CORPORATE SUSTAINABILITY REPORT · 2018-02-14 · Tata Motors Ltd. Corporate Sustainability Report 2007-08 2 ... Strategies, current actions and ... The Company is the largest company

TATA MOTORS LIMITED

CORPORATE SUSTAINABILITY REPORT

(2007-08)

Tata Motors Ltd. Corporate Sustainability Report 2007-08

2

GRI CONTENT INDEX

Section

Aspect

Indicator

Page #

Statement f rom MD

1.1

8-9

1. Profile

Description of key issues, risks and opportunities

1.2

21-23

Name of the Organisation

2.1

13

Primary brands, products and serv ices

2.2

13

Operational Structure

2.3

13

Location of HQ

2.4

13

Countries with major operations

2.5

14

Nature of ownership and legal f orm

2.6

14

Markets served

2.7

14

Scale of the Organisation

2.8

14

Signif icant changes in size, structure or ownership

2.9

15

2. Organisational Profile

Awards Receiv ed

2.10

15-18

Reporting Period

3.1

20

Recent previous Report

3.2

20

Reporting cycle

3.3

20

Contact persons

3.4

20

Report content

3.5

2-6

Boundary of the report

3.6

23

Limitations of the Report

3.7

23

Basis f or reporting on subsidiaries and associate companies

3.8

23

Data Measurement Techniques

3.9

23

Restatements

3.10

23

Signif icant changes from previous reporting periods

3.11

23

GRI Content Index

3.12

2-6

3. Report Parametres

Policy and current practices for seeking external assurance

3.13

23


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Governance structure and Board composition

4.1

25-26

Non-executive status of the chair

4.2

25-26

Independent and/or non-executiv e members

4.3

25-26

Mechanism for shareholders and employ ees to provide recommendations to the highest body

4.4

27-28

Linkage between compensation and perf ormance of the Board

4.5

28-29

Process to av oid conf licts of interest

4.6

29

Process to determine expertise of Board members

4.7

29

Statements and application of mission, v alues and code of conduct

4.8

10-11 & 29-30

Ov erseeing of risks and opportunities by gov ernance bodies

4.9

27

Ev aluating the perf ormance of highest gov erning body

4.10

30

Approach to risk management in operational planning

4.11

30-31

Charters, initiativ es and principles that the organization subscribes to

4.12

32

Membership in associations and national/international organizations

4.13

32

Stakeholder engagement

4.14

32

Identif ication and selection of stakeholders

4.15

21

4. Governance, Commitments and Engagement

Approach to stakeholder engagement

4.16

32

Economic perf ormance

EC1

36-40

Signif icant financial assistance received f rom the government

EC4

40

Range of ratios of standard entry lev el wage compared to local minimum wage at signif icant locations of operation

EC5

41

Policy , practices and proportion of spending on locally-based suppliers

EC6

41

Procedure f or local hiring

EC7

41

5, Economic Performance Indicators

Indirect economic impacts

EC9

41-42


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Materials used

EN1

45

Recy cled input materials

EN2

45-46

Direct energy consumption

EN3

46

Indirect Energy Consumption

EN4

46

Energy sav ed

EN5

46-47

Initiativ es to prov ide energy -ef f icient products and services

EN6

47-48

Initiativ es to reduce indirect energy consumptions

EN7

47-48

Total water use

EN8

48

Water sources significantly af f ected

EN9

48

Total recy cling and reuse of water

EN10

48

Location and size of land owned, leased or managed in biodiv ersity rich habitats

EN11

48

Impacts of activ ities, products and serv ices on biodiv ersity

EN12

48

Habitats protected or restored

EN13

49

Strategies, current actions and plans for managing impacts on bio-div ersity

EN14

49

Number of IUCN red list species and national conserv ation list species with habitats in areas affected by operations

EN15

49

Total direct Greenhouse Gas emissions

EN16

50

Total indirect Greenhouse Gas emissions

EN17

50

Initiativ es to reduce Greenhouse Gas emissions

EN18

50

Emissions of ozone-depleting substances

EN19

51

NO, SO and other signif icant air emissions

EN20

51

Total water discharge

EN21

52

Total waste by ty pe and disposal method

EN22

52-53

Total number and v olume of signif icant spills

EN23

53

Weight of waste deemed hazardous

EN24

53

Initiativ es to mitigate env ironmental impacts of products and serv ices

EN26

54-55

Packaging materials that are reclaimed

EN27

55

6. Environmental Performance Indicators

Fines and sanctions f or non-compliance with environmental laws

EN28

56


5

Environmental impacts of transporting organisation’s products

EN29

56

Environmental protection expenditure and inv estments

EN30

56

Total workf orce

LA1

59

Total rate of employ ee turnover

LA2

59

Percentage of employ ees covered by collective bargaining

LA3

59-60

Percentage of employ ees covered by collective bargaining agreement

LA4

60

Minimum notice period(s) regarding operational changes, including whether it is specified in collective agreements

LA5

60

Workf orce represented in joint management-worker health and saf ety committees

LA6

61

Rates of injury and work-related f atalities

LA7

61

Education, training and risk control programmes to assist workforce, their f amilies and community members regarding serious diseases

LA8

61-63

Health and saf ety topics covered in f ormal agreements with trade unions

LA9

63

Av erage hours of training per y ear per employ ee by employ ee category

LA10

63

Programmes f or skill management and managing career endings

LA11

63-64

Employ ees receiv ing regular perf ormance and career development rev iews

LA12

63-64

Breakdown of employees by category and gender

LA13

65

6. Social Performance Indicators

Ratio of basic salary of men to women by employ ee category

LA14

65

Human rights screening f or suppliers and contractors

HR2

66

Employ ee training on policies and procedures regarding aspects of human rights

HR3

66-67

Total number of incidents of discrimination

HR4

67

Managing risk to f reedom of association

HR5

67-68

Ef f orts to eliminate child labour

HR6

68

Ef f orts to eliminate forced and compulsory labour

HR7

68-69


6

Incidents of v iolations concerning rights of indigenous people

HR9

69

Programmes and practices to assess and manage impacts on communities

SO1

70

Business units analysed f or risks related to corruption

SO2

70-71

Employ ees trained in organisation’s anti-corruption policies and procedures

SO3

71

Contributions to political parties

SO6

71

Legal actions f or anti-competitiv e, anti-trust and monopoly practices

SO7

71

Customer health and saf ety

PR1

72

Total number of incidents of non-compliance with regulations concerning health and saf ety impacts of products and serv ices

PR2

72

Product and serv ice labeling

PR3& 4

72-73

Adherence to Regulations regarding Marketing Communications

PR6

73

Complaints regarding breaches of consumer priv acy

PR8

73

GRI Application Level

G3 Management

Approach Disclosures

G3 Profi le Disclosures

G3 Performance

Indicators

1.1 to 4.15 included in the Report

Beginning of each section

Reported on 67 performance indicators

A

SE L F DEC L ARED


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1

Strategy and Analysis


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Ladies and Gentlemen, I am delighted to make public Tata Motor’s Sustainabil i ty Report which provides a balanced and reasonable presentation of the Company’s economic, social and environmental performance.

The year 2007-08 was a historic year for Tata Motors, marked with two significant events- the unveil ing of Tata Nano - the world’s least expensive car, and the signing of the definitive agreement with Ford Motor Co. for the purchase of Jaguar and Land Rover, which has since been completed on June 2, 2008. Besides this, the Company achieved its highest ever sales of 585,649 vehicles to remain India’s largest automobile company by turnover.

While the Company achieved new heights in the worldwide automobile industry, the overall economic environment threw many challenges during the year. The moderation in economic growth in the Indian economy impacted demand to some extent. The Company’s margins were under pressure due to rising interest rates, constraints in availabil i ty of vehicle financing, and an unprecedented increase in raw material prices.

Notwithstanding al l these challenges, the Company continued to strengthen its social development, environmental management and bio-diversity conservation programmes, in line with the Tata Group’s commitment of improving the quality of l i fe of the community i t serves. The Company’s heritage of returning to the society what i t earns evokes trust among the consumers and other stakeholders. Tata Motors has been continuously launching environment friendly products in the markets by using the latest technologies available. While a number of models are already available with the LPG and CNG technologies, the Company is also actively pursuing electric vehicles programmes. Further, the Company is committed to meet al l emission norms in i ts products that are enforced from time to time in India and the international markets where it operates. This is evident from the fact that the small car Nano, which is expected to be launched in the near future, has also been designed to meet BS3 emission standards despite the sti ff cost targets of the project.

Al l the manufacturing facil i ties of Tata Motors are certi fied to meet ISO: 14001 Environment Management System (EMS) standards. The manufacturing plants have reduced power and water consumption per unit of vehicle by pursuing various energy and water conservation initiatives. Rain water harvesting continues to be a focussed activity at the manufacturing plants and the Company continues to successful ly run its Rain Water Harvesting project in Jamshedpur manufacturing unit. The manufacturing unit at Pune, Maharashtra has consumed around 50 mil l ion units of wind energy annually since 2001 as part of the Clean Development Mechanism of the United Nations.


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The Company has well-defined thrust areas for i ts community development initiatives which are l inked to national and international goals and standards, including the Human Rights Charter, Bharat Nirman Programme and the Mil lennium 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 was supposed to come up. As part of the women empowerment programme, over a thousand women were trained in sewing, manufacturing food products and beautician courses.

The Company’s 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. Tata Motors is also the only Indian automobile company that has earned the distinction of “Notable COP” for the third consecutive year in 2006-07.

Tata 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.

Your’s truly,

Ravi Kant


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The vision, mission and core values for the two business units of Tata Motors, Passenger Car and Commercial Vehicle are given below:


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12

2

Organisational Profile


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Name of the Organisation Tata Motors Limited, the leading automotive vehicle manufacturing company in India in terms of revenues and one of the largest private sector companies in India in terms of revenues and assets. The Company is the largest company in terms of revenues in the Tata Group, which is one of the leading business groups in India.

Primary brands, products and serv ices

The wide array of commercial vehicles from Tata Motors is designed to take care of almost every business needs, big and small. From rigid trucks to tractor trai lers, from l ight commercial vehicles to special ised defence carriers, from luxury buses to compact city carriers, we have it al l . Commercial Vehicle Business Unit (CVBU) manufactures and markets commercial vehicles ranging 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 uti li ty Vehicles l ike Sumo and Safari. Tata 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, Tata Authorised Service Stations, Tata Authorised Service Centres and spare parts distributors.

Operational structure of the organization, including main div isions, operating companies, subsidiaries, and joint v entures

Tata Motors is a ful ly integrated automobile company. Today, i t is the only automobile manufacturer to offer the entire range of commercial vehicles for transportation of goods and passengers and also


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passenger cars in India through its two business unit viz. Commercial Vehicle Business Unit (CVBU) and Passenger Car Business Unit (PCBU). Over the years, Tata Motors has made substantial investments in building subsidiary and associate companies that add value, faci l i tate and support i ts diverse range of business activities: Telco Construction Equipment Co. Ltd. (Telcon), Tata Technologies Ltd. (TTL), HV Axles Ltd. (HVAL), HV Transmissions Ltd. (HVTL), TAL Manufacturing Solutions Ltd. (TAL), Tata Marcopolo Motors Limited (TMML), Tata Motors (SA) Proprietary Limited (TMSA), Tata Motors (Thailand) Limited (TMTL), Tata Motors European Technical Centre (TMETC), Tata Motors Finance Limited (TMFL), Tata Motors Insurance Broking and Advisory Services Limited (TMIBASL), Sheba Properties Ltd., Tata Daewoo Commercial Vehicle Company Ltd (TDCV), TML Distribution Company (TDCL), Automobile Corporation of Goa Limited (ACGL), Fiat India Automobiles Private Limited (FIAPL), Tata Cummins Ltd. (TCL), Tata AutoComp Systems Ltd. (TACO), Tata Precision Industries Pte Ltd., Hispano Carrocera S.A. and Nita Company Ltd.,

Location of organization’s headquarters

Tata Motors Limited, Bombay House, 24 Homi Modi Street, Mumbai 400 001, India Phone – 91 22 56658282

Countries where the organization operates, and

Names of countries w ith major operations We have subsidiary/associate companies outside of India as under:

• Tata Daewoo Commercial Vehicle Co. Ltd., Korea • Nita Company Limited, Bangladesh • Tata Precision Industries Pte. Ltd., Singapore • Tata Technologies Limited, USA/UK • Tata Motors European Technical Centre, UK • Tata Motors (SA) Proprietary Limited, South Africa • Tata Motors (Thailand) Limited, Thailand • Hispano Carrocera S.A., Spain

In addition to the above, we also have a l iaison office in Dubai which caters to promoting our international business for the Middle East and Africa region.

Nature of ownership and legal form Tata Motors Limited is a public l imited company l isted on 2 stock exchanges (Bombay Stock Exchange and National Stock Exchange of India Limited) in India. Company’s Depositary Receipt Programme is l isted on the New York Stock Exchange.

Markets serv ed Tata Motors has major operations in India with sales and marketing operations in more than 70 countries. The scope of this report though, includes only Indian operations.


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More detai ls are available at Tata Motors website http://www.tatamotors.com

Scale of the reporting organization: Key elements depicting the scale of the organisation in 2007-08 is given in the table below:

Number of permanent employees as on March 31, 2008 23,230 Net sales f or FY 2007-08

Rs. 330.94 billion

Volumes of products sold

585,649

Total net assets as on March 31 ‘08 Rs. 150.96 billion

Gross debt

Rs. 62.81 billion

Share Capital

Rs. 3.86 billion

Largest Shareholder

Tata Sons Ltd. with 21.92% to paid-up capital

Shareholding

The Company is a widely held, l isted company (including on the New York Stock Exchange), with approximately 292,090 shareholders. The Company’s international offerings of Foreign Currency Convertible Bonds are l isted on the Luxembourg/Singapore Stock Exchanges. The shareholding pattern as on March 31, 2008 for the Company is given below:

Category

No. of shares

% of holding

Promoters 128819405 33.42 NRIs, Foreign Companies & ADRs 79068379 20.51 Gov ernment Companies, Financial Institutions, Banks and Insurance Companies

57079243 14.81

Mutual Funds & Unit Trust of India 10160944 2.63 Foreign Institutional Inv estors 65388543 16.96 Others 44987440 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.


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Aw ards receiv ed in the reporting period Business Related:

Auto Monitor Commercial Vehicle Manufacturer of the Year

• Tata Motors has received the Auto Monitor Commercial Vehicle Manufacturer of the Year award for the year 2007. The Auto Monitor awards are given to honor the best in the Indian automotive industry for their contribution to the sector in the calendar year 2007. The seven-member jury that comprised of senior people from the industry and Auto Monitor editorial team adjudicated the nominations across 10 categories and decided on the winners.

Tata Motors among India’s Most Trusted Brand in cars

• Tata Motors has been chosen as one of India’s Most Trusted Brand in cars for the second consecutive year, in a Readers Digest/AC Neilsen consumer survey. Tata Motors received the Readers Digest Trusted Brands Gold Award based on feedback from over 7000 respondents.

Tata Motors receiv es the Global Game Changer Aw ard

A special award at the Innovation for India Awards 2008 • Tata Motors has received the Global Game Changer Award at the 'Innovation for India

Awards 2008', organised by the Marico Innovation Foundation. This special award salutes the company's passion and zeal behind the creation of the Nano. The awards recognise great innovations in India that have a great idea coupled with a unique insight, and have positively impacted l ives. This year, the foundation received 206 entries. Mr Ravi Kant, Managing Director, accepted the award from Mr Harsh Mariwala, Chairman and Managing Director, Marico and Dr Mashelkar, Chairman of the Marico Innovation Foundation, on March 19, 2008.

Tata Motors receives Uptime Champion Aw ard 2007

• Tata Motors has received the Uptime Champion Award 2007 in the 'General Industry' category. The award by Emerson Network Power and Express Computer is given to an organisation that is working to improve overall rel iabi l i ty of i ts IT (Information Technology) infrastructure and has implemented a solution that guarantees optimal infrastructure uptime 24x7. Mr C P Lohiya, Dy. General Manager (Information Technology), Tata Motors, accepted the award on behalf of the company.

Tata Motors bags the “Best Company Aw ard”

• Tata Motors, Pune was declared as the “Best Company” at 20th National Work Skills & 2nd CII World Skil ls Competitions conducted jointly by CII and the Directorate General of Employment and Training (DGET), Ministry of Labour, Govt. of India. Tata Motors secured fourteen rankings in seven trades

Passenger Car Business Unit bags Handa Golden Key Aw ard

• The Passenger Car Business Unit of Tata Motors bagged the Handa Golden Key Award 2007 for the 'Best Value Engineering Organisation'. The award is conferred by the Indian National Value Engineering Society (INVEST).

TRAKIT bags silv er aw ard for 'Excellence in Design'

• TRAKIT won the si lver award for 'Excellence in Design' in the 'Electronics' category at the 20th International Appliance Design Excellence in Design Awards 2007, USA. TRAKIT is a


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vehicle tracking telematic device developed by Tata Motors for Indian truck drivers and fleet owners.

Process Related:

Tata Motors bags National Aw ard for Excellence in Cost Management • Tata Motors has won the National Award for Excellence in Cost Management for the year

2006, conferred by the Institute of Cost and Works Accountants of India (ICWAI). Tata Motors bagged the first prize in the ''Manufacturing'' category in the private sector.

'NDTV Profit' Business Leadership Aw ard for Tata Motors

• Tata Motors has received the coveted ''NDTV Profit'' Business Leadership Award in the category of four-wheelers for the year 2007. Mr. Rajiv Dube, President -Passenger Car Business Unit, received the award on behalf of the company.

Tata Motors - CVBU bags 'Highest Delta Aw ard' for Business Excellence

• Tata Motors CVBU has crossed the score band of 551-650 in the Tata Business Excellence Model 2007 assessment and has moved into the ''Industry Leader'' (651-750 score) band.

• CVBU has won the ''Highest Delta Award'' in the 600+ point category. This award is given to an organisation that displays the highest jump in i ts scores from the previous year.

Tata Motors aw arded SAP Customer Excellence Aw ard

• Tata Motors has been awarded the SAP ACE Customer Excellence Award for the year 2007 in the "Best Project in the Automotive Vertical (Large Enterprise)" category. The award was conferred on Tata Motors for the exceptional results in business transformation using the SAP-SRM (Supplier Relationship Management) and SAP Warehouse Management solutions.

Aggregates Business of CVBU bags Best Supplier Aw ard from ECEL

• The Aggregates Business of Tata Motors' Commercial Vehicle Business Unit has won the 'Best Supplier Award' from Escorts Construction Equipment Ltd (ECEL). This award has been presented to Tata Motors in recognition for supporting ECEL's business growth plans through the supply of high tech aggregates including engines, gear boxes and axles. Mr PVS Prasad, Head- Aggregates Business, Tata Motors accepted the award on behalf of the Company

Golden Peacock Award for Occupational Health & Safety

• Tata Motors Pune - CVBU bagged the Golden Peacock Award for Occupational Health & Safety. The award was received by Mr. A. K. Ghose, DGM (HR, CVBU - Pune) and Mr. V. Gandhi, DGM (Auto, CVBU - Pune)

Tata Motors w ins Best Paper Aw ard at the Asian Netw ork for Quality Congress 2007

• Tata Motors has won the 'Best Paper Award' among 120 papers presented at the Asian Network for Quality (ANQ) Congress 2007. Mr. A. S. Parasharami, DGM (B E S - Pune) received the award for his paper on the 'Application of 3P (Production Preparation Process) concept at Tata Motors'.

Tata Motors Commercial Vehicle Business Unit bagged the First prize in “Excellence in

Suggestion Scheme Contest 2007” • Tata Motors CVBU Pune has bagged the First prize in “Excellence in Suggestion Scheme

Contest 2007” (in group V) from the Indian National Suggestion Schemes' Association (INSSAN). The award is given to organisations who have achieved the highest levels of employee involvement and excellence through Suggestion Scheme.


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Commercial Vehicle Business Unit w ins Raj iv Gandhi National Quality Aw ard for 2007

Tata 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. The Rajiv Gandhi National Quality Award is insti tuted by the Bureau of Indian Standards (BIS), New Delhi and has criteria similar to prestigious international quality awards l ike the Malcolm Baldrige National Quality Award USA, the European Quality Award and the Deming Prize, Japan.

Recognitions: Sumo, Indica among 'Most Trusted Brands' of India

• The Sumo and the Indica have once again been adjudged among the ''Most Trusted Brands'' of India. The annual ''Most Trusted Brands'' survey is conducted among consumers across the country by ''Brand Equity'', the marketing and advertising supplement of ''The Economic T imes''. The Sumo is ranked No.3 (up from No.5 last year), while the Indica retains its No.7 position - both above al l other car brands

Tata Motors India's 5th most v aluable brand

• Tata Motors has been ranked as the 5th most valuable ''company brand'' - the face of the business for al l stakeholders - in India. The study was conducted by The Economic T imes and Brand Finance. The study indicated that Tata Motors is also among the 14 companies in India in terms of i ts abil i ty to sustain earnings into the future with the least risk.

Tata Motors among most reputed Indian firms

• Tata Motors has emerged as one of the most reputed corporates in India according to the Corporate Reputation Index by global consultancy firm, TNS. Tata Motors shares the second spot with Tata Steel and Hindustan Lever

Tata Motors among 10 Most Respected Companies in India

• Tata Motors is among the top 10 Most Respected Companies in India. Ranked at # 8, Tata Motors is the only automobile company in the top 10. The findings are of the Business World 'Most Respected Companies Survey - 2007'.

Tata Motors among Asia's 50 best performing companies

• Business Week has l isted Tata Motors among Asia's 50 best performing companies. The other Indian companies, among the 50 best, are TCS, Tata Steel, HDFC, Hero Honda Motors, Siemens India, Sterl i te Industries and Cipla. Business Week says that these companies have been powered by robust revenue growth, profitabil i ty and shareholder returns.

Indiv idual Aw ards

Mr Kw ang-Ok Chae, President - Tata Daewoo, honoured w ith the 'CEO of Korea' award

• Mr Kwang-Ok Chae, President - Tata Daewoo, was conferred with the ''CEO - Korea Award 2007'', by the Economic Review magazine of South Korea. The 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


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• 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. The patent is for a period of twenty years. This device can save 22% electrical energy consumption and can be used in any gas discharge lamp at home, in shops, malls, hotels offices etc.

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Report Parameters


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Reporting period for information prov ided The information provided in this report is for fiscal year 2007-08 (Apri l to March).

Most recent previous report

Tata Motors GRI Report 2006-2007

Reporting cycle

This is the fourth GRI report from Tata Motors Limited. The reporting cycle for the GRI report is annual.

Contact point for questions regarding the report or its contents

Dr. Sangram Tambe Vice President – Corporate Human Resources Tata Motors Limited, Bombay House Phone – 91 22 66657227 E Mail – [email protected] Website – www.tatamotors.com Mr. M B Paralkar Consultant Advisor – CSR & IR Tata Motors Limited, Pune Phone – 91 20 66132381 E Mail – [email protected] Website – www.tatamotors.com


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Report Scope and Boundary Process for defining report content Tata Motors Limited has prepared this report in l ine with Sustainabil i ty Reporting Guidelines (G3 Guidelines) released in 2006. The report is to be used by the stakeholders of the Company identified as including the fol lowing:

Opportunities and Threats have been identified through a combination of various instituted processes, including the Enterprise Risk Management (ERM) process and interviews with department heads, including vendor development, environment, safety and human resources. These 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. The Golden Quadri lateral road project was 97% complete as on March 31, 2008. The 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 faci l i tate faster transportation of goods and passengers, and would in turn create demand for safer, rel iable and faster vehicles. The Company is poised to benefit from the same as it has a wide range of goods and passenger transportation vehicles ranging from 0.7 Ton load carrier to large haulage tractors (49T) for goods movement, buses and coaches for public transportation and passenger cars and uti l i ty vehicles for personal transportation.


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Car penetration in India: The 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 as compared to a higher penetration level in developed and developing markets for example, Germany 550, France 495, Malaysia 253, South Korea 219, Brazil 96 and Thailand 51 cars per 1000 people. India and China (with a car penetration of 6 per 1,000 people) are perceived as highly attractive markets for 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 mil l ion two wheeler parc and an annual sale of over 7.2 mil l ion two wheelers. The Company believes that the gap between two wheeler prices and 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 Tata 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. India’s manufacturing base wil l benefit from these scale economies and technology/quality improvements. The Company’s 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. The Company is also setting up / exploring manufacturing footprint overseas that would combine these advantages with local operations and sourcing in these markets. Growing consumer culture: The demand for a better l i festyle has enhanced consumption levels and rapid growth in several areas l ike retai l chains, cellular phones and cable and satellite television. The Company, with i ts wide portfol io is expected to benefit from improvement in l i festyle and higher aspiration levels in passenger cars and potential growth in freight movement. Threats Credit unavailability: Further tightening of l iquidity position and reduction in exposure to vehicle financing by banks/NBFCs would have an adverse impact on the automotive industry. Though in-house vehicle financing has been strengthened by the Company, i t would be a challenge for the Company to ful ly offset the decrease in credit availabil i ty 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: The 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 i tems l ike steel, non-ferrous and precious metals and rubber witnessed an upward movement, which was partial ly offset by the Company’s cost reduction initiatives. The price of steel, in particular, has increased by 30% – 35% in the last 24 months and is expected to further increase significantly in the coming year. Whilst the Company continues to 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 Company’s 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 Company’s business. WTO,


23

Free Trade 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. The global automotive manufacturers present in India have been expanding their product portfolio and enhancing their production capacities. To 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: The domestic passenger vehicle demand could be impacted by the growth of road and rai l 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 This report includes only Indian manufacturing Operations of Tata Motors. The sales and revenue figures include international business. The products and services of Commercial Vehicle and Passenger Car Business Units (CVBU and PCBU) including Trucks, Buses, Multi-Uti l i ty Vehicles, Sports Uti l i ty 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 Tata Motors would not be reporting on al l indicators as the data compilation for some of the indicators is stil l 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 year’s GRI report, a summary of the financial performance of Tata Motor’s primary subsidiary and associate companies. Information reported for the subsidiaries and associate companies is sourced from our Annual Report 2007-08.

Data measurement techniques Tata Motors has implemented SAP 4.6c system for i ts data operations rel iabi l i ty and has integrated its operations under i t. The SAP Modules implemented include Finance (FI), Production Planning (PP), Material Management (MM), Sales and Distribution (SD) Quality Management (QM). Tata Motors also uses Indian GAAP for reporting its financial performance (from which most of the Economic performance indicators have been addressed). Most financial detai ls 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/TS16949.

Explanation of the effect of any restatement There are no re-statements from Tata Motors

Significant changes Disclosure on Management processes for the performance indicators is being included in the report.


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Seeking External Assurance This report is not subjected to external assurance. The data reported under financial and environment aspects are, however, subjected to procedural external audit as per national standards.

4

Governance, Commitments and

Engagement


25

Governance Structure and Board Composition

As part of the Tata group, the Company’s philosophy on Corporate Governance is founded upon a rich legacy of fair, ethical and transparent governance practices, many of which were in place even before they were mandated by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. The Corporate Governance philosophy has been further strengthened with the implementation, a few years ago, by the Company of the Tata Business Excellence Model, the Tata Code of Conduct applicable to the Company, i ts subsidiaries and Directors and employees. The Company is in ful l compliance with the requirements of Corporate Governance under Clause 49 of the Listing Agreement with the Indian Stock Exchanges. The Company’s Depositary Programme being l isted on the New York Stock Exchange, the Company also complies with US regulations as applicable to Foreign Private Issuers (non-US l isted companies) which cast upon the Board of Directors and the Audit Committee, onerous responsibi l i ties to improve the Company’s operating efficiencies. Risk management and internal control functions have been geared up to meet the progressive governance standards. The Board, being elected by the shareholders, is their representative and a bridge between them and the executive management. Since shareholders are residual claimants, the value creation and sustainabil i ty of al l the other stakeholders viz. customers, creditors, employees, vendors, community and the Government (of countries in which the Company operates) are of paramount significance to the Company and its shareholders. The Board would therefore have a fiduciary relationship and a corresponding duty to al l i ts stakeholders to ensure that their rights are protected. Through the Governance mechanism in the Company, the Board alongwith i ts Committees endeavours to strike the right balance with i ts various stakeholders. The Board of Directors presently comprises of 10 Directors, out of which 8 are Non-Executive Directors. The Company has a Non-Executive Chairman and the 4 Independent Directors comprise more than one third of the total strength of the Board. The Company has taken initiatives to comply with the recent amendment of Clause 49 of the Listing Agreement pertaining to composition of directors for induction of independent directors. Board Committees: To focus effectively on the issues and ensure expedient resolution of diverse matters, the Board has constituted a set of Committees with specific terms of reference/scope. The Committees operate as empowered agents of the Board as per their Charter/terms of reference. Targets set by them as agreed with the management are reviewed periodically and mid-course corrections are also carried out. The minutes of the meetings of al l Committees of the Board are placed before the Board for discussions/noting. The Board constituted Committees and the status on independence of these Committees is given in table below:

Name of

Committee

Role

Status on

Independence Audit Committee

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

All 3 Independent Directors


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requirements and US regulations applicable to the Company and is rev iewed f rom time to time. Whilst, the f ull Charter is av ailable on Company ’s website www.tatamotors.com

Remuneration Committee

The Remuneration Committee of the Company is empowered to review the remuneration of the Managing Director and the Executiv e Director, retirement benefits to be paid to them under the Retirement Benef it Guidelines approv ed by the Board and deal with matters pertaining to Employ ees’ Stock Option Scheme

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

The Ethics and Compliance Committee was constituted to f ormulate policies relating to the implementation of the Tata Code of Conduct f or Prev ention of Insider Trading (the Code), take on record the monthly reports on dealings in securities by the “Specif ied Persons” and decide penal action in respect of v iolations of the applicable regulations/the Code

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 structure of 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

The Nominations Committee of the Board was constituted with the objective of identif y ing independent directors to be inducted on the Board and to take steps to ref resh the constitution of the Board f rom time to time

4 Non-Executiv e Directors

Donations Committee and Corporate social Responsibility Committee

The Donations Committee reviews and approves donations to non-gov 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


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The relationship between the Board, the Committees and the senior management functions is i l lustrated below:

Mechanism for shareholders and employees to provide

Recommendation to the Board Shareholders/Investors A monthly shareholders report is sent to the Board members which describes the shareholding pattern and also the performance of Tata Motors stock with respect to the other automotive


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companies and the stock indices. The report also highlights the expectations from various equity analysts and the Company’s performance vis-à-vis the same. The Ethics & Compliance Committee also reviews on a monthly basis the trading in the Company’s shares by the designated employees to 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 indicators of review are the Supplier coverage and the efficiency of the transactions with the Company. The Company also organizes Supplier’s day/Vendor meets/Channel partner meets where suppliers can touch base with the Board members and share their thoughts and inputs. Employees: The Management Committee on a very regular basis reviews the employees’ issues. The 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. The Board is also kept informed of senior level changes in management, status on signing of Union wage agreements, remuneration of senior executives, etc. Customers: The 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 sub-Committees from time to time. This 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.

Linkage betw een executive compensation and Achievement of the organisation's financial and non-financial goals

The annual performance/appraisal of the Whole-time Directors are reviewed by the Remuneration Committee through a structured Balance Scorecard mechanism as agreed to at the beginning of the year and the performance of the individual Whole-time Director is evaluated against the same. The Company pays remuneration by way of salary, perquisites and al lowances (fixed component), incentive remuneration and commission (which are major variable components depending on the performance parameters) to i ts Whole-time directors after a review of their individual performance. Annual increments of each Whole-time Director are decided by the Remuneration Committee within the salary scale approved by the Members and are effective from Apri l 1, annually. The Company has not issued any stock options to i ts senior management/employees. Approval of the shareholders is obtained for payment of remuneration to the Executive and Non-Executive Directors and adequate disclosures on terms of appointment, tenure and remuneration are included in the Explanatory Notes


29

to the Notice of the General Meeting. The Annual Report contains detai ls of the remuneration drawn by the Whole-time Directors. The 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 l imits prescribed under the Companies Act, 1956. Appropriate disclosures are made in the notice of the General Meetings. The Annual Report also contains detai ls of the remuneration paid to the Directors - both Executive and Non-Executive Directors.

Process to avoid conflicts of interest To ensure that no confl ict of interests arise among the highest governing body, transparency in operations and selection and disclosure policies for governance is maintained. The 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. This Code ensures simultaneous release of information through various mediums of disclosure/dissemination in a transparent and fair manner. Information is available 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. This information is also available on the Company’s website. The 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-à-vis other l isted 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; risks associated with the Company’s 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 profi le; production faci l i ties and distribution network; R&D initiatives; intel lectual property; legal proceedings; organisation structure; subsidiaries and affi l iates; operating and financial review and prospects; capital expenditure incurred and sources of financing; detai ls 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 certi fication to the investors and audited consolidated financial statements for the last three years. To ensure that the Company has disclosed relevant, accurate and complete information to i ts investors so as to ensure that the Company’s financial condition and results of operations in al l 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 heads of the larger subsidiary companies.

Selection Criteria for Board members The Directors are selected based on the following criteria: • Business experience • Expertise in the field • Abil i ty to bring in the external perspective • Relation to the Company and Board


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Nomination by Articles of Association, Debenture holders, financial insti tutions, virtue of technical col laboration and financial agreement

Internally Dev eloped Mission, Code of Conduct and Values

Being a global player, Tata Motors has ensured that i ts corporate governance practices are compatible with the international standards. Tata Motors has adopted the Tata Business Excellence Model (TBEM) as a means of driving excellence. In order to track process on long-term strategic goals, a Balanced Score Card methodology is used. This enables the Company to go beyond financial performance to incorporate considerations of environment and society, as well. Tata Code of Conduct Tata Code of Conduct (TCoC) is applicable to al l employees, including the Managing Director and the Executive Directors. (TCoC can be v iewed at our website). The Code is a set of 25 principles, adherence to which ensures ethical conduct both by the employees as well as the Company at large. For internally developed mission statement and core values of Tata Motors, please refer to 1.1

Board-level process for ov erseeing the organisation's identification and management of economic, env ironmental, and social risks and opportunities

The Board takes responsibi li ty 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. The Management implements actions to mitigate residual risks. The Board assures al l stake holders about adequacy of internal control Systems and documents procedures in the Company’s Annual Report. The Management is accountable for the integration of risk management practices into the day to day activities. Lapses are highlighted as findings after risk assessment or audit reviews. The Risk management and internal control model and framework adopted by the Company provides the Board reasonable assurance on the effectiveness and efficiency of the Company’s operations; the safeguarding of the Company’s assets, the Company’s compliance with laws, regulations and supervisory requirements; the sustainabil i ty of the Company’s operations under normal and adverse operating conditions; the rel iabi l i ty of the Company’s reporting and the Company’s responsible behaviour towards al l stakeholders.

Ev aluating the Board’s Performance The 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

Approach to Risk Management in Operational Planning

The Company has a comprehensive system of control, focused on mitigation of risks to ensure achievement of objectives. The control environment comprising of values, ethics, management


31

philosophy, employee competence, etc. supports risk management. The risks are assessed on an ongoing basis and controls are designed to respond to risk throughout the Company. There is a twofold approach to Risk Management: 1. Enterprise Risk Management (ERM) 2. Internal Audit Enterprise Risk Management: The ERM process identifies entity level risks. For the purpose of review, risks are categorized into three categories viz high, moderate and low and are also rated from 1-5 based on impact and frequency. All risks are classified as per processes in the “Enterprise Process Manual”. Certain clusters of risks are treated as priority clusters. The Audit Committee reviews the mitigation action taken against these risks on a periodic basis. Also, other risks which may material ize may also be accorded priority i f they are critical. Pertinent information on risk assessment and control activities is communicated effectively to employees. The l ine management regularly monitors controls. Thus the risk management/internal control practices contribute to the development of robust business operations and promotes/enhances value creation. The Board regularly reviews processes and procedures to ensure the effectiveness of the internal systems of control. Management reports to the Board provide a balanced assessment of significant risks, a balanced assessment of the effectiveness of the system of internal controls in managing those risks and identify significant fai l ings/weaknesses, i ts impact on the Company and actions taken to rectify them. The Company is promoting risk awareness through a structured risk management process. The ownership of these programs vests with operating managers, with Internal Audit playing a facilitators role. However, the primary responsibi l i ty remains with the process owners. The ERM Process has been initiated in the Company as a tool to strengthen the Strategic Planning process. It aims at sustaining desired operational performance and providing a platform for rational al location of capital across Small Business Units. The process maps the Strategic, Operational, Financial & Governance Risks related to the Business strategy as also on account of weaknesses in the internal processes. The agreed risks are logged in the Company’s Risk register and the respective Responsibility Centers are required to determine the risk treatment (Accept/Reduce/Transfer/Eliminate) and work out the mitigation plans accordingly. The outcomes of the Risk Mapping Process were presented to the Management Committee and the Audit Committee for review and direction. The outcomes of ERM process were also reported to the Board on March 31, 2006.The Major risks along with the mitigation actions are planned to be reviewed by the Management Committee and presented to the Audit Committee and the Board on a regular basis. A benchmarking of ERM practices of other local and global companies has been done to ascertain opportunities for improvement. The ERM process is designed to be compliant with SOX and Clause 49 of the Listing Agreement with the Indian Stock Exchanges. Internal Audit: Internal Audit has an annual risk based audit plan. Risk Universe is defined covering all processes of the company. Inherent risk scores are assigned to each process and are reviewed every 5 years. At the start of the year, CIA informally discusses the business imperatives with Senior Executives. These imperatives serve as an important input whilst developing the annual plan. The annual audit plan is prepared to cover a majority of the high & near high risk areas and a considerable number of processes with moderate and low risk scores.


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Audits are conducted by way of Self Assessment Questionnaires or through ful l fledged audits. The Audit Committee reviews audit reports every quarter. Audit Reports are classified as Section A and Section B type reports. The Audit Committee reviews observations and recommendations highlighted in Section A reports as well as critical issues pertaining to Section B reports. The timelines for implementing the recommendations is monitored by way of a robust process, which yields meaningful and actionable reports

Subscribing to externally dev eloped Charters, Principles and Initiativ es Tata Motors is a signatory of the United Nations Global Compact. By adhering to this voluntary initiative, the Company commits i tself to the ten principles that range from Human Rights protection, Labour Standards, Environmental Protection and Anti-Corruption. The Company has been submitting its “Communication on Progress” (COP) to the Global Compact and is in fact the only Indian automobile company to have been appreciated as “Notable COP” for consecutive years. Tata Motors is a member of CII (Conference of Indian Industries), BCCI (Bombay Chambers of Commerce and Industries) and ASSOCHAM (Association of Chambers of Commerce of India).

Stakeholder Engagement Approach

Identify their concerns and

Issues

Address concerns and issues in

Strategy Planning Process

Steering Committee Review and

corrective action

Prioritize concerns and

issues

Set Goa ls , targets

Report and communicate to al l stakeholders

(Ann ual Report, Cha irman & ED le tters/GRI & Corpo rate Gove rna nce reports, etc)

Engagement of Stakeholders:

Meetings, feedbacks, Interactions, etc

Learning & sharing across and improve

Stra te gic Di re cti on

Ba lanced Sco recard &

Init iat ive s

Stakeholder engagement and input is central to the entire strategic planning and deployment exercise. There are several mechanisms (as detailed in Annexure) through which the Company engages its stakeholders and identifies the key stakeholder concerns and issues. The organizational challenges and issues identified are considered in the strategic planning process to determine strategic objectives. The vision, mission and values guide the strategic planning process. This 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. The strategic objectives are deployed using the balanced scorecards, which balance the needs of all stakeholders. An indication of how various objectives are al igned with stakeholder concerns has been provided in Annexure I (Stakeholder Engagement Chart).


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5

Economic Management Approach

and Performance Indicators


34

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 l iquidity position, non-availabil i ty of vehicle finance and firming up of interest rates would affect vehicle demand, which could impact the Company’s revenues and profits. Exchange rates: The Company’s 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 volati l i ty 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. This would have an adverse impact on commercial vehicle demand. Railways: Railways’ renewed focus on cement and steel movement and container movement and planned nationwide rai l freight corridor connecting major cities could impact the demand of commercial vehicles for goods transportation. However, i t 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: The commercial vehicle industry due to i ts strong l inkages with the economy would be impacted by slowdown in economic growth. The Company has strengthened its less cyclical businesses like passenger carriers, small and l ight trucks and passenger cars as well as i ts spare parts and other service offerings to counter moderation in demand. The increasing trend of offering price discounts in the market could also affect the Company’s 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 Company’s products in overseas markets. Manufacturing: The Company manufactures its products at multiple locations and its operations could be affected by disruption in i ts supply chain due to any natural calamities and work stoppages at i ts suppliers’ end due to load shedding, labour problems, etc. New Competition: Intensity of competition has increased in almost al l 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.


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New projects: The Company is undertaking a variety of new projects ranging from the launch of a small car to the development of a new truck model. These projects are in various stages of execution. Though 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 acceptabil i ty 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 : The Company has in place adequate system of internal control. It has documented procedures covering al l financial and operating functions. These 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 regulations and for ensuring reliabi l i ty of financial reporting. The Company has continued its efforts to al ign al l i ts processes and controls with global best practices in these areas as well. The 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 features of the internal control systems are:

• Corporate policies on accounting and major processes; • Well-defined processes for formulating and reviewing annual and long term business plans; • Preparation and monitoring of annual budgets for al l operating and service functions; • State-of-the-art ERP, Supplier Relations Management and Customer Relations Management,

connect i ts different locations, dealers and vendors for efficient and seamless information exchange;

• An on-going program for reinforcement of the Tata Code of Conduct. The Code covers integrity of financial reporting, ethical conduct, regulatory compliance, confl ict of interests review and reporting of concerns. All employees of the Company are regularly exposed to communications under this program;

• Bi-monthly meeting of the management committee at apex level to review operations and plans in key business areas;

• A well established multidiscipl inary Internal Audit team, which reviews and reports to management and the Audit Committee about the compliance with internal controls and the efficiency and effectiveness of operations and the key process risks;

• Audit Committee of the Board of Directors, comprising independent directors, which is functional since August 1988, regularly reviews the audit plans, significant audit findings, adequacy of internal controls, compliance with Accounting Standards as well as reasons for changes in accounting policies and practices, i f any;

• A comprehensive information security policy and continuous upgrades to IT system; • Documenting major business processes and testing thereof including financial closing,

computer controls and entity level controls as part of compliance with Sarbanes-Oxley Act; • Anti-fraud programme.

The Board takes responsibi li ty 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 al igned to the Company’s objectives. This is also faci li tated by internal audit. The 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.


36

EC 1: Direct Econom ic Value Generated Distribution of Revenue (INR in crores – 1 crore=10millions)

Sources of Rev enue (INR in crores – 1 crore=10millions)


37

Summarized Balance Sheet (Rupees in Mil l ions) What the Company OWNED 1. Net Fixed Assets 104522.7 2. Investments 49102.7 3. Net Current Assets (2728.5) 4. Miscellaneous Expenditure 60.5 5. Total Assets (NET) 150957.4 What the Company owed 1. Loans 62805.2 2. Net Worth 78395 Represented by: Share Capital 3855.4 Reserves 74539.6 3. Deferred Tax Liabil i ty (NET) 9757.2 4. Total Funds Employed 150957.4 Summarized Profit and Loss Account (Rupees crores) 1. Income Sale of Products and other Income 330939.3 Less: Excise Duty 43631.1 287308.2 Dividend and other income 4831.8 292140.0 2. Expenditure


38

Raw materials / components, Manufacturing and Other Expenses 240939.3 Employee Cost 15445.7 Product Development Expenditure 643.5 Depreciation 6523.1 Interest 2823.7 Total Expenditure 266375.3 Profit Before Tax 25764.7 Profit After Tax 20289.2 Balance Brought Forward From Previous Year 10138.3 30427.5 Appropriations (i) Proposed Dividends 5784.3 (i i) Tax on Proposed Dividends 812.5 (i i i ) General Reserve 10000.0 (iv) Balance carried to Balance Sheet 13830.7 30427.5 Donations Total Donations disbursed during 2007-08 to various non-governmental and non-profit institutions, based upon merit and need Rs. 12.8 mil l ions. Community Inv estments Tata Motors invests in various CSR projects that target improvement of quality of life of people. The thrust areas for these projects include - Education, Health, Employabil i ty and Environment. The Company views the expenditure in such projects as an investment and not a cost. In the year 2007-08, investments in social and community projects amounted to Rs. 12.5 mil l ions. This 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 Company’s subsidiaries, on an aggregate basis, have significantly improved on their financial performance and profitabil i ty. A brief profi le of the subsidiary companies and their main financial parameters for FY 2007-08, are given below: Tata Daewoo Commercial Vehicle Company Limited (TDCV), 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, TDCV recorded a turnover of Rs. 28650.2 mil l ions, which is 45% higher to the previous year. PAT increased by 78% and stood at Rs. 1531.1 mil lions as against Rs. 974.6 mil l ions in 2006-07. Telco Construction Equipment Company Limited (Telcon) is engaged in the business of manufacturing and sale of construction equipment and al lied services in which the Company has 60%


39

holding and Hitachi Construction Machinery Company Limited, Japan, holds 40%. During the year, the Company divested 20% of i ts stake to Hitachi, thus reducing its stake from 80% to the present 60%. With the increase in economic activity especial ly in the infrastructure sector, Telcon recorded its best performance to date having sold 7,698 machines with a Profit After Tax of Rs. 3240 mil lions. Tata Marcopolo Motors Limited (TMML) is engaged in the business of manufacture and sale of fully buil t 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. TMML recorded a net turnover of Rs. 65.7 mil lions and loss after tax is Rs. 38.3 mil l ions. Tata Motors (SA) Proprietary Limited (TMSA) 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. TMSA has been formed for manufacturing and assembly operations of the Company’s Light and Heavy commercial vehicles and Passenger Cars in South Africa. TMSA has yet to start i ts operations. Tata Motors (Thailand) Limited is a 70:30 joint venture between the Company and Thonburi Automotive Assembly Plant Co., for manufacture, assembly and marketing pick-up trucks. The joint venture enables the Company to address the ASEAN and Thailand markets, the latter being the second largest pick-up market in the world after the USA. While TMTL has begun setting up operations in 2007-08, the manufacturing of vehicles began only during March 08’ with revenues from sales and other income at Rs. 9 mill ions. Tata 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 mil l ions, with Profit Before Tax of Rs. 502.6 mil l ions exceeding the 2006-07 figures by 150%. Tata Technologies Limited (TTL), along with i ts subsidiaries is in the business of providing information technology services. Tata Technologies Pte. Ltd. (TTPL) which became a subsidiary of TTL acquired Tata Technologies, USA, (TT US) in March 2006. TTUS 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 i ts l ines of business in Germany. TTL incorporated a wholly owned subsidiary in Thailand named Tata Technologies (Thailand) Limited which would be TTL’s second global delivery to take advantage of the growth in the area. TTL has 13 subsidiary companies as on March 31, 2008. The Company holds 81.71% of TTL’s share capital. The year marked an important milestone in the growth history of the Company with consolidated revenues crossing the Rs. 10,000 millions threshold. TAL Manufacturing Solutions Limited (TAL) 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. TAL has also signed sales and service agreement with HELLER, Germany, a globally renowned manufacturer of high end machining centres. TAL recorded a turnover of Rs. 2205.8 mill ions and a Profit After Tax of Rs. 120.2 millions. HV Transmissions Limited (HVTL) 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 facil i ties and infrastructure based at Jamshedpur. With the rise in demand for Medium and Heavy commercial vehicle over the years, major improvement


40

initiatives were undertaken at HVTL and HVAL. Both HVTL and HVAL manufactured prototypes of gear boxes and axles for application in the Company’s new products. HVTL recorded a 9.39% increase in i ts turnover of Rs. 1919.8mil l ions in 2007-08, PAT being Rs. 474.4 mil l ions. HVAL recorded a turnover of Rs. 2032.4 mil l ions and a PAT of Rs. 634.1 mil l ions. TML Distribution Company Limited (TDCL) 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 Company’s products throughout the country. TDCL is yet to start operations. Sheba Properties Limited is a 100% owned Investment Company, whose income was Rs. 213.7 mil l ions and Profit After Tax was Rs. 162.2 mil l ions. Concorde Motors (India) Limited (CMIL), a 100% subsidiary of the Company engaged in sales and service of Tata and Fiat passenger cars recorded a turnover of Rs.6252 mil l ions with PAT of Rs. 53.3 mil l ions. Tata Motors Insurance Broking and Advisory Services Limited (TMIBSAL) (formerly known as Tata Motors Insurance Services Limited), a 100% subsidiary of the Company, proposes to undertake the business of direct insurance broking. TMIBSAL has received a l icence from Insurance Regulatory and Development Authority (IRDA) to act as Direct Broker under the IRDA Act on May 13, 2008. Pending the issue of l icence, no business was carried out during the period of October 2005 to March 2008. Tata Motors European Technical Centre plc. (TMETC) is a 100% subsidiary of the Company engaged in the business of design engineering and development of products for the automotive industry. Working synergistical ly with the Company, TMETC provides it with design engineering support and development services, complementing and strengthening the Company’s ski l l sets and providing European standards of delivery to the Company’s passenger vehicles. TMETC earned gross revenues of Rs. 1279.5 mil lions and an operating profit of Rs. 114.3 mil l ions as against Rs. 70.8 mil l ions 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 is a listed company engaged in manufacturing sheet metal components, assemblies and bus coaches and 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 Tata cars and powertrains at Ranjangaon, Maharashtra, India. The new facility was inaugurated on Apri l 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. Tata Cummins Limited (TCL), in which the Company has a 50% shareholding, with Cummins Engine Co. Inc., USA holding the balance. TCL is engaged in the manufacture and sale of high horse power engines used in the Company’s range of Medium/Heavy commercial vehicles. Tata 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. The Company’s shareholding in TACO is 50%. Tata 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 for the computer and electronics industry.


41

Nita Co. Ltd., Bangladesh, in which the Company holds 40% equity, is engaged in the assembly of Tata 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 Company’s plans for 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 4: Significant financial assistance received from the government

The Company receiv ed incentive package by the State Government for setting up the manufacturing unit of the Small Car (Nano) in Singur, West Bengal in 2007-08. Howev er, before the incentives could be utilized, the plant w as shifted to a new location – Sanand, Gujarat, India. This shift occurred as there w as lack of safety of its employees and equipments in the hostile env ironment created by constant attacks on colleagues and property in the region. The Company has also benefited from the incentiv es offered by the State Industrial Development Corporation of Uttaranchal to attract industrialization in the region. The Company has set up its ACE Factory in the area and has dev eloped an extensiv e v endor park in the region as w ell, opening a whole new range of employment opportunities.

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 by the law, Tata 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 l i fe that the individual can enjoy in the society.

EC 6: Policy, practices and proportion of spending on locally-based suppliers

The process for sourcing has many steps and variables and to a certain degree it is often done on a case-by-case nature. At Jamshedpur manufacturing unit there are a very large percentage of local suppliers. In terms of environmental and labour practices, the sourcing department wil l not consider a vendor or potential vendor that does not have the required l ist of certi fications, including the compliance with factories Act, audited by the government for confirmation. Following that there are visits, succeeded by visit reports. A check-l ist of 37 points is required to be met, including aspects of Quality, Cost, Delivery, Design and Management Systems (QCDDM). Geographical location, although a part of the process, is not an overwhelming priority. Quality is the most central factor, then there is loyalty to current suppliers (whether they operate in the relevant area or would be wil l ing to open business there), then there is local suppliers considered, proving they can provide the product at a suitable price. Moreover, sourcing conditions differ from location to location. For example, Jamshedpur is well endowed with sources around the area, so very l i ttle needs to be bought in. If products do need to be bought in, often they wil l encourage the company to open a plant in the vicinity. However, while these are the considered processes, there is much case-by-case analysis, so the process can vary according to the type of part and also the type of supplier.


42

EC 7: Procedure for local hiring

In India, citizens have the freedom of domici le in any state of the country (with exceptions of very few states) and as such local hiring is not specific. Major areas of operation in India l ie in Jamshedpur, Pune, Lucknow and now Uttrakhand and at these locations, more than 50% of the jobs have been created for the local populace there.

EC 9: Indirect econom ic im pacts, including extent of im pacts

Wor ldwide, Transport sector has emerged as the biggest employer * 1 Commercial Vehicle - employment for 13.3 people 1 Car - employment for 5.3 people 1 Three Wheeler - employment for 3.9 people 1 Two Wheeler - employment for 0.5 people * Source: Automotive Mission Plan 2006-16, Includes: Direct and Indirect Employment Tata Motors recorded its highest ever sales of 585,649 vehicles (352,785 commercial; 232,864 passenger ). The approximate indirect economic impact generated by the company in 2006-07 is summar ised below

* Includes initiatives to enhance employability (vocational and technical training, apprenticeship programmes), promotion of co-operatives and formation of Self-Help Groups ** On assumption that one passenger car sold creates employment for at least one person – dr iver/cleaner *** On assumption that one commercial vehicle sold creates employment for at least three people – Dr iver and cleaner/helper & loader

5000

10,300

1,058,355

23,230

232,864

Dir ect

Employees

Employees in

Subsidiar ies Indirect

employment fr om passenger car s**

Indir ect employment fr om commer cial

vehicles***

Employment thr ough social

initiatives*

18,000

Employment gener ated through channel par tners


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6

Environment Management Approach and Performance Indicators


44

MANAGEMENT APPROACH Tata Motors Ltd, (TML), plans for the environment in i ts processes, products and services. “Facilities and Environment Management” is identified as a Business Process and is formally documented in our Enterprise Process Manual. “Facil i ties and Environment Management” process is mapped in detail and the measures for “effectiveness and efficiency” of the process are specified. This has helped the Company to evolve a uniform approach across al l manufacturing locations in the country. Environment Management system at Tata Motors is given below:

How it operates (M ethods/ Practices) [Cross Ref.: EMS M anual at respectiv e locations] 1. A ssess the ‘sig nificant’ env ironm ental aspects of products and

activ ities as per established EM S procedures- • All Pr ocess Ow ner s identify the ‘significant’ envir onmental

aspects of pr oducts and activities w ith the help of ERC centrally & Envir onment Gr oup at r espective Wor ks locations.

2. Define Operational Controls, Em ergency A ction Plans and set

‘Objectiv es and Targets’ • Oper ational Contr ol Pr ocedur es and Emergency Action Plans are

established and deployed. Pr ocess r equir ements ar e assessed in

Inputs • National & Inter national

Legislation & pr otocols

• Quality & Envir onmental Policy

• Rules & Regulations • Plant level waste disposal

guidelines.

• ISO:14001 • New developments • Global developments such

as Climate Change

Outputs

• Impr ovements in 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

Effectiveness

Ratio

(TISHD*)

Efficiency

Impr ovement over pr evious year s ‘environmental per for mance’

* TISHD – Tata Index for Sustainable

Hum an Dev elopm ent

Unit Per formance M easure

Key Steps in - ‘Env ironm ent Manag ement’

• Assess the significant envir onmental aspects of

pr oducts and activities • Set ‘Contr ol Processes’ and ‘Objectives &

Tar gets’ • Deploy the pr ocess and implement ‘Action Plans’

to achieve ‘Objectives & Tar gets’ including Climate Change r elated issues

• Review pr ocesses for impr ovements / and conduct inter nal / ex ter nal audits

• Review the process


45

E All our manufacturing faci l ities (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 Tata Motors Township have also achieved certification to ISO:14001. EN 1: Total m aterials used by type

Material Used by Type

Consumption in 2007-08*

Steel ( Thousand MT) 205.094

Oils (KL) 26947.79

Pre Treatment (PT) Chemicals (MT) 936.64

Paints, Primers & Thinners (KL) 9509.9

* Data includes three main manuf acturing units in India, v iz. Jamshedpur, Pune and Lucknow EN 2: Percentage of m aterials used that are recycled input m aterials

Re-cycling of material is best i l lustrated in the use scrap metal generated externally as well as internally. Re-use of packaging materials: Aggregates and assemblies moving between Pune and Jamshedpur Plants are packed in wooden crates manufactured from scrap wooden packaging of incoming material. This was further improved by changing four types of aggregates to returnable metal pallets,


46

Collapsible, custom-built polypropylene (PP) boxes have been developed for bought out components that are bulky and l ight (e.g.: dashboards). These PP boxes can be dismantled, flattened and returned to vendors for re-use, el iminating 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.

Quantity of Scrap wooden packaging box sold to recyclers: In addition, The Company is working with the ‘Department of Science & Technology’ on the Expert Panel on “Recyclabil i ty of automotive Systems & Components”. It is also working with Society of Indian Automobile Manufacturers (SIAM) as a member of task force to study recyclabil ity of vehicles in India. EN 3 & 4: Direct and Indirect energy use Fuels are used for process heat requirements and energy. Liquefied Petroleum Gas (LPG) is used as a fuel to generate heat as well as in the process for generation of Endo-gas in continuous Carburising and Hardening Furnaces.

TOTAL Energy Used (Aggregate of all types) 2007-08

Total Direct used (in Million MJ) 2339.25

Total Indirect used (in Million MJ) 2556.11 * Data includes two main manuf acturing units in India, v iz. Pune and Lucknow EN 5: Energy saved due to conservation Tata Motors considers energy conservation critical to the operation of i ts manufacturing units. Apart from reducing operational costs, the energy saved amounts to environment protection by way of


47

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. • Instal l ing 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 l ighting. • Use of compact fluorescent lamps, sodium vapours lamps to minimize energy consumption. • Instal l ing portable compressors for isolated running to save compressed air • Harnessing natural daylight by instal l ing translucent roof sheets in workshops • Use of Liquefied Petroleum Gas in place of Light Diesel Oil and Electricity for heating, wherever

applicable. • Instal lation of Turbo Venti lators in forge and Foundry to extract fumes which do not require

energy to operate Representatives of the Company are participating in the fol lowing 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 “Technical 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 retrofi t demonstration project” constituted by National

environmental engineering research institute, Mumbai 4. Multi stakeholder committee to “Develop Better environmental sustainabil i ty 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 Insti tute (TERI), Delhi

EN 6 & EN 7: Initiatives to use renewable energy sources and increase energy efficiency

The Env ironment Challenge: The demand for energy has grown along with rapid industrial growth. Studies have forecast a shortage of fossi l fuel worldwide leading to ultimate extinction, when natural deposits wil l be completely depleted. Fossil fuel based conventional power generation is recognized 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. Tata Motors’ opting for wind energy effectively reduces the demand for electricity generated by burning conventional fossi l fuels such as coal and fuel oi l . Wind Pow er Dev elopment in Maharashtra: The estimated wind energy potential of India is 20,000 MW and 800-900MW in Maharashtra. The State Govt. has appointed an agency, Maharashtra Energy Development Agency (MEDA) to encourage use of non-conventional energy sources such as wind power. MEDA has identified various sites n Maharashtra, where sufficient wind velocity is available to develop wind power generating units.


48

Use of Wind Pow er at Tata Motors, Pune: M/s Suzlon Energy Ltd. instal led & 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 Tata 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. EN 8: Total w ater use Total water consumed during 2007-08 was 6222080 m3 Total water withdrawal by source in 2007-08 was 605057 m3

(P.S. The above figures are for three manufacturing units of Tata Motors, viz. Jamshedpur, Pune and Lucknow only) EN 9: Water sources significantly affected by w ater w ithdraw al There is no direct withdrawal of water from the source river Subranarekha at Jamshedpur. Raw water is taken from M/s JUSCO (Jamshedpur Uti l i ty Services Company) of Tata Steel and treated in works and town water fi l ter plant. All water consumed at Pune manufacturing unit is sourced from State Uti l i ty-MIDC (Maharashtra Industrial Development Corporation), which in turn draws water from Pavana River. At the manufacturing unit in Lucknow, water is withdrawn from under ground water sources. At this unit, there is extensive water recycling procedure. The initiatives include - Rain water harvesting, digging of ponds and deep puncturing water replacement. In the latter, water is collected from roofs and around the manufacturing unit and funneled down bore holes to deep water supplies rather than simply al lowing it to remain at the relative surface of the ground. EN 10: Total recycling and reuse of water Water Conservation Activities: They comprise the fol lowing broad areas-

Water Management System Intake Management Maintenance of water distribution network Quality of water (portabil i ty checks) Optimization and leakage surveys Water re-circulation systems Water boosting systems Clean production processes. Rain water harvesting projects


49

EN 11: Location and size of land ow ned, leased or m anaged in biodiversity rich habitats While the faci l i ties of Tata 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 faci l i ties are located near such protected areas. Tata Motors, however, has taken immense care to develop the residential area adjoining Pimpri Works into a "bird sanctuary". EN12: Description of the m ajor im pacts on biodiversity There are no major impacts on bio-diversity by the Company’s operations. EN 13: Habitats protected or restored Major ecological impact on the habitat has been achieved over sustained efforts around the manufacturing unit of Pune. These include:

1. Transformation of landscape of hard basalt rock, fi t for the growth of only wild shrubs into a Green belt consisting of 3, 00,000 trees.

2. Creation of two lakes which also serves as perennial source of water for Tree Plantations. 3. Pisciculture: A large variety of fish, including rohu, catla, mrigal, mahseer and silver carp

were introduced which are thriving in this natural environment. 4. Bird Sanctuary: Today, these lakes and the surrounding area, attract a large number of

water birds, many of which have made the lakes their permanent home, creating the only ‘bird sanctuary’ right in the middle of the Pimpri - Chinchwad industrial area

EN 14: Strategies, current actions and future plans for managing im pacts on bio-diversity The Ministry of Environment & Forest (MoEF), Government of India, has appointed Gram Vikas Kendra, Jamshedpur (GVKJ) an NGO supported by Tata Motors, Jamshedpur, as the Regional Resource Agency (RRA) for National Environmental Awareness Campaigns (NEAC) 2008 for Jharkhand State for 15th consecutive year. National Theme 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 Awareness Programmes 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

• Tree plantation drive by Gram Vikas Kendra, Jamshedpur. In FY 07-08 165000 trees were planted

• Rain water harvesting pond constructed in 4 vi l lages of Singhbhum (E) district namely Kanikola, Jaskandih, Patherchakri and Narayanpur

• GVKJ has been appointed as Regional Resource Agency for the 15th consecutive year to co-ordinate the National Environmental Awareness Campaign (NEAC)

• A good number of Forest Protection groups formed. to maintain the status quo of biodiversity


50

At the manufacturing unit in Lucknow, initiatives taken include: • Fencing of lake area to protect the sensitive & nurtured plants from being destroyed by wild

animals • Plantation of 10,000 plants to maintain green belt for healthy work ambience, natural

aesthetic & meeting statutory environmental compliance • Mass plantation of Jatropha Curcas (Bio fuel plant) satisfying National economic interest and

Global environmental concerns 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 There is no impact of activities/ operations on such sensitive areas. EN 16 & EN 17: Greenhouse Gas Em issions Based on Fuel consumption (FO, LDO, HSD & LPG) data at each location is considered for Direct GHG calculation. Ref. Site: Calculation Tools for Corporate GHG Accounting - GHG Protocol Initiative.htm belong to World Resources Institute and World Business Council for Sustainable Development is being used for the computation of Direct GHG emission. Electricity Consumption data at each works is considered for the Indirect GHG computations CO2 co-efficients has been arrived by a weighted average emission for generators supplying to the grid in the states of Jharkhand.

Total Direct GHG emissions (CO2, Thousand Tonnes) 2007-08

Jamshedpur 233.10

Pune 280.26

Lucknow 23.87

Indirect GHG emissions (CO2,Thousand Tonnes) 2007-08

Jamshedpur 39.78

Note: Assumptions used in the computation: Direct Emission: To avoid complexity , GHG emissions due to electricity import f rom JOJOBERA Power Plant generation has been categorised under the Direct Emission. Indirect emissions due to outbound logistics and employ ee trav el (domestic and international) hav e not been considered due to unav ailability of suf ficient data. Howev er, f or Jamshedpur Plant Township including Hospitals (works & main) outside the works boundary has been considered under indirect GHG emissions. Source: GHG Footprint Assessment Report f or Tata Motors Ltd. by M/s ERNST & YOUNG, base year 2007-08.

EN 18: Initiatives to reduce GHG em issions

• 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. This makes Propane a more environment friendly fuel compared to LDO due to almost ni l SOx emissions. 2 bullets of 100 Metric Tonnes capacities each are under instal lation phase.


51

• Clean Development Mechanism (CDM): Taking opportunity of the CDM mechanism, Tata Motors Ltd. initiated action for 20.85MW Wind Power Projects instal led & 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 MITCON and submitted to Ministry of Environment (MoEF) for Host Country Approval. MoEF, New Delhi has issued Host Country Approval for the Project. The Project was validated by M/s BVQI and registered by UNFCCC.

• In September 2007, successful ly 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.

EN 19: Use and emission of Ozone Depleting Substances (ODS) Refrigerant CFC-12 is an “Ozone Depleting Substance (ODS)”, categorized under Group I of the ODS (Regulation & Control) Rules, 2000, which is to be phased out by the year 2010. The Company is actively working to achieve this well ahead of this target, by first targeting reduction in consumption of CFC-12 for the existing refrigeration equipment. The Company has an EMP in place to convert refrigeration units using refrigerant CFC-12 to i ts environmentally friendly alternatives i.e. replaced with units operating on R-22 / R-134a. Due to the above proactive actions, we have been successful in containing the consumption of CFC-12 refrigerant for maintenance of existing equipment. EN 20: NOx, SO2, and other significant Em issions by type

Suspended Particulate Matter (SPM) Limit : 500 microgram/m3 2007-08

Jamshedpur Manufacturing unit Annual Average 280.00

Pune Manufacturing unit

Annual Average 182.66

Lucknow Manufacturing unit

Annual Average 187.04 Sulfur Dioxide (SO2)

Limit : 120 microgram/m3 2007-08

Jamshedpur Manufacturing unit

Annual Av erage 7.21 Pune Manufacturing unit

Annual Av erage 11.03 Lucknow Manufacturing unit

Annual Av erage 11.09 Nitrogen all Oxides (NO)

Limit : 120 microgram/m3 2007-08

Jamshedpur Manufacturing unit Annual Av erage 45.12


52

Pune Manufacturing unit Annual Av erage 12.47

Lucknow Manufacturing unit Annual Av erage 12.83

Respirable Particulate Matter (RPM) Limit : 150 microgram/m3 2007-08

Jamshedpur Manufacturing unit Annual Av erage 129.09

Pune Manufacturing unit Annual Av erage 63.88

Lucknow Manufacturing unit Annual Av erage 66.06

EN 21: Total w ater discharge by quality and destination At Jamshedpur manufacturing unit, the treated effluents from the outlet of Effluent Treatment Plants (ETP) constitute the only significant discharges to receiving water bodies. Kharkai river is the receiving water body at Jamshedpur. At Pune manufacturing unit, al l treated effluents are discharged into Pavana River. Treated effluents are periodically monitored for compliance with permissible limits of State Pollution Control Board (mass/volume). All values are found to be in compliance. Surprise checks are carried out by State Pollution Control Board, which are also found to be within the permissible l imits. At Lucknow manufacturing unit, al l effluents generated from plant activity and process are properly treated at our sophisticated ETP and finally discharged in the inland water bodies that sustain aquatic fauna and flora.

Table: Total Discharge to Water Body by type

Total Suspended Solids (TSS)

2007-08 (Load in Metric Tonnes)

Jamshedpur Manufacturing Unit 45.14

Pune Manufacturing Unit 52.74

Total Oil & Grease (TOG)



Bio-Chemical Oxygen Demand (BOD)



Chemical Oxygen Demand (COD)




53

EN 22: Total am ount of waste by type and destination At Jamshedpur manufacturing unit:

• Paint sludge generated at Central ized Paint Shop is removed from the scrub water with a ‘Hydropac system’ for effective separation. The water is re-used in the paint booths along with make up water. This prevents the raw Paint Shop effluent from reaching the ETP directly. Paint sludge is collected and sent to Industrial Incinerator.

• Press Fil ter is provided for removal of sludge from phosphating bath. • Incinerator model LRD-250 of capacity 250 kg /hr has been instal led to incinerate hazardous

waste without production of smoke or odour and to enable al l hazards taken care of properly and to provide a cleaner, safer and healthier environment. The incineration system has been optimized to:

o Incinerate varying nature and quantities of wastes at any given time o Remove all the acidic pollutants and particulate matter in the flue gas by effective

scrubbing with water/ caustic o Following hazardous wastes are being incinerated: Paint sludge, Oil sludge / scum;

Oil soaked waste jute, hand gloves, aprons etc. & Phosphate sludge. Equipped with Auto-loading system (ram loader), Paint stripping chamber (heat recovery), High pressure jet wet venturi scrubber with mist el iminator, 30-m self-supported, rubber-l ined chimney, PLC controlled panel board and Flue gas analyzer

At Pune manufacturing unit: Al l hazardous wastes are disposed through an Authorised Common Hazardous Waste Treatment Storage and Disposal Facili ty (CHWTSDF) located 125 km away at Taloja. The Operator of the CHWTSDF picks up the generated waste in customised containers and moves the same by dedicated trucks from our Facil i ty to the final disposal point. The wastes are disposed by various pathways depending on their hazard characteristics. These disposal pathways include - direct incineration, direct landfi l l and landfi l l after treatment. At Lucknow manufacturing unit: All waste is collected properly and finally disposed off through Ministry Of Environment and Forests/Uttar Pradesh Pollution Control Board approved Recyclers/Vendor. EN 23: Significant spills of chemicals, oils, and fuels in term s of total num ber and total volume There were no significant spi l ls of chemicals, oi ls or fuels in the reporting period. A systematic effort is underway to quantify and define what could be termed as a “significant spi l l” based on the nature of the hazardous chemical, quantity stored, extent of pipeline network and the age of instal lation. EN 24: All production, transport, im port, or export of any w aste deem ed “hazardous”

No hazardous wastes are being imported or exported. However, the Hazardous wastes generated in various production processes l ike waste or used oi l , non-ferrous metal i .e. waste copper dross/ plates, hazardous wastes (lead bearing type), batteries defined as "hazardous" in Schedule-4 of Hazardous Wastes (Management & Handling) Amendment Rules 2003 are sold to the MoEF/CPCB Registered Re-cyclers/ Re-refiners/ Re-processors only. These are being transported as per the


54

Hazardous Wastes (Management & Handling) Amendment Rules 2003 to ensure the fol lowing statutory requirements:

• Endorsement of the Hazardous Waste quantity sold in authorised buyer's Pass Book as per the authorized recycling capacity mentioned

• Label properly the Hazardous Waste containing consignment

• Fil l up and sign the 6 coloured copies of MANIFEST (Form -9) and send to the concerned as mentioned in the copies

• Hand over the TREM CARD (Transport Emergency Card) to the Transporter

EN 25: Im pacts of activities and operations on protected and sensitive areas

There is no impact of activities/ operations on such sensitive areas.

EN 26: Initiatives to m itigate environmental im pacts of products and services

Prevention of Atmospheric Pollution:

Exhaust emission standards are becoming stricter in Japan, Europe, the U.S. and many other countries and regions. India introduced its first standards in 1991, and these have become progressively more stringent over the years. Tata Motors aims to respond quickly to develop new models that comply with latest national standard for domestic product and international standard relevant to countries where the products are exported.

Reducing CO2 Emissions and Increasing Fuel Efficiency:

CO2 emissions are considered to be a primary contributing factor to global warming, making their management the most important challenge for Tata Motors. Of the total volume of CO2 emissions associated with the l i fe cycle of an automobile, from excavation of raw materials to recycling of end-of-l i fe vehicles, the largest portion occurs when the vehicle is on the road. Controlling these emissions is one of the most significant technology challenges TML is tackling today. While we are working in developing fuel cells and other technologies of the future, we are also working to reduce CO2 emissions today’s vehicles through highly efficient engines and technology.

(a) Diesel Emphasis: As diesel is a more thermodynamically efficient fuel, our product lines focus heavily on clean and modern diesel engines for automotive and stationary applications.

(b) Multi-sector coverage: Tata Motors has been consistently developing and manufacturing products that can contribute to CO2 reduction across all road transport segments and in shifts between segments e.g. Bus Rapid Transit System (BRTS).

(c) Provide safe affordable transportation of people and goods with least CO2 emissions, exemplified by Nano and Ace

(d) Alternative fuel initiatives in the widest possible spectrum of products along two axes:

- Blend Axis: Progressively blending of petrol with ethanol, Biodiesel with diesel and hydrogen with CNG.

- Hybridization Axis: Hybridization from mild hybrid to ful l electric vehicle to hydrogen fuel cel l vehicle.


55

(e) Minimize CO2 emissions by designing & developing the vehicles for Indian operating conditions rather than directly adapting the vehicles from other markets e.g. Mumbai City Fuel Efficiency Drive Cycle.

(f) Use of energy efficient air conditioning system l ike 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 Reduced Use of Hazardous Substances: The European Union directive 2000/53/EC on end-of-l i fe vehicles (ELVs), which was proposed by the European Commission and approved by the European Parl iament, in principle banned the use of four hazardous heavy metals (lead, mercury, cadmium and hexavalent chromium) in automobiles (Cars/UV’s & Pick ups upto 3.5 GVW). TML is in compliance with the EU directive on ELV’s for export vehicles to European Union.

TML has successful ly implemented Lead free wheel balance weights, lead free printing inks, lead free bulbs, alternate designs/coatings for hard Cr plating, cadmium plating, Lead free coatings for fuel tanks, Lead free carbon brushes for electrical motors etc.

Asbestos free brake pads & clutches have been introduced in many of our products. Water based paints is being used instead of solvent based paints to avoid VOC emission.

Work is going on for reducing/el imination of hexavalent chromium for corrosion preventive coatings and development / implementation of lead free bearing shells & bushes.

Reducing Noise Lev els: TML is not only meeting the national regulations but also al igned with European noise regulations and continuously working with international bodies to further improve noise regulations.

Participating in National Committees & Initiativ es Related to Env ironment:

Representatives of the Company are participating in the fol lowing national committees working for improvement of environment throughout the country:

(a) Committee on “Air quality monitoring, emission inventory and source apportionment

studies for Indian cities” constituted by Central Pollution Control Board, Delhi. (b) Standing Committee on Emission (SCOE) and Sub-committee on Fuel Efficiency Norms

of Union Ministry of Shipping, Road Transport and Highways of India. (c) “Expert Committee on vehicular pollution control” constituted by Central Pollution Control

Board, Delhi. (d) Ministry of New & Renewable Energy, Government of India (GoI), is promoting and

assisting technology development for GHG reduction by way of increased usage of Biodiesel. Tata Motors is engaged in this initiative of Government of India.

(e) Coordinated Automotive Research initiative of Department of Science & Technology of Government of India, for developing the National Hybrid Propulsion Platform programme.


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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) Recyclabil i ty and Recoverabil i ty Regulation at “End of Life” of vehicle:

a. Meeting European directive on “recyclabil i ty” and “hazardous substances”. b. Providing technical information on dismantleabil i ty of the vehicle to the dismantler

for use at “End of l i fe vehicles”.

(b) Extended drain period for axle and gearbox oils: Vehicle Trials for further enhancement in the drain period of axle & gearbox oi l are in progress. 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 There 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 organisation’s 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. EN 30: Total environm ental expenditure Total environmental expenditure in 2007-08 on various environment development initiatives at our manufacturing units was Rs. 169 mil l ions.


57

7

Social Management Approach and Performance Indicators


58

MANAGEMENT APPROACH

Employees are the driving force of our organisation. The permanent employees’ strength of the Company as on March 31, 2008 was 23, 230. Recruitments across al l levels, extensive training and ski l l enhancement activities were carried out especial ly at the new locations, in l ine with the Company’s expansion and growth plans. Company’s cordial industrial relations were maintained at al l times and the Company entered into three wage settlement with i ts union. There has been consistent improvement in productivity across al l locations.

The Company was awarded India’s Best Managed Company for 2007-08 in the automotive sector by Business Today based on a study conducted by Ernst and Young.

Communicate, Engage, Reward, Rec ognise,

Union-Mg t Relationship

Strategic AlignmentPillar

Strategy ExecutionPillar

Leadership / Growth & Development Pillar

Structure, Competenc ies, Manpower Planning ,

Deployment

Engagement,Performance Mgmt.,Consequence Mgmt.Industria l Relations

Organisational & ChangeCapability Building ;

Managing & Expanding Talent Base

Communicate, Reward,Recognise

Develop / Grow

Strategy-Structure Match, Family Size, Eff iciency,

Effectiveness,

F E E D B A C K

H R S T R A T E G I C P I L L A R S

S T R A T E G I C E L E M E N T S

A C T I V I T I E S

D E L I V E R A B L E S

VisionBusinessStrategy

Core Values

Engagement, SuperiorPerformance, Motivation,Retention, Productive &

cordial relationship

Orgn. Capability, AgilityFuture Leadership,

International Mindset

Attract, Select and Deploy

Identify, Tra in / Develop, Grow, Rotate

S Y S T E M SS Y S T E M S S Y S T E M S

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


59

multiple factories and in each factory there is an officer in charge of safety. These officers in turn identify and train Safety Stewards from amongst the workers. The structure enables the effective implementation of Poka-Yoke (mistake proofing).

Manpower planning department looks after recruitment, training and performance management at all levels. Training division at every location is in charge of identifying ski l l gaps and designing and organising training programmes for both the blue-collared and the white-collared workers.

The 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 Director or to the Executive Director.

A. LABOUR PRACTICES AND DECENT WORK

LA 1: Total Workforce by region

Total Workforce by Region Category* Jamshedpur Lucknow Pune Uttaranchal Mumbai Small Car Total Executive 144 34 315 8 166 4 671 Managerial 1092 398 3199 213 1171 51 6124 Supervisory 1060 100 1461 65 165 20 2871 Operatives 3894 626 8841 27 176 0 13564

*The Management team comprises of Executive Grade which represents the senior leadership, the TM grade which represents Middle Management as well as the various entry points based on different level of education l ike graduation, post graduation etc. Operatives refer to workmen who have requisite technical qualification employed for direct production activities

LA 2: Total rate of em ployee turnover

Tata Motors’ Annual Attri tion Percentage for various grades is as fol lows:

Executive 3.4 % Managerial 10.4 %

LA 3: Benefits provided to full-tim e em ployees that are not provided to temporary or part-tim e em ployees

Employee Benefits (i) Gratuity The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 to 30 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company makes annual contributions to gratuity fund established as trust. The Company


60

accounts for the l iabi l i ty for gratuity benefits payable in future based on an independent actuarial valuation. (i i) Superannuation The Company has two superannuation plans, a defined benefit plan and a defined contribution plan. An el igible employee on Apri l 1, 1996 could elect to be a member of either plan. Employees who are members of the defined benefit superannuation plan are entitled to benefits depending on the years of service and salary drawn. The monthly pension benefits after retirement range from 0.75% to 2% of the annual basic salary for each year of service. The Company accounts for the l iabi l i ty for superannuation benefits payable in future under the plan based on an independent actuarial valuation. With effect from Apri l 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. The Company maintains a separate irrevocable trust for employees covered and entitled to benefits. The Company contributes up to 15% of the el igible employees’ salary to the trust every year. The Company recognizes such contributions as an expense when incurred. The Company has no further obligation beyond this contribution. (i i i ) Bhavishya Kalyan Yojana (BKY): BKY is an unfunded defined benefit plan. The benefits of 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 certi fied by the Company’s Medical Board. The monthly payment to dependents of the deceased / disabled employee under the plan equals 50% of the salary drawn at the time of death or accident or a specified amount, whichever is higher. The Company accounts for the liabi l i ty 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 l imits of amount, periods after 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 grounds or due to permanent disablement are also covered under the scheme. The l iabi l i ty for post-retirement medical scheme is based on an independent actuarial valuation. (v) Provident Fund The 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 contributions at a specified percentage of the covered employees’ salary (currently 12% of employees’ salary). The 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 shortfal l in the fund assets based on the government specified minimum rates of return or pension and recognises such contributions and shortfall , i f any, as an expense in the year incurred. (vi) Compensated absences The 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 l imits, for future encashment. The l iabil i ty is provided based on the number of days of unuti l ised leave at each balance sheet date on the basis of an independent actuarial valuation. Some other benefits advanced to the permanent employees are:

• Allowances l ike Transport al lowance, Education allowance, Sanitation al lowance, Leave travel al lowance etc

• Annual Performance l inked Payment • Free Medical faci l i ty for family • Company loans & advances

LA 4: Percentage of employees covered by collective bargaining agreem ent


61

Tata 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 unions respectively cover al l 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.

LA 5: Minim um notice period(s) regarding operational changes, including whether it is specified in collective agreem ents

For Notice period regarding operational we fol low the procedures mentioned in the Industrial Disputes Act (21 days). This Act was passed by the Central Government of India to make provisions for investigation and settlement of industrial disputes and came into existence in Apri l 1947.

LA 6: Formal Joint Managem ent-Worker Health and Safety Comm ittees

Tata Motors has a Safety Health and Environment (SHE) policy, which encompasses al l regulatory norms along with International Labour Organisation recommendations. Tata Motors has a process for reporting, recording, analysis and action on accidents and unsafe conditions. The safety issues are addressed through a bipartite (management and union) arrangement as depicted in the table here below.

Table 1: Various Health and Saf ety committees at plant location

These committees thus cover 100% of the workforce.

LA 7: Injury, accidents, work-related fatalities

Our practices are in l ine with the International Labour Organisation (ILO) “Model code of Safety Regulations for Industrial establishment for the guidance of Government and Industry”. The decision taken by the Governing body of the ILO conference held in 1948, the model code is not an instrument involving any binding obligations, and Government and industries are free to make such use of it as they see fi t in framing or in reviewing their own safety regulations. The above guidelines are, however, incorporated in the Factories Act 1948 and the Company strictly fol lows the rules and accordingly the accident reporting or notice of accident or dangerous occurrence is recorded and communicated to the concerned authorities (CIF) in FORM No. 17A.

LA 8: Risk-control program m es in place to assist w orkforce members, their families or com m unity mem bers regarding serious diseases

Tata Motors provides curative and preventive health services to the employees, their famil ies as well as the community at large. It views its initiatives as a part of its social responsibi l i ty and as an investment in improving social capital. Of these initiatives, some have been highlighted in the


62

fol lowing paragraphs. The Company has a robust Medical Scheme which covers complete health care of employees and their dependent family members.

Tata Motors is committed to take initiatives to combat the spread of HIV/AIDS. Tata Motors is aware of the social stigma that accompanies the contraction of HIV / AIDS and thus as a conscious decision, the Company does not make any discrimination, right from employment to retirement of employees.

• During pre-employment medical check-up, no HIV testing is done • Employees having HIV /AIDS are al lowed to work in our Factory unti l they are able to

continue normal duty • Company’s Medical Benefit Scheme extends its’ benefits (reimbursement of medical

expenses) to employees who are suffering from HIV / AIDS. These benefits are at par with any other medical benefits (It is not under exclusion as most of Insurance Companies are having)

• Total confidential i ty is maintained about HIV +ve status of any employee

T a ta M o tors sta rte d i t s AIDS awa re n ess p ro gra m me wi th t h e p rim a ry ai m to cover al l e m pl o ye e s a n d to m ake th em a ware a b ou t t h e ca u ses, symp to m s, m yths a n d p re ve n t i o n o f HIV/A IDS. Co mp a n y do cto rs d e si g ne d a 30 m i n utes lecture module and d e l ive re d i t t o a l l e m p l oye e s on t h e sh o p f lo o r, f ol l o we d b y d i stribution of informative b o okl e t o n A IDS . A l l e xp e n se s fo r t h e d e si gn i n g an d i mplementation of the programme we re b o rn e b y t he Co mp a n y.

In addition, Tata Motors supports a hospital in Jharkhand state and also runs Mobile Health Clinics in various vi l lages adopted by the Company in Jamshedpur, Lucknow and Pune. Awareness programmes are extensively organised on various health issues for the community members. The curative and preventive health services were provided to over 92390 non-employee patients in 2007-2008.

Photo: Jamshedpur Hospital

Tata Motors has also treated 8,000 leprosy patients in last two decades through the Nav Jagrat Manav Samaj (NJMS) in Jamshedpur, Jharkhand. The services extended have contributed towards the reduction of leprosy prevalence rate in Jamshedpur down from 22/1000 to 2.2/1000.


63

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 Rehabil i tation 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 colonies of 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 l ike rearing of l ivestock, poultry, cycle-rickshaw, cart and even growing vegetables and sell ing them. A temporary hospitalization faci l i ty with 28 beds is available for the treatment of seriously affl icted patients of leprosy. A 30-bedded Old Age Home run by NJMS caters to the old and destitute.

LA 9: Health and Safety topics covered

Safety has been a concern for Tata Motors and the Company is taking steps to reduce the injuries and accidents. All Tata Motors manufacturing units, including the new manufacturing unit at Uttarakhand are certi fied under Occupational Health and Safety Standards 18801 (OHSAS 18001, 2007 version). OHSAS 18001 is an Occupation Health and Safety Assessment Series for health and safety management systems. It is intended to help an organization to control occupational health and safety risks. It was developed by the Government of India in response to widespread demand for a recognized standard against which to be certi fied and assessed.

In addition, Tata Motors manufacturing unit at Pune has been certi fied Social Accountability 8000 compliant. Clause No. 3 of the SA 8000 pertains to occupational health and safety. A Zero Accident Plan was launched in 2007-08, wherein area ownership was developed by teams comprising of management and supervisory grade workers called Bay Owners. The Bay Owners met twice a week and conducted cross audits and organised awareness building programmes.

LA 10: Average hours of training per year per employee by employee category

Average Hours of Training per year per employee Executive 49 Managerial 52 Supervisory 41 Operatives 23


64

LA 11: Skill Managem ent and Managing Career Endings

LA 12: Employees receiving regular performance and career developm ent reviews

All employees are evaluated based on performance and merit. The Company has customized the PMS for the requirements of different categories of employees-managerial, supervisors and bargainable employees. In the PMS system, Individual performance plans are cascaded from the Balance Score Card down to the smallest work unit, bringing business and customer focus to al l levels and teams. Monthly and mid-course half yearly reviews are held to ensure resources; targets and training are in al ignment with business needs. Employees have an opportunity to develop their own view of their performance and discuss it with their supervisor. Formal evaluation ratings are assigned at the end of the year. PMS insti l ls a high performance culture in the organisation.

Competencies of successful executives are used as input to project the ‘Pen portrait’ of the ideal incumbent. To track the state of readiness and migration paths, the succession planning process includes colour coding for potential successors. This helps in arriving at the best fit.

The process is reviewed periodically for status of successors and for process improvements. In case a successor is not identified from the Department and Talent Pool, an internal advertisement is released. If the position cannot be fi l led internally, a suitable candidate is selected through External Advertisement.

All employees have the opportunity to advance their careers. The Company administers career progression through the PMS system for managerial employees. All employees have the opportunity of moving to higher levels. This is based on their personal preparation and desire to move, windows of opportunity and a fair selection process, as under:

Overall PMS Approach (A) &PMS for TM Employees (B)

Target setting at individual level and training need

identified

Mid year review & feedback to

employee

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

Employee & SeniorSenior Leadership and HR (Inputs to HR Plan)

Employee & Senior Employee & Senior Employee & Senior

Senior Leadership & HR

Target Setting Review ProcessCompensation process and

overall reviewA

B

Creating High Performance


65

High PotentialCounseling, skill matching, Grooming

StarsChallenging growth opportunities, career planning, mentoring

Non PerformersDeselctionannually

Solid citizensLocate in steady function, retain and evaluate potential

FTSS

Tale

nt M

gm

t

Pote

ntia

l →

Performance → Apart from regular progression, other methods used for Fast track career progression are depicted below. This helps the Company in building a resource for key areas and challenging assignments.

Career Progression Methods

LA 13: Gender Diversity by Employee category

Gender Diversity by Employee category

Male Female Executive 658 13 Manager ial 5898 226 Supervisory 2730 141 Operatives 13270 294

LA 14: Ratio of basic salary of men to w om en by em ployee category

The Government of India has passed the Equal Remuneration act in 1976. This is an Act to provide for the payment of equal remuneration to men and women and for the prevention of discrimination, on the ground of sex, against women in the matter of employment and for matters connected therewith or incidental thereto. Even before the Act came into force, Tata Group has fol lowed a non-discrimination policy in employment and compensation. Remuneration is not based on gender, social status or age and is l inked to responsibi l i ty levels and performance.

Barg ainab le

Sup ervisors

TM / EG

SVCVP scheme, Master craftsm an, Mec hatronicsscheme

Bargainable to Sup sc heme

Master craftsman, Mechatroni cs sc heme

Engineer / Internal officer trainee schem e

Talent management, @ Fast track sel ec ti on

@ Fast Tr ack S electio n Scheme is ident ified as best practice an d

learn ed by other grou p compan ies


66

B. HUMAN RIGHTS

The Ethics team at Tata Motors is in charge of the human rights aspects in the Company. The structure of the Ethics Department is given below.

HR 2: Hum an Rights Screening for Suppliers and Contractors

Tata Motors Limited has Supplier and Dealer assessment process to take care of issues related to social aspects before inducting them in organisation. All legal and regulatory requirements need to be fulfi l led before final selection into the Tata Motors fold. The company periodically audits the job contractors for adherence to labour laws and other statutory requirement l ike minimum wages, PF, payment of gratuity etc. thereby ensuring prevention of violation of Human rights and employment malpractices.

HR 3: Em ployee training on Policy and Procedures concerning Hum an Rights


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Tata Motors adheres to the Tata Code of Conduct in i ts business. Tata Code of Conduct has covered al l the Human Rights principles proclaimed in Universal Declaration of Human Rights. However, to strengthen and support internationally proclaimed Human Rights within the business of the Company, i t was decided to design exclusive policies on various aspects of Human Rights. The Policy on Human Rights is as under: “Tata Motors believes in and respects Human Rights as enunciated by the International Labour Organisation. Tata Motors is committed to protect the Human Rights of its employees while dealing with them in all the activities fal l ing under the relationship of ‘Employer’ and ‘Employee’. Decision to seek employment rests with the individual only, and it is completely voluntary. Tata Motors does not and wil l not al low or encourage Compulsory or Forced Labour in any of its processes and practices. Tata Motors respects the right of i ts el igible employees to organise for the purpose of Collective Bargaining as well as their right to support or oppose the labour union recognised by Tata Motors. Tata Motors respects the definition of Child Labour as mentioned in the guidelines of International Labour Organisation. Tata Motors wil l 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. Tata Motors honours the right of i ts employees to choose and decide the extent of their involvement in Poli tical Activities in their Personal T ime. Tata Motors expects i ts Channel Partners and Contractors to adhere to business principles consistent with i ts own.”

Each new joinee receives a copy of the TCoC. Furthermore, Excerpts from the Code is prominently displayed at al l locations and employees are well aware of i ts components and adhere to it in letter as well as in spiri t.

HR 4: Incidents of Discrim ination:

The Company has a “Policy on Equal Opportunity and Non-Discrimination in Employment”, which states: “As part of i ts Recruitment Practices, TATA MOTORS is committed to provide Equal Opportunity to all el igible applicants for employment without any discrimination against their gender, race, religion, caste, colour, ancestry, marital status, nationali ty and disabil i ty. Opportunity for employment will be solely based on el igibi l i ty and merit of the applicant. Career growth opportunities will be based entirely on individual merit.” There is robust Ethics Counsellor Process to monitor implementation of Tata Code of Conduct. The Tata Code of Conduct incorporates within i ts fold, the Human Rights principles, which thus get monitored during the process of monitoring of the former. Employees, as well as outsiders, have the l iberty to raise concerns if any, related to the Tata Code of Conduct and the Human Rights Policies thus. Ethics Counsellors, who are present at al l locations, address these concerns.


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In relation to the process of managing the business ethics, i t is of much avail to talk about the Whistle Blower Policy at Tata Motors. This policy is an extension of the Tata Code of Conduct. The Whistle Blower’s role is that of a reporting party with rel iable information. The Policy also defines clearly 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. Al l employees of the Company are el igible to make Protected Disclosures under the Policy. For the year 2007-08, 95 of the 115 ethical concerns received were resolved the same year. The remaining 20 are being reviewed.

HR 5: Support to Freedom of Association and Collective Bargaining:

In keeping with the spiri t of the Constitution of India wherein Right of Association is a Fundamental Right, Tata Motors respects the right for association of i ts employees and has constructive relationship with trade unions at al l locations. Employees are encouraged to join the Trade Unions, as it believes that most individual and collective grievances can be resolved through bipartite forums. This has led to good industrial relations. With i ts collaborative approach to company union, Tata Motors has not faced legal action regarding anti-union practices.

Approximately 15000 of our permanent employees, who come under the unionised category, are covered by collective bargaining agreements. These agreements include health and safety provisions along with compensation structures in the form of a Memorandum of Understanding (MoU) between the management and the representing Union as per the provisions of the applicable labour legislations. These MoUs are signed every three years after negotiations between representing committees of the union and the Management.

While the union membership may vary from each location, al l el igible employees, irrespective of his membership, enjoy the benefits as agreed in the MoU. The table below indicates the percentage of permanent bargainable employees who are members of the recognised union at respective locations. While the existing grievance handling process takes care of issues of temporary employees, the recognised Unions also take up their issues. Procedures involving information, consultation and negotiation with employees

Interaction Level Frequency

Business Unit Level

Managing Director , Executive Director (Business Unit Head)

Annual

Plant Head Senior VP/ Direct Reports

Monthly Per iodically

Divisional Level GM/ Direct Reports

Monthly

Factory/Department Level Divisional Head/ Factory Head/ HR

Monthly Weekly

Centre of Excellence owners / HRO Need Based one-to-one interaction

Issues not resolv ed in lower levels are appropriately escalated to higher lev els.

HR 6: Contribution to Elimination of Child Labour


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Tata Motors upholds the Tata tradition of not employing children in any of its Companies. It is bound by the statutory legislation (Factories Act, 1948) and proper records are maintained in this regard. The Certi fied 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 access to education in various regions. Infrastructural support for education helps thousands of children to access primary and secondary education. Eligible poor students especial ly from tribal famil ies are given financial assistance. 1800 students through 33 schools and institutions of social and cultural development are supported through the Shiksha Prasar Kendra, a Tata 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.

HR 7: Contribution to Elimination of Forced and Compulsory Labour

Tata Motors strictly adheres to the laws of the land with regard to forced and compulsory labour, which are prohibited under various acts and statutes. To serve as an audit from time to time, the Company has implemented Social Accountabil i ty standards through SA8000 which audits the company and its supply chain for forced/compulsory labour, possibi l i ty of chi ld labour, minimum wages, payment of wages, etc.

In addition, the Tata Code of Conduct, referred to earl ier, also has clauses on these two principles. The discipl inary action process at Tata Motors is as per the applicable laws l ike Model Standing Orders / Certi fied Standing Orders that al low the process of natural justice as per statute. Description of appeal practices

RECEIPT OF REPRESENTATIONS & APPEALS THROUGH HEAD OFFICE / SR.VP (JSR & LKO) 'S

FORWARDING THE SAME TO APPROPRIATE AGENCY HRD & C, P & IR

EXAMINATION & VERFICATION OF REPRESENTATION / APPEALS

PREPARATION OF DETAILED REPORT & APPROPRIATE REPLY , THE SAME TO BE EXAMINED

BY HO / SR.VP(JSR & LKO)'S OFFICE

MAILED TO RESPECTIVE EMPLOYEES & EXEMPLOYEES AFTER NECESSARY CORRECTIONS /

MODIFICATION

PROCESS FOR HANDLING REPRESENTATION & APPEALS MADE BY

EMPLOYEES & EXEMPLYEES

Grievance handling Mechanism


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EM PLOYEES

BARGAINABLE NON BARGAINABLE

TALKTALKTALKTALKTAL K WRITE WRITE

UNION REPRESENTATIVE

SUPERVISOR / CX OW NER / DIV HEAD

HR OFFICERS / MANAGER

LISTENING POST

ETHICS COUNSELLOR

HOTLINE

COORDINATING AUTHORITY

SR VICE PRESIDENT

CONCERNED AGENCY / DIVISION

HR 9: Rights of Indigenous People:

Government of India considers al l Indians to be indigenous. Thus, this indicator is not quite applicable while reporting only on the operations of Tata Motors within India.

C. SOCIETY

The Company has a Corporate Social Responsibi l ity 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:

SO 1: Managing Impacts on Com m unities

Institutionalizing CSR

Donations Committee CSR Committee Two pillars of the CSR Activities w ithin

CSupport institutions through donations on

basis of need and mer it

Review, monitor and guide the CSR work undertaken

across all locations

Jamshedpur

Pune Lucknow Non Plant Pantnagar Small Car

LOCTIONAL CSR


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The Company has constantly strived to mitigate the environment as well as social impacts of its products and operations. Through its various initiatives, the Company has been able to preserve and protect the environment and has also contributed to integrated social development. Through its CSR activities, the Company aims to upgrade the quality of li fe of the communities around the Company’s areas of operations. Besides, Tata Motors also encourages employees to devote time to underprivileged sections through Company projects and non-governmental organisations to share ski l ls and expertise and assist the needy. This is in l ine with the Company’s broader goal of practising and promoting self –sustaining processes and welfare activities for social and economic development and environmental protection. In a structured approach, the Company’s CSR Committee guides and reviews the CSR activities. In al l i ts 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 initiatives in the year 2007-08 is detai led in the Annual CSR Report, which can be viewed at the Company’s website at http://www.tatamotors.com/our_world/we_care.php

SO 2: Analysing Risks related to Corruption

All employees, from all ranks and grades, have signed the Tata Code of Conduct, which has a specific clause pertaining to bribery and corruption. Clause 5 of the Tata Code of Conduct enunciates the group’s approach towards “Gifts and Donations”. It reads “A Tata Company and its employees shall neither receive nor offer or make, directly or indirectly, any i l legal payments, remuneration, gifts, donations or comparable benefits which are intended to or perceived to obtain business or competitive favours for the conduct of i ts business. However, a Tata Company and its employees may accept and offer nominal gifts which are customari ly given and are of commemorative nature for special events”.

The Company, moreover, has drafted a Policy on Gifts, which is reproduced as under:

Gifts and business courtesies may be extended at Tata Motors’ expense, and accepted only if they meet al l of the fol lowing criteria:

They are not intended to obtain business or competitive favours; They are not in contravention of applicable law; and When publicly disclosed, wil l not be seen as a bribe or i l legal payment.

Gifts, received or offered, wil l be restricted to i tems of nominal value, l ike calendars and diaries, bouquets, sweets. Business courtesies received or offered should only be meals in the course of a business meeting. Any other gifts or business courtesies should be poli tely declined. Any gifts or business courtesies, which appear to be given as a bribe, should be firmly rejected and reported to the employee’s superior.” Further, the Company also has a Policy on Bribery and Corruption, which states: “Tata Motors is committed to i ts core value of Integrity. Towards this commitment, Tata Motors will ensure that neither the Organisation nor i ts Employees receive or offer any direct or indirect illegal payments, remuneration, benefits or favours to obtain business or for the conduct of business. Any violation will be treated as a punishable offence.”


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All complaints are addressed by the Ethics Counsellor Process, detai led earl ier.

SO 3: Training of Em ployees on Anti-Corruption Policies and procedures

As stated earl ier, the TCoC training covers al l employees and it has within i t the clauses on anti-corruption and bribery. Furthermore, the policies, including the Policy on Gifts and Policy on Bribery and Corruption are prominently displayed at al l locations and al l employees are made aware on the process to redress grievances, i f any.

SO 6: Contributions and Participation in Political Parties

Tata Motors maintains its neutral stance in terms of poli tics and has no poli tical al ignments and/or incl inations. Thus, there are no financial or non-monetary grants made to any poli tical party.

SO 7: Legal Actions for Anti-com petitive, Anti-trust and Monopoly Practices

No such legal actions have been fi led.

Tata Motors products and services have their own merit and no misleading statements are made about competitor’s products and services. Any information regarding the competitors is collected through legally permitted sources and means and is made only in the normal course of business. The Company does not engage in activities which generate or support the formation of monopolies, dominant market positions, cartels and similar unfair trade practices.

D. PRODUCT RESPONSIBILITY

PR 1: Custom er Health and Safety

Tata Motors has been putting in a lot of effort to improve the safety (active and passive). The Company always meets al l 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. There has been a continuous upgradation of the product safety with new technologies being brought in – Tata Motors is the first Indian manufacturer to develop and introduce airbags in our vehicles. The Company is still the only manufacturer in this country to have a crash test faci l i ty.

PR 2: Total num ber of incidents of non-com pliance w ith regulations concerning health and safety im pacts of products and services

Our record of compliance with regulatory requirements pertaining to emissions, safety, product labell ing, competition, advertising and other clauses of the Central Motor Vehicle Rules have always been proactive and exemplary. The Company has never received any sanctions for violation of regulatory norms.

PR 3 & PR 4: Product and Service Labelling

Product Development is insti tuted and structured as a New Product Introduction (NPI) business process to integrate various functions of the company. NPI is aimed at creating a product that meets customer expectations in terms of quality and value.


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New Product Introduction

Engineering Research Centre (Our Research and Development Centre) is adequately equipped with state of the art faci li ties to address specifical ly the issues of customer health and safety. It has faci li ties l ike Crash Test faci l i ty for safety and the Hemi Anechoic chamber for NVH and engine emission testing. These facil i ties 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. Tata Motors obtains test certi ficates for vehicle worthiness and other safety related issues l ike emission, brakes, noise etc. before the product is marketed through government authorised agencies. Tata Motors also obtain Homologation certi ficates for export markets from authorized test agencies. Labell ing Identification of parts that need to be labelled as per Annex II of EEC directives 2000/53/EC amended by 2002/525/EC. This directive bans the use of hazardous heavy metals – Lead, Hex-Chromium, Mercury and Cadmium. The Company issues certi ficate of compliance to the above directives based on the declarations obtained by SQIG from the suppliers.

PR 6: Adherence to Regulations regarding Marketing Comm unications

Tata Motors has instituted a Policy on Advertising which states:

“Tata Motors honours Advertising as a tool for Healthy Competition within the market. Tata Motors wil l ensure that the promotion of i ts products and services is based only on justifiable or proven facts. Tata Motors shall not make any misleading statements or use any competitive information for unfair trade practices.” The Company has embibed the essence of the policy in al l i ts processes pertaining to marketing communication and no false claims and/or unfair means are used while promoting a product/service.


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PR 8: Com plaints regarding violation of Consum er Privacy

No such complaints have been made. The Company respects consumer privacy and has in fact a written policy stating the same. The Policy on Consumer Privacy is given as under:

“Tata Motors values long term relationship with i ts customers based on the foundation of Trust, Integrity and Confidence. While delivering excellent quality products and services, Tata Motors is committed to protect Consumer Privacy in managing information and data furnished by its customers for official or personal purposes. Such data wil l not be divulged to or shared with other individuals/insti tutions without the prior written permission from customers. Tata Motors is committed to designing processes and practices that ensure continued trust of i ts customers.”

Documents

CORPORATE SUSTAINABILITY REPORT · 2018-02-14 · Tata Motors Ltd. Corporate Sustainability Report 2007-08 2 ... Strategies, current actions and ... The Company is the largest company