TATA M OTORS LIMITED

CORPORATE SUSTAINABILITY REPORT

(2007-08)

Tata Motors Ltd. Corporate Sustainability Report 2007-08

GRI CONTENT INDEX

Section As p e ct Indicator Page #

1. Profile Statement f rom MD 1.1 8-9

Description of key issues, risks and opportunities 1.2 21-23

2. Organisational Name of the Organisation 2.1 13 Profile 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 form 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

Awards Receiv ed 2.10 15-18

3. Report Reporting Period 3.1 20 Parametres Recent previous Report 3.2 20

Reporting cycle 3.3 20

Contact persons 3.4 20

R eport c ont ent 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 3.8 23 companies

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

Policy and current practices for seeking external 3.13 23 assurance

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4. Governance, Governance structure and Board composition 4.1 25-26 Commitments and Engagement 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 employees to provide 4.4 27-28 recommendations to the highest body

Linkage between compensation and perf ormance of the 4.5 28-29 Board

Process to avoid conflicts of interest 4.6 29

Process to determine expertise of Board members 4.7 29

Statements and application of mission, v alues and code 4.8 10-11 & 29-30 of conduct

Overseeing of risks and opportunities by gov ernance 4.9 27 bodies

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 4.12 32 subscribes to

Membership in associations and national/international 4.13 32 organizations

Stakeholder engagement 4.14 32

Identif ication and selection of stakeholders 4.15 21

Approach to stakeholder engagement 4.16 32

5, Economic Economic perf ormance EC1 36-40 Performance Indicators Signif icant financial assistance received f rom the EC4 40 government

Range of ratios of standard entry lev el wage compared EC5 41 to local minimum wage at signif icant locations of operation

Policy , practices and proportion of spending on locally- EC6 41 based suppliers

Procedure f or local hiring EC7 41

Indirect economic impacts EC9 41-42

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6. Environmental Materials used EN1 45 Performance Indicators 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 -eff icient products and EN6 47-48 services

Initiativ es to reduce indirect energy consumptions EN7 47-48

Total water use EN8 48

Water sources significantly aff ected EN9 48

Total recy cling and reuse of water EN10 48

Location and size of land owned, leased or managed in EN11 48 biodiv ersity rich habitats

Impacts of activ ities, products and serv ices on EN12 48 biodiv ersity

Habitats protected or restored EN13 49

Strategies, current actions and plans for managing EN14 49 impacts on bio-div ersity

Number of IUCN red list species and national EN15 49 conserv ation list species with habitats in areas affected by operations

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 volume of signif icant spills EN23 53

Weight of waste deemed hazardous EN24 53

I nit iat iv es t o m it igat e env ironment al impac ts of products EN26 54-55 and serv ices

Packaging materials that are reclaimed EN27 55

Fines and sanctions for non-compliance with EN28 56 environmental laws

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Environmental impacts of transporting organisation’s EN29 56 products

Environmental protection expenditure and inv estments EN30 56

6. Social Total workf orce LA1 59 Performance Indicators Total rate of employ ee turnover LA2 59

Percentage of employees covered by collective LA3 59-60 bargaining

Percentage of employees covered by collective LA4 60 bargaining agreement Minimum notice period(s) regarding operational changes, including whether it is specified in collective LA5 60 agreements

Workf orce represented in joint management-worker LA6 61 health and saf ety committees

Rates of injury and work-related f atalities LA7 61

Education, training and risk control programmes to LA8 61-63 assist workforce, their f amilies and community members regarding serious diseases

Health and saf ety topics covered in f ormal agreements LA9 63 with trade unions

Av erage hours of training per year per employ ee by LA10 63 employ ee category

LA11 63-64 Programmes f or skill management and managing career endings

Employ ees receiv ing regular perf ormance and career LA12 63-64 development rev iews

Breakdown of employees by category and gender LA13 65

Ratio of basic salary of men to women by employ ee LA14 65 category

Human rights screening f or suppliers and contractors HR2 66

Employ ee training on policies and procedures regarding HR3 66-67 aspects of human rights

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

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Incidents of violations concerning rights of indigenous HR9 69 people

Programmes and practices to assess and manage SO1 70 impacts on communities

Business units analysed f or risks related to corruption SO2 70-71

Employ ees trained in organisation’s anti-corruption SO3 71 policies and procedures

Contributions to political parties SO6 71

Legal actions f or anti-competitiv e, anti-trust and SO7 71 monopoly practices

Customer health and saf ety PR1 72

Total number of incidents of non-compliance with PR2 72 regulations concerning health and saf ety impacts of products and serv ices

Product and serv ice labeling PR3& 4 72-73

Adherence to Regulations regarding Marketing PR6 73 Communications

Complaints regarding breaches of consumer priv acy PR8 73

GRI Application Level A

G3 Profile 1.1 to 4.15 included in S Di scl o su res the Report E L F

D Beginning of each G3 Management E Approach Disclosures section C L A R E Reported on 67 D G3 Performance performance Indicators indicators

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1

Strategy and Analysis

7 Tata Motors Ltd. Corporate Sustainability Report 2007-08

Ladies and Gentlemen,

I am delighted to make public Tata Motor’s Sustainability 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 unveiling 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 availability of vehicle financing, and an unprecedented increase in raw material prices.

Notwithstanding all 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 life of the community it serves. The Company’s heritage of returning to the society what it 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 all emission norms in its 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 stiff cost targets of the project.

All the manufacturing facilities of Tata Motors are certified 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 successfully run its Rain Water Harvesting project in Jamshedpur manufacturing unit. The manufacturing unit at Pune, Maharashtra has consumed around 50 million 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 its community development initiatives which are linked to national and international goals and standards, including the Human Rights Charter, Bharat Nirman Programme and the Millennium Development Goals. Over a thousand youth from rural areas adopted by the Company were trained in various technical and vocational trades. 350 of these youth were trained at the Singur site in West Bengal, where the small car project 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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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 services

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 trailers, from light commercial vehicles to specialised defence carriers, from luxury buses to compact city carriers, we have it all.

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 utility Vehicles like 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 fully integrated automobile company. Today, it is the only automobile manufacturer to offer the entire range of commercial vehicles for transportation of goods and passengers and also

13 Tata Motors Ltd. Corporate Sustainability Report 2007-08 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, facilitate and support its 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 liaison 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 limited company listed on 2 stock exchanges (Bombay Stock Exchange and National Stock Exchange of India Limited) in India. Company’s Depositary Receipt Programme is listed on the New York Stock Exchange.

Markets served

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 details 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

Rs. 330.94 billion Net sales f or FY 2007-08

585,649 Volumes of products sold

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

Rs. 62.81 billion Gross debt

Rs. 3.86 billion Share Capital

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

Shareholding

The Company is a widely held, listed company (including on the New York Stock Exchange), with approximately 292,090 shareholders. The Company’s international offerings of Foreign Currency Convertible Bonds are listed 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 57079243 14.81 and Insurance Companies Mutual Funds & Unit Trust of India 10160944 2.63 Foreign Institutional Investors 65388543 16.96 Others 44987440 11.67

Total 385503954 100

Significant changes during the reporting period regarding size, structure, or ownership

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 two enterprises were formally transferred on June 2, 2008 at a signing ceremony at the Jaguar and Land Rover headquarters in West Midlands. To fund this acquisition, Tata Motors is raising Rs. 72000 millions on a rights basis and US $500/600 million through an international offering of equity and/or cost effective quasi equity instruments. Jaguar and Land Rover achieved revenues of US$ 19.09 billion for the financial year 2007-08.

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Awards received 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 receives the Global Game Changer Award 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 lives. 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 Award 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 reliability of its 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 Skills 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 Award • The Passenger Car Business Unit of Tata Motors bagged the Handa Golden Key Award 2007 for the 'Best Value Engineering Organisation'. T he award is conferred by the Indian National Value Engineering Society (INVEST).

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

16 Tata Motors Ltd. Corporate Sustainability Report 2007-08

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 Award 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 Award' 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 its scores from the previous year.

Tata Motors awarded SAP Customer Excellence Award • 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 Award 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 S ugge s tion 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 wins Rajiv 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 instituted by the Bureau of Indian Standards (BIS), New Delhi and has criteria similar to prestigious international quality awards like the Malcolm Baldrige National Quality Award USA, the European Quality Award and the Deming Prize, Japan.

Recognitions:

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 Times''. The Sumo is ranked No.3 (up from No.5 last year), while the Indica retains its No.7 position - both above all 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 all stakeholders - in India. The study was conducted by The Economic Times and Brand Finance. The study indicated that Tata Motors is also among the 14 companies in India in terms of its ability 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 listed 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, Sterlite Industries and Cipla. Business Week says that these companies have been powered by robust revenue growth, profitability and shareholder returns.

Indiv idual Aw ards

Mr Kwang-Ok Chae, President - Tata Daewoo, honoured with 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. Vivek Joshi bags patent for energy saving device

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• M r. 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.

3

Report Parameters

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Reporting period for information prov ided

The information provided in this report is for fiscal year 2007-08 (April 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 line with Sustainability Reporting Guidelines (G3 Guidelines) released in 2006. The report is to be used by the stakeholders of the Company identified as including the following:

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 Quadrilateral 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 facilitate faster transportation of goods and passengers, and would in turn create demand for safer, reliable 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 utility 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 levels: 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 two wheeler parc/market: India has a 60 million two wheeler parc and an annual sale of over 7.2 million 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 will 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 m anufacturing footprint overseas that would com bine these advantages with local operations and sourcing in these markets.

Growing consumer culture: The demand for a better lifestyle has enhanced consumption levels and rapid growth in several areas like retail chains, cellular phones and cable and satellite television. The Company, with its wide portfolio is expected to benefit from improvement in lifestyle and higher aspiration levels in passenger cars and potential growth in freight movement.

Threa ts Credit unavailability: Further tightening of liquidity position and reduction in exposure to vehicle financing by banks/NBFCs would have an adverse impact on the automotive industry. Though in- house vehicle financing has been strengthened by the Company, it would be a challenge for the Company to fully offset the decrease in credit availability from outside sources.

Interest rates hardening and other inflationary trends: Further hardening of consumer interest rates could have an adverse impact on the automotive industry. Increase in inflation could also have a negative impact on automobile sales in the domestic market.

Fuel Prices: 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 items like steel, non-ferrous and precious metals and rubber witnessed an upward movement, which was partially 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 Com pany 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,

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Free Trade Agreements and other similar policies could make the market more competitive for local m anufacturers.

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 awareness: 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 rail based mass transit systems. However, the Company would benefit from the road based mass transit system due to its wide range of commercial passenger carriers.

Boundary of the Report 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-Utility Vehicles, Sports Utility Vehicles and cars is included in the scope of the report. In addition, operations of Engineering Research Centre are also included. Economic indicators are provided for CVBU, PCBU and International Business. International Business exports are included in the CVBU and PCBU business.

Specific limitations on the scope or boundaries Tata Motors would not be reporting on all indicators as the data compilation for some of the indicators is still underway. Attempt would be to report on such indicators in subsequent reports.

Basis for reporting on Subsidiaries and Associate Companies We have added to this 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 syste m fo r i ts d a ta operations reliability and has integrated its operations under it. 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 details have been sourced from the Annual Report, which are in turn verified by external auditors. Internal and external audit practices are designed to provide assurance on systems and data. These include Corporate Assurance Process every year with the help of Tata Quality Management Services, Internal and External Financial Audit, ISO 14001 as also ISO 9000 -2000 and IS/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.

23 Tata Motors Ltd. Corporate Sustainability Report 2007-08

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

24 Tata Motors Ltd. Corporate Sustainability Report 2007-08

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, its subsidiaries and Directors and employees. The Company is in full 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 listed on the New York Stock Exchange, the Company also complies with US regulations as applicable to Foreign Private Issuers (non-US listed companies) which cast upon the Board of Directors and the Audit Committee, onerous responsibilities 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 sustainability of all 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 all its stakeholders to ensure that their rights are protected. Through the Governance mechanism in the Company, the Board alongwith its Committees endeavours to strike the right balance with its 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 all 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 Role Status on Committee Independence

Audit The Audit Committee f unctions according to its Charter that defines its All 3 Independent Committee powers, scope and role in accordance with the Companies Act, 1956, listing Directors

25 Tata Motors Ltd. Corporate Sustainability Report 2007-08

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

Remuneration The Remuneration Committee of the Company is empowered to review the 2 Independent and 2 Committee remuneration of the Managing Director and the Executiv e Director, Non-Executiv e retirement benefits to be paid to them under the Retirement Benefit Directors Guidelines approved by the Board and deal with matters pertaining to Employ ees’ Stock Option Scheme

Investors’ The Inv estors’ Griev ance Committee of the Board is empowered to oversee 1 Independent Griev ance the redressal of inv estors’ complaints pertaining to share/debenture Director as Chairman, Committee transf ers, non-receipt of annual reports, interest/dividend payments, issue of 1 Non-Executiv e and duplicate certif icates, transmission (with and without legal representation) of Managing Director shares and debentures and other miscellaneous complaints

Ethics & The Ethics and Compliance Committee was constituted to formulate Chairman being Compliance policies relating to the implementation of the Tata Code of Conduct f or Independent Director, Committee Prev ention of Insider Trading (the Code), take on record the monthly reports 1 Non-Executiv e on dealings in securities by the “Specif ied Persons” and decide penal action Director and 1 in respect of v iolations of the applicable regulations/the Code Executiv e director

Executive The Executive Committee of Board rev iews capital and revenue budgets, 5 Non-Executiv e Committee of long-term business strategies and plans, the organizational structure of the Directors, 1 Executive Board Company, real estate and inv estment transactions, allotment of shares Director and and/or debentures, borrowing and other routine matters. The Committee Managing Director also discusses the matters pertaining to legal cases, acquisitions and div estment, new business f oray s and donations

Nominations The Nominations Committee of the Board was constituted with the 4 Non-Executiv e Committee of objective of identif y ing independent directors to be inducted on the Board Directors the Board and to take steps to ref resh the constitution of the Board f rom time to time

Donations The Donations Committee reviews and approves donations to non- Managing Director Committee and gov ernmental organisations/non-prof it institutions on basis of need and Corporate merit. The CSR Committee rev iews, monitors and guides the CSR work social undertaken across all locations Responsibility Committee

26 Tata Motors Ltd. Corporate Sustainability Report 2007-08

The relationship between the Board, the Committees and the senior management functions is illustrated 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

27 Tata Motors Ltd. Corporate Sustainability Report 2007-08 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 Com m ittee 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 between 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 allowances (fixed component), incentive remuneration and commission (which are major variable components depending on the performance parameters) to its 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 April 1, annually. The Company has not issued any stock options to its 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

28 Tata Motors Ltd. Corporate Sustainability Report 2007-08 to the Notice of the General Meeting. The Annual Report contains details 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 limits prescribed under the Companies Act, 1956. Appropriate disclosures are made in the notice of the General Meetings. The Annual Report also contains details of the remuneration paid to the Directors - both Executive and Non-Executive Di re cto rs. Process to avoid conflicts of interest

To ensure that no conflict 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 listed companies, is also available on the website of the Securities and Exchange Commission and the Company. The 20-F Annual Report contains information on five-year financial data under US GAAP; risks a sso cia te d wi th the Company’s business; investments in the Company and relating to ADRs; a business overview which includes sections on the Indian econom y and the autom otive m arket and competition; business strategy and operations; a complete product profile; production facilities and distribution network; R&D initiatives; intellectual property; legal proceedings; organisation structure; subsidiaries and affiliates; operating and financial review and prospects; capital expenditure incurred and sources of financing; details of the auditors; Board composition and management; governance structure; shareholding pattern; dividend policy; share and ADR price; rights of shareholders; exchange control policy of the Government and taxation as relevant to investors; Chief Executive Officer and Chief Financial Officer certification to the investors and audited consolidated financial statements for the last three years.

To ensure that the Company has disclosed relevant, accurate and complete information to its investors so as to ensure that the Company’s financial condition and results of operations in all material respects have been disclosed on a timely basis under the applicable laws, the Company recently constituted a Disclosure Committee comprising of the senior management as also 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 • Ability to bring in the external perspective • Relation to the Company and Board

29 Tata Motors Ltd. Corporate Sustainability Report 2007-08

Nomination by Articles of Association, Debenture holders, financial institutions, virtue of technical collaboration and financial agreement

Internally Dev eloped Mission, Code of Conduct and Values

Being a global player, Tata Motors has ensured that its 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 all 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 overseeing the organisation's identification and management of economic, env ironmental, and social risks and opportunities

The Board takes responsibility for the total process of risk management in the organization. The Audit Committee reviews with the Management, External and Internal Auditors, the adequacy of internal control systems. It reviews management letters / letters of internal control weaknesses issued by Statutory / Internal auditors. The Management implements actions to mitigate residual risks. The Board assures all 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 sustainability of the Company’s operations under normal and adverse operating conditions; the reliability of the Company’s reporting and the Company’s responsible behaviour towards all stakeholders.

Evaluating 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 en su re achievement of objectives. The control environment comprising of values, ethics, management

30 Tata Motors Ltd. Corporate Sustainability Report 2007-08 philosophy, employee competence, etc. supports risk management. The risks a re asse sse d o n a n 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 fre q ue n cy. Al l ri sks a re cl assi fi e d as p e r pro ce sses i n th e “E n te rpri se P roce ss M anual”. Certain clusters of risks are treated as priority clusters. The Audit Committee reviews the mitigation action taken against these risks o n a p e ri od i c b a sis. A l so , oth e r ri sks wh i ch m a y ma te ri a l i ze m a y al so b e accorded priority if they are critical. Pertinent information on risk assessment and control activities is communicated effectively to employees. The line 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 B o a rd p ro vid e a ba l a n ced a sse ssm e n t of si g n ifi ca n t ri sks, a ba l a n ce d assessm e n t of th e effectiveness of the system of internal controls in managing those risks an d i d e nti fy si g ni fi ca n t failings/weaknesses, its 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 responsibility 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 allocation 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 a re l ogged 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.

31 Tata Motors Ltd. Corporate Sustainability Report 2007-08

Audits are conducted by way of Self Assessment Questionnaires or through full fledged audits. The Audit Committee reviews audit reports every quarter. Audit Reports are classified as Section A and Section B type reports. 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 Initiatives

Tata Motors is a signatory of the United Nations Global Compact. By adhering to this voluntary initiative, the Company commits itself 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 mem ber of CII (Conference of Indian Industries), BCCI (Bom bay Chambers of Com m erce and Industries) and ASSOCHAM (Association of Chambers of Commerce of India).

Stakeholder Engagement

Approach

Engagement of Identify their Pri ori ti ze Address concerns and issues in Stakeholders: concerns and concerns and Meetings, feedbacks, Strategy Planning Interactions, etc Is su es is sues Process

Set Goals, targets Steering Committee Ba lanced Strategic R evi ew an d Scorecard & Direction corrective action I nit iat ive s

Report and communicate to all stakeholders (Ann ual Report, Cha irman & Learning & sharing ED le tters/GRI & Corpo rate ac ros s an d im pr ove Gove rnance reports, etc)

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 aligned with stakeholder concerns has been provided in Annexure I (Stakeholder Engagement Chart).

32 Tata Motors Ltd. Corporate Sustainability Report 2007-08

5

Economic Management Approach and Performance Indicators

33 Tata Motors Ltd. Corporate Sustainability Report 2007-08

MANAGEMENT APPROACH

Risks and concerns identified for the economic performance of the company are enumerated below:

Interest rates and credit availability: Consumer interest rates witnessed an upward movement in the second half of FY 07-08. Further tightening of the liquidity position, non-availability of vehicle finance and firming up of interest rates would affect vehicle demand, which could impact the 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 volatility in the foreign exchange markets could significantly impact profits.

Freight Rates: Moderation in industrial activity, slowdown in freight movement and increase in fuel price would adversely impact vehicle operators’ margins to the extent not recovered through increase in freight rates. 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 rail freight corridor connecting major cities could impact the demand of comm ercial vehicles for goods transportation. However, it is expected that with the growth in road infrastructure and increase in vehicle penetration and with product offerings suitable for different applications, road transport would continue to have a dominant role and offer flexible, speedy and point-to-point service.

Domestic market: The commercial vehicle industry due to its strong linkages with the economy would be impacted by slowdown in economic growth. The Company has strengthened its less cyclical businesses like passenger carriers, small and light trucks and passenger cars as well as its spare parts and other service offerings to counter moderation in demand. The increasing trend of offering price discounts in the market could also affect the Company’s margins.

Overseas 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 its supply chain due to any natural calamities and work stoppages at its suppliers’ end due to load shedding, labour problems, etc.

New Competition: Intensity of competition has increased in almost all the segments of the Indian automotive market due to entry of new players and expansion plans of existing ones. The Company is aware of the increasing competition and is taking measures to remain competitive in the market place.

34 Tata Motors Ltd. Corporate Sustainability Report 2007-08

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. Timely introduction of new products, their acceptability in the market place and managing complexity of operations across various manufacturing locations would be the key to sustain competitiveness.

Internal Control Systems and their adequacy to manage these risks are highlighted below:

The Company has in place adequate system of internal control. It has documented procedures covering all 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 reliability of financial reporting. The Company has continued its efforts to align all its processes and controls with global best practices in these areas as well.

The Management Approach managing economic risks a nd co n ce rn i s to h a ve 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 all operating and service functions; • State-of-the-art ERP, Supplier Relations Management and Customer Relations Management, connect its 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, conflict 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 multidisciplinary 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, if 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 responsibility for the total process of risk management in the organisation. The Audit Committee reviews reports covering operational, financial and other business risk areas. Through an Enterprise Risk Management programme, each Business Unit addresses opportunities and the attendant risks through an institutionalized approach that is aligned to the Company’s objectives. This is also facilitated by internal audit. The business risks are m a naged through cross functional involvement and intense communication across businesses. Results of the risk assessment and residual risks are presented to the senior management.

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EC 1: Direct Economic Value Generated

Distribution of Revenue (INR in crores – 1 crore=10millions)

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

36 Tata Motors Ltd. Corporate Sustainability Report 2007-08

Summarized Balance Sheet (Rupees in Millions)

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 Liability (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

37 Tata Motors Ltd. Corporate Sustainability Report 2007-08

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 (ii) Tax on Proposed Dividends 812.5 (iii) 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 millions.

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, Employability 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 millions. 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 profitability. A brief profile 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 millions, which is 45% higher to the previous year. PAT increased by 78% and stood at Rs. 1531.1 millions as against Rs. 974.6 millions in 2006-07.

Telco Construction Equipment Company Limited (Telcon) is engaged in the business of manufacturing and sale of construction equipment and allied services in which the Company has 60%

38 Tata Motors Ltd. Corporate Sustainability Report 2007-08 holding and Hitachi Construction Machinery Company Limited, Japan, holds 40%. During the year, the Company divested 20% of its stake to Hitachi, thus reducing its stake from 80% to the present 60%. With the increase in economic activity especially in the infrastructure sector, Telcon recorded its best performance to date having sold 7,698 machines with a Profit After Tax of Rs. 3240 millions.

Tata Marcopolo Motors Limited (TMML) is engaged in the business of manufacture and sale of fully built buses and coaches in which the Company has a 51% holding with the balance 49% being held by Marcopolo S.A., Brazil. The Company started its commercial production from November 2007 and has sold 190 low entry CNG buses. TMML recorded a net turnover of Rs. 65.7 millions and loss after tax is Rs. 38.3 millions.

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 its 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 millions.

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 millions, with Profit Before Tax of Rs. 502.6 millions exceeding the 2006-07 figures by 150%.

Tata Technologies Limited (TTL), along with its 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 its lines 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 millions 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 facilities and infrastructure based at Jamshedpur. With the rise in demand for Medium and Heavy commercial vehicle over the years, major improvement

39 Tata Motors Ltd. Corporate Sustainability Report 2007-08 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 its turnover of Rs. 1919.8millions in 2007-08, PAT being Rs. 474.4 millions. HVAL recorded a turnover of Rs. 2032.4 millions and a PAT of Rs. 634.1 millions.

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 millions and Profit After Tax was Rs. 162.2 millions.

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 i o n s with PAT of Rs. 53.3 millions.

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. T M IBSAL has received a licence from Insurance Regulatory and Development Authority (IRDA) to act as Direct Broker under the IRDA Act on May 13, 2008. Pending the issue of licence, no business was carried out during the period of October 2005 to M arch 2008.

Tata Motors European Technical Centre plc. (T MET C) is a 100% subsidiary of the Company engaged in the business of design engineering and development of products for the automotive industry. Working synergistically with the Company, TMETC provides it with design engineering support and development services, complementing and strengthening the Company’s skill sets and providing European standards of delivery to the Company’s passenger vehicles. TMETC earned gross revenues of Rs. 1279.5 millions and an operating profit of Rs. 114.3 millions as against Rs. 70.8 millions in 2006-07.

Associate Companies

Automobile Corporation of Goa Limited (ACGL) in which the Company has a 37.79% shareholding was incorporated in 1980, jointly with EDC Limited, a Government of Goa enterprise. ACGL 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 April 2, 2008 and is one more step towards confirming the strong motivation and understanding between the partners towards developing new opportunities in India and abroad.

Tata Cummins Limited (T CL), 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.

40 Tata Motors Ltd. Corporate Sustainability Report 2007-08

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 received incentive package by the State Government for setting up the manufacturing unit of the Small Car (Nano) in Singur, West Bengal in 2007-08. However, before the incentives could be utilized, the plant was shifted to a new location – Sanand, Gujarat, India. This shift occurred as there was lack of safety of its employees and equipments in the hostile environment created by constant attacks on colleagues and property in the region. The Company has also benefited from the incentives 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 developed an extensive vendor park in the region as well, 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 life that the individual can enjoy in the society.

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

T he process for sourcing has m any 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 will not consider a vendor or potential vendor that does not have the required list of certifications, including the compliance with factories Act, audited by the government for confirmation. Following that there are visits, succeeded by visit reports. A check-list 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 willing 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 little needs to be bought in. If products do need to be bought in, often they will 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.

41 Tata Motors Ltd. Corporate Sustainability Report 2007-08

EC 7: Procedure for local hiring

In India, citizens have the freedom of domicile 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 lie 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 economic impacts, including extent of impacts

Wor ldwide, Tr ansport sector has emer ged as the biggest employer * 1 Commer cial 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: Dir ect and Indirect Employment

Tata Motor s recor ded its highest ever sales of 585,649 vehicles (352,785 commer cial; 232,864 passenger). The approximate indirect economic impact generated by the company in 2006-07 is summarised below

1,058,355 232,864 23,230

18,000 5000 10,300

Employment Employees in Employment Direct Indirect Indirect em ployment through social generated through Subsidiar ies Employees employment fr om from commercial initiatives * channel par tners passenger ca r s ** vehicles*** * Includes initiatives to enhance employability (vocational and technical tr aining, apprenticeship programmes), promotion of co-operatives and formation of Self-Help Groups ** On assumption that one passenger car sold cr eates employment for at least one per son – dr iver /cleaner *** On assumption that one commer cial vehicle sold cr eates employment for at least thr ee peop le – Dr iver and cleaner /help er & loader

42 Tata Motors Ltd. Corporate Sustainability Report 2007-08

6

Environment Management Approach and Performance Indicators

43 Tata Motors Ltd. Corporate Sustainability Report 2007-08

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

Key Steps in - Outputs Inputs ‘Environment Management’ • Im pr ov em ents in

envir onmental • National & International • Assess the significant envir onmental aspects of per for mance (e.g.: Legislation & pr otocols products and activities reduction in pollution; • Quality & Envir onmental • Set ‘Contr ol Processes’ and ‘Objectives & e.g.: r eduction in natur al Policy Tar gets’ r esour ce consumption; • Rules & Regulations • Deploy the pr ocess and implement ‘Action Plans’ e.g.: elimination of to achieve ‘Objectives & Tar gets’ including hazardous material etc.) • Plant level waste disposal guidelines. Climate Change r elated issues • Compliance to envir onmental • ISO:14001 • Review pr ocesses for impr ovements / and conduct internal / external audits r equir ements as per • New developments statutory nor ms • Review the process • Global developments such • Reduce CO2 emissions / as Climate Change incr eased car bon offsets

How it operates (M ethods/ Practices) [Cross Ref.: EMS M anual at respectiv e locations] Performance Measur e Unit

1. Assess the ‘significant’ environmental aspects of products and activities as per established EMS procedures- Efficiency

• All Pr ocess Ow ners identify the ‘significant’ envir onmental Impr ovement over pr evious years Ratio aspects of products and activities with the help of ERC centrally ‘environmental per for mance’ & Environment Group at respective Works locations. (TISHD*)

* TISHD – Tata Index for Sustainable 44 2. Define Operational Controls, Emergency Action Plans and set Hum an Dev elopm ent ‘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 Effe ctive ne ss Tata Motors Ltd. Corporate Sustainability Report 2007-08

E

All our manufacturing facilities (Pune, Jamshedpur, Lucknow and Uttarakhand) have been certified to the ISO:14001 – Environmental Management System (EMS) Standard. At Jamshedpur the Engineering, Health Care & Civic Services to Tata Motors Township have also achieved certification to ISO:14001.

EN 1: Total materials 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 manufacturing units in India, viz. Jamshedpur, Pune and Lucknow

EN 2: Percentage of m aterials used that are recycled input m aterials

Re-cycling of material is best illustrated 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,

45 Tata Motors Ltd. Corporate Sustainability Report 2007-08

Collapsible, custom-built polypropylene (PP) boxes have been developed for bought out components that are bulky and light (e.g.: dashboards). These PP boxes can be dismantled, flattened and returned to vendors for re-use, eliminating the use of virgin packaging material each time. With a cycle time of more than 150 trips these polypropylene boxes have resulted in significant savings on component packaging.

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 “Recyclability of automotive Systems & Components”. It is also working with Society of Indian Automobile Manufacturers (SIAM) as a member of task force to study recyclability 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.

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

Total Direct used (in Million MJ) 2339.25

Total Indirect used (in Million MJ) 2556.11 * Data includes two main manufacturing 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 its manufacturing units. Apart from reducing operational costs, the energy saved amounts to environment protection by way of

46 Tata Motors Ltd. Corporate Sustainability Report 2007-08 avoiding pollution due to power generation processes. Energy conservation is driven throughout the organization, by way of setting Division-wise targets and monitoring performance on everyday basis for optimizing energy consumption.

Company has started several Energy Accounting and Energy Conservation programmes, some of which are highlighted below: • Introducing Fiber Reinforced Plastic blades for man-coolers. • Installing variable speed drive for flow control and energy saving • Introduction of fuel additives in Furnace Oil to improve the combustion efficiency of the fuel. • Soft-start energy savers for hydraulic press motors • Sheds designed for efficient natural lighting. • Use of compact fluorescent lamps, sodium vapours lamps to minimize energy consumption. • Installing portable compressors for isolated running to save compressed air • Harnessing natural daylight by installing translucent roof sheets in workshops • Use of Liquefied Petroleum Gas in place of Light Diesel Oil and Electricity for heating, wherever applicable. • Installation of Turbo Ventilators in forge and Foundry to extract fumes which do not require energy to operate

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

1. Technical committee for “Air quality monitoring, emission inventory and source apportionment studies for Indian cities” constituted by Central pollution control board, Delhi 2. Group on “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 retrofit demonstration project” constituted by National environmental engineering research institute, Mumbai 4. Multi stakeholder committee to “Develop Better environmental sustainability targets for lead battery manufacturers” constituted by development alternatives, Delhi in collaboration occupational knowledge international, UK and national referral center for lead poisoning, India 5. Steering committee for “Mobile Air conditioning Assessment project” constituted by The Energy Research Institute (TERI), Delhi

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

The Environment Challenge: The demand for energy has grown along with rapid industrial growth. Studies have forecast a shortage of fossil fuel worldwide leading to ultimate extinction, when natural deposits will be completely depleted. Fossil fuel based conventional power generation is recognized as a major contributor to environmental pollution and to the Greenhouse Effect.

Wind Power 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 fossil fuels such as coal and fuel oil.

Wind Power Dev elopment in Maharashtra: T he estim ated 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.

47 Tata Motors Ltd. Corporate Sustainability Report 2007-08

Use of Wind Pow er at Tata Motors, Pune: M /s Suzlon Energy Ltd. installed & comm issioned 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 were auctioned through the Chicago Carbon Exchange (CCX) and purchased by M/s Eco-Securities Capital Ltd., Ireland

It is to be further noted that T ata Motors is working with the steering com mittee of National Hydrogen Energy Board, India, to find ways in which India may harness hydrogen potential energy of future.

EN 8: Total water use

Total water consumed during 2007-08 was 6222080 m3 Total water withdrawal by source in 2007-08 was 605057 m3 (P.S. T he above figures are for three m anufacturing units of T ata Motors, viz. Jamshedpur, Pune and Lucknow only)

EN 9: Water sources significantly affected by w ater w ithdraw al

T here is no direct withdrawal of water from the source river Subranarekha at Jam shedpur. Raw water is taken from M/s JUSCO (Jamshedpur Utility Services Company) of Tata Steel and treated in works and town water filter plant. All water consumed at Pune manufacturing unit is sourced from State Utility-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 allowing it to remain at the relative surface of the ground.

EN 10: Total recycling and reuse of water

Water Conservation Activities: They comprise the following broad areas- Water Management System Intake Management Maintenance of water distribution network Quality of water (portability checks) Optimization and leakage surveys Water re-circulation systems Water boosting systems Clean production processes. Rain water harvesting projects

48 Tata Motors Ltd. Corporate Sustainability Report 2007-08

EN 11: Location and size of land owned, leased or managed in biodiversity rich habitats

While the facilities 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 facilities 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 major impacts 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, fit 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 impacts 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 villages of Singhbhum (E) district namely Kanikola, Jaskandih, Patherchakri and Narayanpur • GVKJ has been appointed as Regional Resource Agency for the 15th consecutive year to co- ordinate the National Environmental Awareness Campaign (NEAC) • A good number of Forest Protection groups formed. to maintain the status quo of biodiversity

49 Tata Motors Ltd. Corporate Sustainability Report 2007-08

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 with 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 Emissions

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 2007-08 (CO2, Thousand Tonnes) Jamshedpur 233.10

Pune 280.26

Lucknow 23.87

Indirect GHG emissions 2007-08 (CO2,Thousand Tonnes) 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: GH G F oot print As s es sm ent R eport f or Tat a Motors Lt d. by M/ s ER N ST & Y OU N G, 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 nil SOx emissions. 2 bullets of 100 Metric Tonnes capacities each are under installation phase.

50 Tata Motors Ltd. Corporate Sustainability Report 2007-08

• Clean Development Mechanism (CDM): Taking opportunity of the CDM mechanism, Tata Motors Ltd. initiated action for 20.85MW Wind Power Projects installed & commissioned at Satara and Supa. • Project Information Note (PIN) and Project Design Document (PDD) for 20.85MW Wind Power Project was prepared with the help of 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, successfully traded the CERs through e-bidding on the Chicago Climate Exchange. • Plantation of different varieties of trees in factory complex is done to sequester significant carbon emission • Replacement of conventional energy with cleaner energy alternatives/renewable energy sources in plant activity and process.

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 its 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 Emissions by type

Suspended Particulate Matter (SPM) 3 2007-08 Limit : 500 microgram/m Jamshedpur Manufacturing unit Annual Average 280.00 Pune Manufacturing unit Annual Average 182.66 Lucknow Manufacturing unit Annual Average 187.04

Sulfur Dioxide (SO2) 3 2007-08 Limit : 120 microgram/m

Jamshedpur Manufacturing unit Annual Average 7.21 Pune Manufacturing unit Annual Average 11.03 Lucknow Manufacturing unit Annual Average 11.09 Nitrogen all Oxides (NO) 3 2007-08 Limit : 120 microgram/m Jamshedpur Manufacturing unit Annual Average 45.12

51 Tata Motors Ltd. Corporate Sustainability Report 2007-08

Pune Manufacturing unit Annual Average 12.47 Lucknow Manufacturing unit Annual Average 12.83 Respirable Particulate Matter (RPM) 3 2007-08 Limit : 150 microgram/m Jamshedpur Manufacturing unit Annual Average 129.09 Pune Manufacturing unit Annual Average 63.88 Lucknow Manufacturing unit Annual Average 66.06

EN 21: Total water 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, all 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 ch e cks a re ca rri e d ou t b y Sta te P ol l u ti o n Co n tro l Bo a rd , wh i ch are a l so found to be within the permissible limits. At Lucknow manufacturing unit, all 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)

Jamshedpur Manufacturing Unit 4.1099

Pune Manufacturing Unit 0.95265 Bio-Chemical Oxygen Demand (BOD)

Jamshedpur Manufacturing Unit 13.03

Pune Manufacturing Unit 35.81 Chemical Oxygen Demand (COD)

Jamshedpur Manufacturing Unit 107.63

Pune Manufacturing Unit 176.81

52 Tata Motors Ltd. Corporate Sustainability Report 2007-08

EN 22: Total amount of waste by type and destination

At Jamshedpur manufacturing unit: • Paint sludge generated at Centralized Paint Shop is removed from the scrub water with a ‘Hydropac syste m ’ for e ffe ctive se p ara ti o n . Th e wa te r i s re -use d i n th e p a i nt 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 Filter is provided for removal of sludge from phosphating bath. • Incinerator model LRD-250 of capacity 250 kg /hr has been installed to incinerate hazardous waste without production of smoke or odour and to enable all 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 eliminator, 30-m self-supported, rubber- lined chimney, PLC controlled panel board and Flue gas analyzer

At Pune manufacturing unit: All hazardous wastes are disposed through an Authorised Common Hazardous Waste Treatment Storage and Disposal Facility (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 Facility to the final disposal point. The wastes are disposed by various pathways depending on their hazard characteristics. These disposal pathways include - direct incineration, direct landfill and landfill 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 spills of chemicals, oils or fuels in the reporting period. A systematic effort is underway to quantify and define what could be termed as a “significant spill” based on the nature of the hazardous chemical, quantity stored, extent of pipeline network and the age of installation.

EN 24: All production, transport, import, or export of any waste deemed “hazardous”

No hazardous wastes are being imported or exported. However, the Hazardous wastes generated in various production processes like waste or used oil, 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

53 Tata Motors Ltd. Corporate Sustainability Report 2007-08

Hazardous Wastes (Management & Handling) Amendment Rules 2003 to ensure the following statutory requirements: • Endorsement of the Hazardous Waste quantity sold in authorised buyer's Pass Book as per the authorized recycling capacity mentioned • Label properly the Hazardous Waste containing consignment • Fill up and sign the 6 coloured copies of MANIFEST (Form -9) and send to the concerned as mentioned in the copies • Hand over the TREM CARD (Transport Emergency Card) to the Transporter

EN 25: Impacts of activities and operations on protected and sensitive areas

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

EN 26: Initiatives to mitigate environmental impacts 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 life cycle of an automobile, from excavation of raw materials to recycling of end- of-life 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 m ild hybrid to full electric vehicle to hydrogen fuel cell vehicle.

54 Tata Motors Ltd. Corporate Sustainability Report 2007-08

(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 like Scroll compressor, smaller heat exchangers and high-efficiency condensers, low GWP refrigerants, etc. and reducing refrigerant leakage and refrigerant recovery system during servicing.

Reducing Ozone Depletion:

CFC-12 having potential for ozone depletion is no longer used as refrigerant in AC system of our product since 1996, HFC134a is used as a refrigerant

Reduced Use of Hazardous Substances:

The European Union directive 2000/53/EC on end-of-life vehicles (ELVs), which was proposed by the European Commission and approved by the European Parliament, 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 successfully 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/elimination 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 aligned with European noise regulations and continuously working with international bodies to further improve noise regulations.

Participating in National Committees & Initiativ es Related to Environment:

Representatives of the Company are participating in the following 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 reclaimable at the end of the products useful

Initiatives Taken to Reclaim the Products Sold are as under:

(a) Recyclability and Recoverability Regulation at “End of Life” of vehicle:

a. Meeting European directive on “recyclability” and “hazardous substances”. b. Providing technical information on dismantleability of the vehicle to the dismantler for use at “End of life vehicles”.

(b) Extended drain period for axle and gearbox oils: Vehicle Trials for further enhancement in the drain period of axle & gearbox oil are in progress.

EN 28: Incidents of and fines for non-compliance with all applicable international declarations / conventions / treaties, and national, sub-national, regional and local regulations associated with 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: Environmental Impacts of transporting products and other goods and materials used for the organisation’s operations and transporting members 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 environmental expenditure

Total environmental expenditure in 2007-08 on various environment development initiatives at our manufacturing units was Rs. 169 millions.

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7

Social Management Approach and Performance Indicators

57 Tata Motors Ltd. Corporate Sustainability Report 2007-08

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 all levels, extensive training and skill enhancement activities were carried out especially at the new locations, in line with the Company’s expansion and growth plans. Company’s cordial industrial relations were maintained at all times and the Company entered into three wage settlement with its union. There has been consistent improvement in productivity across all locations.

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.

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

Strategic Alignment Strategy Execution Lea dership / Gro wt h Pillar Pillar & Development Pillar S T R A T E G I C E L E M E N T S

Or ganisation al & Chan ge St ru ctur e, Comp et enc ie s, Engagement, Capability Building; Ma npo we r Pla nning , Perfo rmance Mg mt., Deployment Con seq ue nce M gmt . M ana ging & Industrial Relations Expanding Talent Base A C T I V I T I E S At tr act , Sel ect and Communicate, Engage, Identify, Train / Bu sines s Vision Deploy Re war d, R ec ogni s e, Develop,De vel Grow, op / Gro Rotate w Strategy Union -Mg t Re latio nsh ip D E L I V E R A B L E S Str ate gy-Str uct ure Mat ch, Engagem ent, Superior Orgn. Capability, Agility Fa mily Size, Efficiency, PeCommunicate, rf orma nce, Mot Reward, iva tion , Future Leadership, Ef fe ctiven ess , Rete nt ioRe n, cognP rod is uct e ive & International Mindset cord ial relat ions hip S Y S T E M SS Y S T E M S S Y S T E M S F E E D B A C K

Core Valu es

Labour issues are managed by Employee relations department at each manufacturing location, which forms a part of the human Resources Department. Within a manufacturing unit, there are

58 Tata Motors Ltd. Corporate Sustainability Report 2007-08

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 skill 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

Tota l Workforc e by Re gion 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 like graduation, post graduation etc. Operatives refer to workmen who have requisite technical qualification employed for direct production activities

LA 2: Total rate of employee turnover

Tata Motors’ Annual Attrition Percentage for various grades is as follows:

Executive 3.4 % Managerial 10.4 %

LA 3: Benefits provided to full-time employees that are not provided to temporary or part-time employees

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 em ploym ent or on term ination of em ployment of an am ount 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

59 Tata Motors Ltd. Corporate Sustainability Report 2007-08 accounts for the liability for gratuity benefits payable in future based on an independent actuarial valuation.

(ii) Superannuation The Company has two superannuation plans, a defined benefit plan and a defined contribution plan. An eligible employee on April 1, 1996 could elect to be a member of either plan. 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 liability for superannuation benefits payable in future under the plan based on an independent actuarial valuation. With effect from April 1, 2003, this plan was amended and benefits earned by covered employees have been protected as at March 31, 2003. Employees covered by this plan are prospectively entitled to benefits computed on a basis that ensures that the annual cost of providing the pension benefits would not exceed 15% of salary. The Company maintains a separate irrevocable trust for employees covered and entitled to benefits. The Company contributes up to 15% of the eligible 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. (iii) 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 certified 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 liability for BKY benefits payable in future based on an independent actuarial valuation.

(iv) Post-retirement Medicare Scheme Under this scheme, employees get medical benefits subject to certain limits of amount, 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 liability 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 shortfall in the fund assets based on the government specified minimum rates of return or pension and recognises such contributions and shortfall, if any, as an expense in the year incurred.

(vi) Compensated absences 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 limits, for future encashment. The liability is provided based on the number of days of unutilised leave at each balance sheet date on the basis of an independent actuarial valuation.

Some other benefits advanced to the permanent employees are: • Allowances like Transport allowance, Education allowance, Sanitation allowance, Leave travel allowance etc • Annual Performance linked Payment • Free Medical facility for family • Company loans & advances

LA 4: Percentage of employees covered by collective bargaining agreement

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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 all permanent workmen present. At Uttarakhand, which is our new manufacturing unit location, compensation of the operatives is decided on the basis of industry and region parity and in consultation with Works Committee formed from time to time.

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

For Notice period regarding operational we follow 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 April 1947.

LA 6: Formal Joint Management-Worker Health and Safety Committees

Tata Motors has a Safety Health and Environment (SHE) policy, which encompasses all 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 Safety committees at plant location

These committees thus cover 100% of the workforce.

LA 7: Injury, accidents, work-related fatalities

Our practices are in line 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 fit in framing or in reviewing their own safety regulations. The above guidelines are, however, incorporated in the Factories Act 1948 and the Company strictly follows 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 community members regarding serious diseases

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

61 Tata Motors Ltd. Corporate Sustainability Report 2007-08

following 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 allowed to work in our Factory until 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 confidentiality is maintained about HIV +ve status of any employee

Tata Motors started its AIDS awareness programme with the primary aim to cover all employees and to make them aware about the causes, symptoms, myths and prevention of HIV/AIDS. Company doctors designed a 30 minutes lecture module and delivered it to all employees on the shop floor, followed by distribution of informative booklet on AIDS. All expenses for the designing and implementation of the programme were borne by the Company.

In addition, Tata Motors supports a hospital in Jharkhand state and also runs Mobile Health Clinics in various villages 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 M anav Samaj (NJM S) in Jamshedpur, Jhar khand. The ser vices extended have contributed towar ds the reduction of leprosy pr evalence rate in Jamshedpur down fr om 22/1000 to 2.2/1000.

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Photo: Mr . Jowahar Ram Paswan, a beneficiar y of the NJMS pr ogr amme and now a full-time volunteer with NJMS, with a patient at the ashram

Rehabilitation work for leprosy-affected people is carried out by the Nav Jagrat Manav Samaj in Jamshedpur. 8 ashrams situated around the city of Jamshedpur, which are self-settled 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 like rearing of livestock, poultry, cycle-rickshaw, cart and even growing vegetables and selling them. A temporary hospitalization facility with 28 beds is available for the treatment of seriously afflicted patients of leprosy. A 30-bedded Old Age Home run by NJMS 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 certified 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 sa fe ty ri sks. It wa s d eve l oped by the Government of India in response to widespread demand for a recognized standard against which to be certified and assessed.

In addition, Tata Motors manufacturing unit at Pune has been certified 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

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LA 11: Skill Management 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 all levels and teams. Monthly and mid-course half yearly reviews are held to ensure resources; targets and training are in alignment 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 instills 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 filled 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)

Compensati on A Target Setting Revi ew Proces s proces s and overall review

Employee & Senior Employee & Senior Employee & Seni or Mi d cour se B Target setting at individual Mid year re view c orrection in level and training nee d & fee dback to identified employee line with business needs Rewards, Comp ensati on, Performance Car eer planning & based Ratings Annual review development and overall and and feedback system feedback Normalisation Senior Leadership and Senior Leadership & HR Employee & Senior HR (Inputs to HR Pl an)

Creating High Performance

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High Potential Star s Counseling, skill Challenging growth ma tch ing , opportuniti es, career

→ FTSS Grooming planning, mentoring Solid citizens Non Performers Locate in ste ady Po tential Dese lction function, retain and Talent Mg mt annually evaluate potential 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

@ Fast Tr ack S elec tio n Sc heme i s TM / EG Talent management, ident ified as best practice and @ Fast track sel ec tion learned by other group companies Engineer / Internal officer trainee scheme Supervisors Master craftsman, Mechatroni cs sc heme

Bargainable to Sup scheme Barg ainab le SVCVP scheme, Master craftsman, Mechatronics scheme LA 13: Gender Diversity by Employee category

Gender Diversity by Employee category

Male Female Executive 658 13

Manager ial 5898 226

Supervisory 2730 141

Oper atives 13270 294

LA 14: Ratio of basic salary of men to women by employee 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 followed a non- discrimination policy in employment and compensation. Remuneration is not based on gender, social status or age and is linked to responsibility levels and performance.

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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: Human 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 fulfilled before final selection into the Tata Motors fold. The company periodically audits the job contractors for adherence to labour laws and other statutory requirement like minimum wages, PF, payment of gratuity etc. thereby ensuring prevention of violation of Hum an rights and employment malpractices.

HR 3: Employee training on Policy and Procedures concerning Human Rights

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Tata Motors adheres to the Tata Code of Conduct in its business. Tata Code of Conduct has covered all 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, it 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.

T ata M otors is com mitted to protect the Hum an Rights of its em ployees while dealing with them in all the activities falling under the relationship of ‘Employer’ and ‘Employee’.

Decision to seek employment rests with the individual only, and it is completely voluntary. Tata Motors does not and will not allow or encourage Compulsory or Forced Labour in any of its processes and practices.

Tata Motors respects the right of its eligible employees to organise for the purpose of Collective Bargaining as well as their right to support or oppose the labour union recognised by Tata Motors.

Tata Motors respects the definition of Child Labour as mentioned in the guidelines of International Labour Organisation. Tata Motors will not engage any person under the age of 18 years (legal age of employment) for any operations or services (as presented in law) unless it is part of government approved job training or apprenticeship programme.

Tata Motors honours the right of its employees to choose and decide the extent of their involvement in Political Activities in their Personal Time.

Tata Motors expects its Channel Partners and Contractors to adhere to business principles consistent with its own.”

Each new joinee receives a copy of the TCoC. Furthermore, Excerpts from the Code is prominently displayed at all locations and employees are well aware of its components and adhere to it in letter as well as in spirit.

HR 4: Incidents of Discrimination:

The Company has a “Policy on Equal Opportunity and Non-Discrimination in Employment”, which sta tes:

“As part of its Recruitm ent Practices, T AT A MOT ORS is com m itted to provide Equal Opportunity to all eligible applicants for employment without any discrimination against their gender, race, religion, caste, colour, ancestry, marital status, nationality and disability. Opportunity for employment will be solely based on eligibility 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 its fold, the Human Rights principles, which thus get monitored during the process of monitoring of the former. Employees, as well as outsiders, have the liberty to raise concerns if any, related to the Tata Code of Conduct and the Human Rights Policies thus. Ethics Counsellors, who are present at all locations, address these concerns.

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In relation to the process of managing the business ethics, it 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 reliable 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. All employees of the Company are eligible to make Protected Disclosures under the Policy.

For the year 2007-08, 95 of the 115 ethical concerns received were resolved the same year. The remaining 20 are being reviewed.

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

In keeping with the spirit of the Constitution of India wherein Right of Association is a Fundamental Right, Tata Motors respects the right for association of its employees and has constructive relationship with trade unions at all 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 its 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, all eligible 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. Pr ocedur es involving infor mation, consultation and negotiation with employees Interaction Level Frequency

Business Unit Level Annual M anaging Dir ector , Executive Dir ector (Business Unit Head) Plant Head M onthly Senior VP/ Direct Reports P er iod ically Divisional Level M onthly GM/ Direct Reports Factory/Department Level M onthly Divisional Head/ Factor y Head/ HR Weekly Centr e of Excellence owners / HRO Need Based one-to-one inter action Issues not resolv ed in lower levels are appropriately escalated to higher levels.

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 Certified Standing Orders of the Company expressly state that the age of an employee at the time of recruitment should be 18 years or more.

M oreover, the Com pany is actively involved in im proving 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 especially from tribal families are given financial assistance. 1800 students through 33 schools and institutions of social and cultural development are supported through the Shiksha Prasar Kendra, a 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 Accountability standards through SA8000 which audits the company and its supply chain for forced/compulsory labour, possibility of child labour, minimum wages, payment of wages, etc.

In addition, the Tata Code of Conduct, referred to earlier, also has clauses on these two principles.

The disciplinary action process at Tata Motors is as per the applicable laws like Model Standing Orders / Certified Standing Orders that allow the process of natural justice as per statute.

Description of appeal practices

P ROCES S FOR HANDLING REPRESENTATI ON & APPEALS MADE BY EMPLOYEES & EXEMPLYEES

RECEIPT OF REPRESENTATIONS & APPEALS THROUGH HE AD OFFICE / S R.V P (JSR & L KO) '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

Grievance handling Mechanism

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EM PLOYE ES

BARGAINABLE NON BARGAINABLE

TAL K TALK TALK TALK TALK WRITE WRITE

UN IO N LI STEN I NG ETHICS HOTLI NE RE PR ESE NTA TI VE POS T COUNSELLOR

SUPERVISOR / CX COORDINATING OW NER / DI V H EAD AUTHORITY H R O FFI CE RS / MANAGER SR V I CE PR ES ID EN T

CONCERNED AGENCY / DIVISION

HR 9: Rights of Indigenous People:

Government of India considers all 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 Responsibility structure, which involves the top management as well the employees and is driven by the objective of “improving the quality of life of people”. The structure catering to the needs of the society, which the Company treats as the very purpose of its business and not just another stakeholder, is as under:

Institutionalizing CSR

Donations Committee Two pillar s of the CSR CSR Committee Activities w ithin Support institutions C Rev iew, monitor and guide thr ough donations on the CSR wor k under taken basis of need and merit LOCTIONAL CSR across all locations

Jamshed Pune Lucknow Pantnagar Small Car Non Plant pur

SO 1: Managing Impacts on Communities

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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 life 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 skills and expertise and assist the needy. This is in line 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 all its CSR initiatives, the Company recognises and respects diverse community needs by undertaking specific and need-based initiatives across locations, while deploying global standards and policies.

A sum m ary of the impact created by several com munity development initiatives in the year 2007-08 is detailed 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 illegal payments, remuneration, gifts, donations or comparable benefits which are intended to or perceived to obtain business or competitive favours for the conduct of its business. However, a Tata Company and its employees may accept and offer nominal gifts which are customarily 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 all of the following criteria:

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

Gifts, received or offered, will be restricted to items of nominal value, like 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 politely 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 its core value of Integrity. Towards this commitment, Tata Motors will ensure that neither the Organisation nor its Em ployees 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, detailed earlier.

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

As stated earlier, the TCoC training covers all employees and it has within it 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 all locations and all employees are made aware on the process to redress grievances, if any.

SO 6: Contributions and Participation in Political Parties

Tata Motors maintains its neutral stance in terms of politics and has no political alignments and/or inclinations. Thus, there are no financial or non-monetary grants made to any political party.

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

No such legal actions have been filed.

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: Customer Health and Safety

Tata Motors has been putting in a lot of effort to improve the safety (active and passive). The Company always meets all the safety regulations of concerned markets and goes beyond the safety regulations to provide better safety products – example being ACE has been designed to meet more stringent crash safety norms that are not applicable to that class of products. 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 facility.

PR 2: Total number of incidents of non-compliance with regulations concerning health and safety impacts of products and services

Our record of compliance with regulatory requirements pertaining to emissions, safety, product labelling, 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 instituted and structured as a New Product Introduction (NPI) business process to integrate various functions of the com pany. NPI is aim ed 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 facilities to address specifically the issues of customer health and safety. It has facilities like Crash Test facility for safety and the Hemi Anechoic chamber for NVH and engine emission testing. These facilities enable development of products meeting safety and environmental regulations.

Examples of special features used in our products for preserving customer health and safety include Anti-skid braking systems; Air Bags; Ergonomically designed seating systems with lumbar support; Euro III complaint engines etc; Non-Chloro Fluro Carbons based vehicle air conditioners.

Tata Motors obtains test certificates for vehicle worthiness and other safety related issues like emission, brakes, noise etc. before the product is marketed through government authorised agencies.

T ata M otors also obtain Hom ologation certificates for export m arkets from authorized test agencies. Labelling 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 certificate of compliance to the above directives based on the declarations obtained by SQIG from the suppliers.

PR 6: Adherence to Regulations regarding Marketing Communications

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 will ensure that the promotion of its 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 all its processes pertaining to marketing communication and no false claims and/or unfair means are used while promoting a product/service.

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PR 8: Complaints regarding violation of Consumer 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 its 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 will not be divulged to or shared with other individuals/institutions without the prior written permission from customers.

Tata Motors is committed to designing processes and practices that ensure continued trust of its cu stom e rs.”

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