BUSINESS RESPONSIBILITY REPORT
Vide its Circular dated August 13, 2012, SEBI mandated the inclusion of Business Responsibility Report (BRR) as a part of Annual Report for top 100 listed entities based on their market capitalisation on BSE Limited and National Stock Exchange of India Limited as on March 31, 2012. The said reporting requirement is in line with the 'National Voluntary Guidelines on social Environmental and Economic Responsibilities of Business (NVGs)' notified by Ministry of Corporate Affairs, Government of India, in July 2011. Pursuant to the above, the Stock Exchanges amended the Listing Agreement by inclusion of Clause 55 providing a suggested framework of a BRR, describing initiatives taken by the Company from an environmental, social and governance prospective in line with the press release and FAQs dated May 10, 2013, issued by SEBI, the Company's BRR is hosted on the Company's website www.tatamotors.com. Any shareholder interested in obtaining a physical copy of the same may write to the Company Secretary.
FINANCE
During the year, the free cash flows for Tata Motors Group were Rs. 3,643 crores, post spend on capex, design and development of Rs. 31,540 crores. Tata Motors Group's borrowing as on March 31, 2015, stood at Rs. 73,610 crores (As at March 31, 2014: Rs. 60,642 crores). Cash and bank balances and investments in mutual funds stood at Rs. 46,174 crores (As at March 31, 2014: Rs. 39,206). With healthy profitability and cash flow generation, the Consolidated Net Automotive Debt to Equity Ratio stood at 0.19 as at March 31, 2015, as compared to 0.07 at March 31, 2014.
The Cash flows from operations were negative at Rs. 2,563 crores for standalone operations of the Company. Spend on capex, design and development were Rs. 2,706 crores (net). The borrowings of the Company as on March 31, 2015 stood at Rs. 21,134 crores (As at March 31, 2014: Rs. 15,053 crores). Cash and bank balances stood at Rs. 945 crores (As at March 31, 2014: Rs. 226 crores).
The Company has issued 4.625% Senior Unsecured Notes of US$500 million due in 2020 and 5.750% Senior Unsecured Notes of US$250 million due 2024. The proceeds have been used to refinance existing External Commercial Borrowing (ECB) of the Company aggregating US$500 million and balance proceeds for being used to incur new additional capital expenditure and other permitted purposes as per RBI ECB guidelines.
The Company issued rated, listed, unsecured, non-convertible debentures of Rs. 2,600 crores and also raised Rupee loans of Rs. 506.89 crores to meet its capex requirements.
The Company prepaid Tranche 4 of Rs. 1,250 crores of Secured, Rated, Credit Enhanced, Listed, 2% Coupon Non-Convertible Debentures (NCDs) inclusive of premium on redemption and prepayment of Rs. 768.38 crores.
At Jaguar Land Rover, post spend on capex, design and development of GB£2,767 million (Rs. 27,282 crores), the free cash flows were GB£860 million (Rs. 8,479 crores) for Fiscal 2015. The borrowings of the Jaguar Land Rover as on March 31, 2015, stood at GB£2,537 million (Rs. 23,456 crores) [previous year: GB£2,010 million (Rs. 19,331 crores)]. Cash and financial deposits stood at GB£4,263 million (Rs. 39,414 crores) [previous year: GB£3,458 million (Rs. 33,257 crores)]. Additionally, JLR has undrawn committed long term bank lines of GB£1,485 million (as per IFRS). Jaguar Land Rover issued 4.250% Senior Notes of USD 500 million due 2019, 3.50% Senior Notes of USD 500 million due 2020 and 3.875% Senior Notes of GBP 400 million due 2023. The proceeds are used for general corporate purposes, including support for the on-going growth and capital spending plan and for prepayment of 8.125% Senior Notes due 2021 (USD 410 million) and 8.25% Senior Notes due 2020 (GBP 500 million).
TML Holdings Pte Ltd, Singapore, a 100% subsidiary of the Company, holding the investment in Jaguar Land Rover and other foreign subsidiaries issued 5.750% Senior Notes of US$300 million due 2021. Tata Motors Finance Limited raised Rs. 50.30 crores by an issue of unsecured, subordinated perpetual non-convertible debentures towards Tier 1 and Tier 2 Capital and Rs. 235 crores by an issue of unsecured, subordinated non-convertible debentures towards Tier 2 Capital in order to meet growth strategy and improve Capital Adequacy ratio.
Tata Motors Group has undertaken and will continue to implement suitable steps for raising long term resources to match fund requirements and to optimise its loan maturity profile.
During the year, the Company's rating for foreign currency borrowings was revised upward to "Ba2" Stable by Moody's and was retained with an improvement in the outlook by Standard & Poors to "BB"/Positive. For borrowings in the local currency, the ratings was retained by Crisil at "AA"/Stable and was revised upwards by ICRA to "AA"/Stable. The Non-Convertible Debentures and Long Term Bank facilities i.e. (Buyers Credit) rating by CARE was retained at "AA+"/Stable. During the year, Jaguar Land Rover's rating was retained with an improvement in the outlook by Moodys to "Ba2"/Positive and by Standard & Poors at "BB"/Positive. For Tata Motors Finance, CRISIL has maintained its rating on long-term debt instruments and bank facilities to CRISIL "AA/A1+"/Stable.
FIXED DEPOSITS
The Company has not accepted any public deposits during Fiscal 2015. There were no over dues on account of principal or interest on public deposits other than the unclaimed deposits as at the year end.
EXTRACT OF ANNUAL RETURN
As provided under Section 92(3) of the Act, the details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as Annexure-1.
INFORMATION TECHNOLOGY AND DIGITAL PRODUCT DEVELOPMENT INITIATIVES
a. Information Technology Initiatives
The Company harnesses the potential of Information Technology for enabling the business functions and strives to create a competitive advantage through its maximum use. The Company leverages its strong partnerships with product and services companies to support business growth and innovation, which enable the Company to strengthen its core technology capabilities and be the industry pioneers in various technology adoptions.
The major highlights of IT at the Company are:
- commemorated 15 years of the SAP implementation, in strengthening and automating its business processes. The Company has been one of the early adopters of ERP in the country and continues to evolve its ERP capabilities.
- has undertaken a major program to digitize its supplier workflows from design to contracting. It is also a key player in AutoDx, the EDI initiative under the SIAM ACMA umbrella.
- won many awards including the IDC Leadership award, Cloud Icon, Automotive Icon, Industry influencer awards etc.
- implemented demand planning and management systems for vehicles as well as spare parts to improve availability and lower inventories.
- implementing a mobility strategy with mobile security, testing, collaboration apps, analytics apps, sales force apps, telematics apps, and International Business custom apps.
The Tata Motors group Companies are being mapped in order to leverage the economies of scale in procurement extension of TML global contract to its subsidiaries.
b. Digital Product Development Systems Initiatives
The Company has constantly adopted new technologies and practices in digital product development domain, to drive improvements in productivity and quality, by process optimization to meet product targets.
The Company implemented latest versions of core design software tools and PLM, delivering improved feature sets and reduced design cycle time. Key enhancements in product design domain include modular approach to piping design and wiring harness, introduction of Systems Engineering as a new domain in PLM.
For improving the product quality, the Company focused on realistic product visualization for better decision making, development of new knowledge based engineering (KNEXT) applications such as passenger safety systems and additional 18 new applications, enhanced and efficient high performance computing for quick results through resource optimization and pre-post automations, digitization of existing factories enabling what-if analysis for new product manufacturing.
For improving process control and collaboration, 29 new applications were developed and implemented with home-grown pFirst application framework. As part of this, systems were developed to manage WCQ, CPA, Craftsmanship, and Design change request domains.
Subsidiaries
Jaguar Land Rover (JLR):
JLR continues to take business benefits through its Business Transformational Initiative, i-PLM, delivered through a strategic partnership with a leading software technology provider. At the core of i-PLM solution is a 'Single Source of Truth', author once, consume everywhere philosophy. This Vision and the close alignment with the partner's software platform, delivers a simplified Product Creation Landscape that eliminates inefficient integration issues at source. As part of this transformational journey, one vehicle programme was considered for migration from its legacy systems. In this,
- All solution elements delivered with some elements deployed across all vehicle programmes.
- All data has been migrated with user adoption nearing completion. Hyper-care is in place to manage the BOM driven cultural change.
- Training facilities fully functional, with 1,618 unique people trained in the classroom and 3,468 through e-learning.
- The support processes & team are active with a customer satisfaction running at 97%.
Tata Daewoo commercial vechicles (TDCV):
Legacy computing infrastructure for PLM was migrated to the latest, highly available virtualized platform. Existing Engineering Release System (ERS) migrated to the new platform with enhanced data synergy in PLM.
Tata Motors European Technical Centre (TMETC):
Legacy computing infrastructure for PLM was migrated to the latest, highly available virtualized platform with centralized storage. Virtual validation capability was augmented and TMETC worked on robustness analysis of the product.
Tata Technologies Limited (TTL):
TTL invested in strategic technologies aligned with its business goals and customer needs, resulting in prudent investment in state-of-the-art software and hardware technology while delivering solution and service to all internal and external stakeholders. TTL deployed a new powerful and scalable high performance computing cluster in both UK and Hinjewadi with best in class technology.
TECHNOLOGY AND ENVIRONMENT FRIENDLY INITIATIVES
- Fuel efficiency improvement by implementing On-Off strategies for auxiliaries in different drive modes of vehicle operation.
- Development of API CI4+ 15W40 engine oil enhancing oil drain interval leading to customer delight. Improvement in engine oil to enhance oil drain interval helps customer to reduce cost of ownership. It helps in reducing downtime and less oil is discarded reducing environmental impact.
- Continuation of fuel efficiency improvement initiatives on Passenger & Commercial engines through software features in engine management system & vehicle level parameter optimisation (e.g. Economy mode feature in Zest).
- Producer Gas Engine development using producer gas from bio-mass available in rural area.
- Emission-free public mobility – Trolley Bus/fast charging bus concept is being developed. These buses will offer better efficiency and operational freedom compared to Battery Electric Buses.
- Tata Magic and Tata Iris electric vehicles were demonstrated in Auto Expo 2014. A fleet of small number of electric vehicles is under homologation.
- Collaborative initiative to investigate sustainable synthetic fuels for India and developing nations.
- Designed, developed and demonstrated Hydrogen fuelled, zero emission fuel cell bus for urban transportation. Further testing is in progress at Sanand, Gujarat and further 3 buses are being built.
CONSOLIDATED FINANCIAL STATEMENTS
Tata Motors announces consolidated financial results on a quarterly basis. As required under the Listing Agreement with the Stock Exchanges, Consolidated Financial Statements of the Company and its subsidiaries, prepared in accordance with Accounting Standard 21 issued by the Institute of Chartered Accountants of India, form part of the Annual Report and are reflected in the Consolidated Financial Statements of the Company. Pursuant to Section 129(3) of the Act, a statement containing the salient features of the financial statements of the subsidiary companies is attached to the Financial Statements in Form AOC-1. The Company will make available the said financial statements and related detailed information of the subsidiary companies upon the request by any member of the Company or its subsidiary companies. These financial statement will also be kept open for inspection by any Member at the Registered Office of the Company and the subsidiary companies.
Pursuant to the provisions of section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries, are available on the website of the Company.
SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES
Tata Motors had 76 (direct and indirect) subsidiaries (11 in India and 65 abroad) as on March 31, 2015, as disclosed in the accounts.
During the year, the following changes have taken place in subsidiary companies:
Subsidiary companies formed/acquired:
- Shanghai Jaguar Land Rover Automotive Services Company Limited was incorporated with effect from March 10, 2014.
- Jaguar Land Rover Limited acquired JDHT Limited with effect from February 2, 2015.
- Cambric Corporation merged into Cambric Holdings Inc with effect from December 31, 2014.
- Cambric Holdings Inc. merged into Tata Technologies Inc with effect from December 31, 2014.
- Tata Motors Finance Limited acquired Rajasthan Leasing Private Limited with effect from January 19, 2015 and renamed it as Tata Motors Finance Solutions Private Limited on March 18, 2015.
Companies ceasing to be subsidiary companies/ceased operations:
- Land Rover Group Limited liquidated with effect from June 30, 2014.
- Cambric Managed Services Inc. dissolved with effect from September 9, 2014.
Name changes
- Cambric Consulting SRL was renamed as Tata Technologies SRL with effect from February 4, 2015.
Capital Re-structuring
- Shareholding in PT Tata Motors Indonesia alongwith its subsidiary, were transferred to TML Holdings Pte. Limited with effect from October 20, 2014.
- Shareholding in Tata Motors (Thailand) Limited increased from 94.36% to 95.28%.
- Tata Hispano Motors Carrocera S.A., a non-operational subsidiary transferred its shareholding in Tata Hispano Motors Carrocerries Maghreb SA to the Company with effect from June 23, 2014.
Besides the above, Jaguar Land Rover continued to integrate/restructure legal entities for manufacturing and for exporting globally as combined brand legal entities. Other than the above, there has been no material change in the nature of the business of the subsidiary companies.
Associate Companies
As at March 31, 2015, Tata Motors had 6 associate companies as disclosed in the accounts. During the year the following changes were witnessed therein:
- Tata Hitachi Construction Machinery Company Pvt. Ltd. was converted from a Public Ltd. company with effect from March 5, 2015.
Joint Ventures
As at March 31, 2015, Tata Motors had 6 Joint Ventures as disclosed in the accounts. During the year the following changes were witnessed therein:
- Tata Cummins Private Limited was converted from a Public Ltd. company with effect from December 16, 2014.
- Fiat India Automobiles Pvt. Limited was converted from a Public Ltd. company with effect from January 19, 2015.
The Company has adopted a Policy for determining Material Subsidiaries in line with Clause 49 of the Listing Agreement. The Policy, as approved by the Board, is uploaded on the Company's website (URL: www.tatamotors.com/investors/pdf/material.pdf).
ENERGY, TECHNOLOGY & FOREIGN EXCHANGE
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Act, read along with Rule, 8 of the Companies (Accounts) Rules, 2014, is annexed as Annexure-2.
CORPORATE GOVERNANCE
A separate section on Corporate Governance forming part of the Directors' Report and the certificate from the Practicing Company Secretary confirming compliance of Corporate Governance norms as stipulated in Clause 49 of the Listing Agreement with the Indian Stock Exchanges is included in the Annual Report.
DIRECTORS
Pursuant to Section 149(10) of the Act, read along with the Rules framed thereunder, the Members had at the Annual General Meeting of the Company held on July 31, 2014, approved the appointment of Independent Directors (viz Mr N Munjee, Mr V K Jairath, Ms Falguni Nayar) from July 31 2014 to July 30, 2019 i.e. for 5 consecutive years, except for Mr Nusli Wadia, Dr Raghunath Mashelkar and Mr Subodh Bhargava who shall be retiring on February 14, 2019, December 31, 2017 and March 2, 2017 respectively on attaining the age of 75 years in accordance with the retirement age of Directors. Further, pursuant to the Sections 149(13) and 152 of the Act, provisions for the retirement of rotation of directors shall not apply to such Independent Directors.
Mr Ravi Kant stepped down as the Vice Chairman and Director of the Company with effect from June 1, 2014 in accordance with the Companies Policy for Retirement Age of Directors. Mr Kant had by his stewardship and guidance significantly contributed to the Company's growth and global aspiration. He had played a stellar role in the Jaguar Land Rover's acquisition and its turnaround and guiding many of the Company's key initiative and strategies. The Board placed on record its appreciation for the contribution made and role played by Mr Kant over the last 14 years on the Board of the Company.
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act and Clause 49 of the Listing Agreement.
In accordance with the provisions of the Act and the Articles of Association of the Company, Mr Satish Borwankar retires by rotation and is eligible for re-appointment.
Post demise in January 2014 of Mr Karl Slym, the then Managing Director, the Board is actively engaged in a talent search and recruitment process for filling up this critical leadership position. In the meantime, the Company operates through Corporate Steering Committee (CSC) that meets regularly to oversee the Company's operations. The Committee is headed by the Chairman of the Board and its other members comprise Mr Ravindra Pisharody, Mr Satish B Borwankar, Mr C Ramakrishnan, Dr Timothy Leverton, Mr Mayank Pareek and Mr G Chandel. The CSC met 19 times in Fiscal 2015.
The Company has incurred loss for the Fiscal Year 2015. Accordingly, the disclosure required under Schedule V, Part II, proviso of Section II B (iv) (IV) of the Act, is annexed herewith as Annexure-3.
KEY MANAGERIAL PERSONNEL
During the year under review, the Company has designated following personnel as KMPs as per the definition under Section 2(51) and Section 203 of the Act.
- Mr Ravindra Pisharody, Executive Director (Commercial Vehicles)
- Mr Satish Borwankar, Executive Director (Quality)
- Mr C Ramakrishnan, Chief Financial Officer
- Mr Hoshang Sethna, Company Secretary