
a successor is not identified from the Department and T alent Pool, an internal advertisement is
released. If the position cannot be filled internally, a suitable candidate is selected through External
Advertisement.
All employees have the opportunity to advance their careers. T he Company administers career
progression through the PMS system for managerial employees. All employees have the opportunity
of moving to higher levels. T his is based on their personal preparation and desire to move, windows
of opportunity and a fair selection process, as under:
Target Setting
Mid course
correction in
line with
business needs
Rewards, Compensation,
Career planning &
development and overall
system feedback
Performance
based Ratings
and
Normalisation
Annual review
and feedback
Review Process
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Stars
Non Performers
Dese lction
annually
Solid citizens
Locate in ste ady
function, retain and
evaluate potential
Performance
Talent Mg mt
Po tential
High Potential
Counseling, skill
Challenging growth
ma tching,
opportuniti es, career
FTSS
Grooming
planning, mentoring
Apart from regular progression, other methods used for Fast track career progression are depicted
below. T his helps the Company in building a resource for key areas and challenging assignments.
TM / EG
Talent management,
@ Fast track sel ec ti on
Engineer /
Internal officer
trainee schem e
Supervisors
Master craftsman,
Mechatroni cs sc heme
Bargainable
to Sup sc heme
Bargainable
SVCVP scheme, Master
craftsm an, Mec hatronics
scheme
Female
Executive
658
13
Manager ial
5898
226
Super visor y
2730
141
Oper atives
13270
294
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B. HUMAN RIGHTS
T he Ethics team at T ata Motors is in charge of the human rights aspects in the Company. T he
structure of the Ethics Department is given below.
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T ata Motors adheres to the T ata Code of Conduct in its business. Tata Code of Conduct hascovered
all the Human Rights principles proclaimed in Universal Declaration of Human Rights. However, to
strengthen and support internationally proclaimed Human Rights within the businessof the Company,
it was decided to design exclusive policies on various aspects of Human Rights.
T he Policy on Human Rights is as under:
T ata Motors believes in and respects Human Rights as enunciated by the International Labour
Organisation.
T ata Motors is committed to protect the Human Rights of its employees while dealing with them in all
the activities falling under the relationship of Employer and Employee.
Decision to seek employment rests with the individual only, and it is completely voluntary. T ata
Motors does not and will not allow or encourage Compulsory or Forced Labour in any of itsprocesses
and practices.
T ata Motors respects the right of its eligible employees to organise for the purpose of Collective
Bargaining as well as their right to support or oppose the labour union recognised by T ata Motors.
T ata Motors respects the definition of Child Labour as mentioned in the guidelines of International
Labour Organisation. T ata Motors will not engage any person under the age of 18 years(legal age of
employment) for any operations or services (as presented in law) unless it is part of government
approved job training or apprenticeship programme.
T ata Motors honours the right of its employees to choose and decide the extent of their involvement
in Political Activities in their Personal T ime.
T ata Motors expects its Channel Partners and Contractors to adhere to business principlesconsistent
with its own.
Each new joinee receives a copy of the T CoC. Furthermore, Excerpts from the Code isprominently
displayed at all locations and employees are well aware of its components and adhere to it in letter
as well as in spirit.
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In relation to the process of managing the business ethics, it is of much avail to talkabout the Whistle
Blower Policy at T ata Motors. T his policy is an extension of the T ata Code of Conduct. The Whistle
Blowers role is that of a reporting party with reliable information. The Policy also definesclearly the
composition and role of investigators or fact-finders and that of arriving at corrective or remedial
action in each given case. The Policy explicitly mentions pre-requisites to ensure that the identity of
the Whistle Blower is kept confidential. All employees of the Company are eligible to make Protected
Disclosures under the Policy.
For the year 2007-08, 95 of the 115 ethical concerns received were resolved the same year. T he
remaining 20 are being reviewed.
Frequency
Annual
Plant Head
Senior V P/ Direct Repor ts
M onthly
Per iodically
Divisional Level
GM/ Dir ect Repor ts
M onthly
Factory/Department Level
Divisional Head/ Factor y Head/ HR
M onthly
Weekly
Issues not resolv ed in lower levels are appropriately escalated to higher lev els.
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T ata Motors upholds the T ata tradition of not employing children in any of itsCompanies. It isbound
by the statutory legislation (Factories Act, 1948) and proper records are maintained in this regard.
T he Certified Standing Orders of the Company expressly state that the age of an employee at the
time of recruitment should be 18 years or more.
Moreover, the Company is actively involved in improving both the quality and the accessto education
in various regions. Infrastructural support for education helps thousands of children to accessprimary
and secondary education. Eligible poor students especially from tribal families are given financial
assistance. 1800 students through 33 schools and institutions of social and cultural development are
supported through the Shiksha Prasar Kendra, a T ata Motors society. Quality of education is
improved through special training programs for teachers and students. Vocational guidance programs
are organized so as to help the students in career planning.
Easy access and financial support for education helps in preventing children undertaking child labour.
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EM PLOYE ES
BARGAI NABLE
TAL K
TALK
TALK
UNION
RE PRESE NTATI VE
NON BARGAINABLE
TALK
LI STENI NG
POS T
TALK
WRITE
E THI CS
COUNSE LLOR
S UP ERVI SOR / CX
OW NER / DI V HEAD
WRI TE
HOTLI NE
COORDINATI NG
AUTHORITY
HR OFFI CE RS /
M ANAGER
SR V I CE PRES IDENT
C. SOCIETY
T he Company has a Corporate Social Responsibility structure, which involves the top management
as well the employees and is driven by the objective of improving the quality of life of people. The
structure catering to the needs of the society, which the Company treats as the very purpose of its
business and not just another stakeholder, is as under:
Institutionalizing CSR
Donations Committee
Suppor t institutions
thr ough donations on
basis of need and mer it
Jamshed
pur
LOCTIONAL CSR
Pune
Lucknow
Pantnagar
CSR Committee
Review, monitor and guide
the CSR wor k under taken
acr oss all locations
Small Car
Non Plant
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T he Company has constantly strived to mitigate the environment as well associal impactsof itsproducts
and operations. T hrough its various initiatives, the Company has been able to preserve and protect the
environment and has also contributed to integrated social development.
T hrough its CSR activities, the Company aims to upgrade the quality of life of the communities
around the Companys areas of operations. Besides, T ata Motors also encourages employees to
devote time to underprivileged sections through Company projects and non-governmental
organisations to share skills and expertise and assist the needy. T his is in line with the Companys
broader goal of practising and promoting self sustaining processes and welfare activitiesfor social
and economic development and environmental protection. In a structured approach, the Companys
CSR Committee guides and reviews the CSR activities. In all its CSR initiatives, the Company
recognises and respects diverse community needs by undertaking specific and need-based initiatives
across locations, while deploying global standards and policies.
A summary of the impact created by several community development initiativesin the year 2007-08 is
detailed in the Annual CSR Report, which can be viewed at the Companys website at
http://www.tatamotors.com/our_world/we_care.php
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All complaints are addressed by the Ethics Counsellor Process, detailed earlier.
D. PRODUCT RESPONSIBILITY
PR 1: Custom er Health and Safety
T ata Motors has been putting in a lot of effort to improve the safety (active and passive). T he
Company always meets all the safety regulations of concerned markets and goes beyond the safety
regulations to provide better safety products example being ACE has been designed to meet more
stringent crash safety norms that are not applicable to that class of products. T here has been a
continuous upgradation of the product safety with new technologies being brought in Tata Motorsis
the first Indian manufacturer to develop and introduce airbags in our vehicles. T he Company isstill
the only manufacturer in this country to have a crash test facility.
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Engineering Research Centre (Our Research and Development Centre) is adequately equipped with
state of the art facilities to address specifically the issues of customer health and safety. It has
facilities like Crash T est facility for safety and the Hemi Anechoic chamber for NVH and engine
emission testing. T hese facilities enable development of products meeting safety and environmental
regulations.
Examples of special features used in our products for preserving customer health and safety include
Anti-skid braking systems; Air Bags; Ergonomically designed seating systems with lumbar support;
Euro III complaint engines etc; Non-Chloro Fluro Carbons based vehicle air conditioners.
T ata Motors obtains test certificates for vehicle worthiness and other safety related issues like
emission, brakes, noise etc. before the product is marketed through government authorised agencies.
T ata Motors also obtain Homologation certificates for export markets from authorized test agencies.
Labelling Identification of parts that need to be labelled as per Annex II of EEC directives2000/53/EC
amended by 2002/525/EC. T his directive bans the use of hazardous heavy metals Lead, HexChromium, Mercury and Cadmium.
T he Company issues certificate of compliance to the above directives based on the declarations
obtained by SQIG from the suppliers.
T ata Motors honours Advertising as a tool for Healthy Competition within the market. T ata Motors
will ensure that the promotion of its products and services is based only on justifiable or proven facts.
T ata Motors shall not make any misleading statements or use any competitive information for unfair
trade practices.
T he Company has embibed the essence of the policy in all its processes pertaining to marketing
communication and no false claims and/or unfair means are used while promoting a product/service.
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