TOWARDS TOMORROW BOMBAY HOUSE, 24 HOMI MODY STREET, MUMBAI 400 001 www.tatamotors.com Tata Motors Jamshedpur Manufacturing Facility 71st ANNUAL REPORT 2015-2016 WHAT’S INSIDE CORPORATE OVERVIEW STATUTORY REPORTS 01 Mission, Vision and Values 46 Notice 02 Corporate Information 74 Board’s Report 04 Chairman’s Message 118 Management Discussion & Analysis 06 Managing Director’s Message 166 Corporate Governance Report 08 Board of Directors 185 Business Responsibility Report 12 Highlights 16 Innovation at Tata Motors FINANCIAL STATEMENTS Standalone Financial Statements Jaguar Land Rover’s Business 18 Design Language The strengths of Jaguar Land Rover F.1 Independent Auditors’ Report 20 Product Sustainability include iconic globally positioned F.8 Balance Sheet brands, a strong product portfolio 22 Connected Vehicles of award winning luxury and high F.9 Statement of Profi t and Loss performance cars and premium 24 Advances in Engines all-terrain vehicles, a global F.10 Cash Flow Statement 26 Corporate Social Responsibility distribution network, strong product F.12 Notes to Accounts development and engineering 30 Awards + Accolades capabilities and a strong 32 Presence Across Markets Consolidated Financial Statements management team. F.43 Independent Auditors’ Report 34 Financial Performance F.48 Balance Sheet 38 Summarised Balance Sheet and Statement of Profi t and Loss F.49 Statement of Profi t and Loss (Consolidated) F.50 Cash Flow Statement 40 Summarised Balance Sheet and Statement of Profi t and Loss F.52 Notes to Accounts (Standalone) Subsidiary Companies 42 Funds Flow — Last Five Years F.87 Financial Highlights 43 Financial Statistics ANNUAL GENERAL MEETING Tata Motors’ Business Date: Tuesday, August 9, 2016 Time: 3.00 p.m. Tata Motors have progressed in key Venue: Birla Matushri Sabhagar, 19, Sir Vithaldas Thackersey Marg, areas of engineering, manufacturing, Mumbai 400 020 world-class sales and service support, for an overall superior customer experience. 71st Annual Report 2015-16 MISSION VALUES We innovate, with passion, mobility solutions to enhance • Integrity quality of life • Teamwork • Accountability • Customer Focus • Excellence • Speed VISION As a High Performance Organization, we are, by FY2019 • Among the Top 3 in Global CV and Domestic PV • Achieving Sustainable Financial Performance • Delivering Exciting Innovations 01 CORPORATE INFORMATION CHAIRMAN EMERITUS Mr Ratan N Tata BOARD OF DIRECTORS Mr Cyrus P Mistry Mr Mayank Pareek Non Executive Director and Chairman President (Passenger Vehicle Business Unit) Mr N N Wadia Non Executive, Independent Director Dr Timothy Leverton President and Head, Dr R A Mashelkar Advanced and Product Engineering Non Executive, Independent Director Mr Gajendra Chandel Mr S Bhargava Chief Human Resource Officer Non Executive, Independent Director Mr Shailesh Chandra Mr N Munjee Vice President Corporate Strategy Non Executive, Independent Director & Business Transformation Mr V K Jairath Ms Minari Shah Non Executive, Independent Director Head - Corporate Communications Ms Falguni Nayar (Associate Member of ExCom) Non Executive, Independent Director Dr Ralf Speth OTHER SENIOR MANAGEMENT Non Executive Director Mr Prasann Chobe Mr Guenter Butschek Sr Vice President CEO and Managing Director (Head Mfg Operations, CVBU) Mr Ravindra Pisharody Mr Girish Wagh Executive Director (Commercial Vehicles) Sr Vice President (PPPM, PVBU) Mr Satish Borwankar Mr Abhijit Gajendragadkar Executive Director (Quality) Sr Vice President (Business Planning and Controlling) ExCom Mr R Ramakrishnan Sr Vice President Mr Guenter Butschek (Product Strategy and Planning & Customer Value) CEO and Managing Director Mr Nagesh Pinge Mr Ravindra Pisharody Vice President (Internal Audit) Executive Director (Commercial Vehicles) COMPANY SECRETARY Mr Satish Borwankar Executive Director (Quality) Mr H K Sethna Mr C Ramakrishnan Group Chief Financial Officer 02 71st Annual Report 2015-16 Corporate Information Chairman’s Message Managing Director’s Message Board of Directors (02-03) REGISTERED OFFICE WORKS Bombay House, 24, Homi Mody Street, Mumbai 400 001 Jamshedpur Tel: +91-22-66658282 Pune Fax: +91-22-66657799 Lucknow Email: [email protected] Pantnagar Website: www.tatamotors.com Sanand Dharwad AUDITORS Deloitte Haskins & Sells LLP SHARE REGISTRARS (Registration No. 117366W/W — 100018) TSR Darashaw Limited 6-10, Haji Moosa Patrawala Industrial Estate 20, Dr E Moses Road, Mahalaxmi, Mumbai 400 011 CORPORATE IDENTITY NUMBER (CIN) Tel: +91-22-66568484 L28920MH1945PLC004520 Fax: +91-22-66568494 Email: [email protected] Website: www.tsrdarashaw.com BANKERS Allahabad Bank ICICI Bank Andhra Bank IDBI Bank Bank of America Indian Bank Bank of Baroda Kotak Mahindra Bank Bank of India Karur Vysya Bank Bank of Maharashtra Punjab National Bank Central Bank of India Standard Chartered Bank Citibank NA State Bank of India Corporation Bank State Bank of Mysore Deutsche Bank State Bank of Patiala Federal Bank Union Bank of India HDFC Bank United Bank of India Hongkong and Shanghai Banking Corporation 03 Corporate Overview Statutory Reports Financial Statements CHAIRMAN’S MESSAGE Dear Shareholders, country. The shadow of NPAs continue to haunt the Indian financial The Financial Year 2015-16 was one of continued global volatility sector even as the sector is all set to grow with new financial across different markets. The fall in oil prices and commodities institutions. have had varied impact across different companies and countries. The China slowdown continues to be an important global For the Tata Motors Group, 2015-16 was a year of mixed results but economic factor. it was important to note the return to profitability. It was therefore a turnaround year, backed by strong Jaguar Land Rover growth The news was more positive for India with robust GDP growth, despite challenges, as well as the start of the turnaround for Tata making the country one of the fastest growing economies Motors standalone. worldwide. The sustained start-up environment has also played an important role in bringing in global and domestic investment, Jaguar Land Rover continued to show strong global sales, despite opening up new opportunities and also helping to carry economic the China slowdown. It showed a strong growth in the key markets development beyond just the tier one cities. Moreover, there is, of North America and Europe. Its strong revenue growth reflected rightly so, a greater thoughtfulness towards investing in new or the demand for the new models such as Land Rover Discovery emerging companies with a greater attention to the right business Sport, Jaguar XE and XF, that helped the Company add new models. This is a positive sign of a more mature and responsible customers to both brands across UK, Europe and North America. economy. Jaguar Land Rover’s solid financial performance through last year was clearly showcased by its selling more than half a million cars in Nonetheless there remain key challenges. The continued delay of one year for the first time. some of the tax reforms continue to pose operational bottlenecks in a more streamlined movement of goods and services across the Last year, it thus produced and sold more cars than at any time in its history. Its vehicles have received more than 140 awards for design, technology, safety and environmental sustainability. Besides winning the accolade of ‘Best UK Employer’ by Bloomberg, Jaguar Land Rover is one of the UK’s largest exporters, with more than 80 percent of its revenue coming from exports. There was good news for the Tata Motors standalone business as well. Tata Motors M&HCV business showed sustained growth for a year to lead the turnaround of the Indian business. Within this while some segments like the multi-axle vehicles and tractor Jaguar Land Rover’s solid financial performance through last year was clearly showcased by its selling more than half a million cars in one year for the first time. Last year, it thus produced and sold more cars than at any time in its history. 04 71st Annual Report 2015-16 Corporate Information Chairman’s Message Managing Director’s Message Board of Directors (04-05) trailers emerged as the key growth drivers, the tipper segment saw strong improvement in the JD Power Customer Satisfaction also started showing signs of recovery with demand coming Index, as we moved up to the third rank in the industry. primarily from coal mining regions. After the launch of advanced new platforms like Prima and Ultra, the launch of Signa in the last We are all becoming used to unpredictable and dynamic market quarter of 2015-16 ensures that we lead from the front in bringing environments, learning to manage by anticipating customer the most advanced technology to mainstream trucking. We expect needs, leveraging strong processes and building competitive this growth to sustain especially with the planned infrastructure product portfolios and networks. The new financial year will not projects now getting into execution. Strong GDP growth and be any different in the challenges it will pose, especially as the consumer sentiment will also help sustain this momentum as will continued sway of technology is impacting the entire industry as the upcoming regulatory changes. consumer behaviour undergoes significant change. The recent Brexit Referendum will also add some uncertainty to the world of As one of the world’s largest bus manufacturers, with the most global business, but we are confident we can see through it with complete range of transit vehicles, meeting careful