Notice

PREFACE TO THE ANNUAL GENERAL MEETING NOTICE

1. SUMMARY OF PROPOSALS UNDER ITEM NOS. 5 TO 8 OF THE NOTICE:
   1. APPROVAL FOR APPOINTMENT AND PAYMEMT OF REMUNERATION TO CHIEF EXECUTIVE OFFICER AND MANAGING DIRECTOR (CEO and MD)
   2. RE-APPOINTMENT AND PAYMENT OF REMUNERATION TO EXECUTIVE DIRECTORS

• Members' approval is now being sought (vide Special Resolutions) for:-
  • Appointment of Mr Guenter Butschek, as Director as set out in the Resolution No. 5 and CEO and MD w.e.f. February 15, 2016, for a tenure of 5 years and payment of remuneration, including minimum remuneration as set out in the Resolution No. 6.
  • Re-appointment of Mr Ravindra Pisharody, Executive Director (Commercial Vehicles) for a tenure from July 1, 2016 to November 24, 2020 and Mr Satish Borwankar, Executive Director (Quality) for a tenure from July 1, 2016 to July 15, 2017 and payment of remuneration, including minimum remuneration to them on terms similar to the Ordinary Resolutions passed by the Members at the Annual General Meeting held on August 10, 2012, except for certain changes as set out in the Resolution and Explanatory Statement at Item Nos. 7 and 8.

In respect of proposals at Resolution Nos. 5 and 6

• The proposals for the appointment of Mr Guenter Butschek, as Director w.e.f. the date of Annual General Meeting and CEO and MD w.e.f. February 15, 2016, for a tenure of 5 years and payment of remuneration, including minimum remuneration are in the context of the following: -
  • Over the last couple of years, the Company has been going through a set of unprecedented circumstances i.e. sustained industry wide lower demand, heightened competitive pressures from global OEM's, flux in regulatory environment, drop in profitability & productivity and a sudden demise of the Late Karl Slym, Managing Director on January 26, 2014. Given below are the financial highlights on the turnover and profits for the last 5 years:
    
  • Previous year figure have been regrouped wherever necessary to correspond with the current year classification
  • The Company is in the midst of an organizational transformational initiative in response to the above
  • Given these challenges and strategic priorities, the Company was looking for an outstanding organizational level leader, who could provide strategic direction and create suitable execution framework to ensure the organisation's success, both for short term and long term basis. After interviews by Nomination and Remuneration Committee ("NRC") Members of various Executives with large scale global automotive experience along with some exposure to complex restructuring/turnaround programs and cultural transformation initiatives, Mr Butschek had been identified and the Board appointed Mr Butschek as CEO and MD w.e.f. February 15, 2016.
• Mr Butschek, aged 55, graduated in Business Administration and Economics with a diploma from the University of Cooperative Education Stuttgart, Germany. Mr Butschek joined the Company after his last assignment at Airbus Group where he served as Chief Operating Officer and Member of the Group Executive Committee. Prior to Airbus, Mr Butschek worked at Daimler AG for more than 25 years in international automotive management. He held several positions in logistics, human resources and procurement in the automotive and aerospace industries in various geographies, significantly being South Africa, Netherlands, China and France. He was responsible for various restructuring and transformational turnaround initiatives with significant improvements in performance, quality, and productivity. For detailed information on Mr Butschek's profile and achievements, please refer to Mr Butschek's profile given in the "Statement containing Additional Information" as part of the Explanatory Statement.
  • The Company has taken various initiatives, to maintain its leadership, improve market share and financial performance. It has been aggressively pursuing and implementing its strategies to improve volumes and reduce costs through launch of new products (particularly in passenger vehicles planned since July 2014) coupled with sales, services, marketing campaigns and customer engagement programs.
• In particular, the following initiatives are being taken by Mr Butschek alongwith the leadership team:
  • Major strategic and operational transformation for significant and sustained improvement in the overall business and financial performance comprehensively covering all areas of the Company's operations like Company strategy, platform and product strategy, manufacturing, supply chain, employee and managerial productivity, cost reduction and efficiency improvements, improved effectiveness in sales & marketing and customer satisfaction/relationships and breakthrough improvements in achieving world class quality standards.
  • The 8 pillars of transformation initiatives under the following categories for setting the agenda and targets are under implementation:
    1. Enhancing the brand perception of Tata Motors
    2. Providing unique and delightful customer experience
    3. Excellence in delivery of new products
    4. Delivering reliable and high quality products with focus on world-class quality processes
    5. World-class manufacturing
    6. Agile and cost-effective supply chain
    7. Cost competitiveness
    8. People processes and organization structure

It will be worthwhile to note that under the above 8 pillars, the Company has over a 100 individual initiatives on which various cross functional teams of high performers across the organization have been identified and deployed.

• Mr Butschek leads all operations of Tata Motors in India which, inter-alia, include South Korea, Thailand, Indonesia and South Africa, but excluding Jaguar Land Rover which continues to be managed independently. The consolidated revenues from these operations is above Rs. 50,000 crores.
• Taking into consideration the size and complexity of the Company's global operations, the enormous responsibility for oversight of the Tata Motors' Group (excluding Jaguar Land Rover business) and the qualifications and accomplishments of Mr Butschek and based on the recommendation of the NRC, the Board of Directors (the "Board"), at its meeting held on January 18, 2016, subject to the approval of the Members and the Central Government, appointed Mr Butschek as an Additional Director. Pursuant to the provisions of Section 161(1) of the Companies Act, 2013 (Act), the Rules framed thereunder and the Articles of Association of the Company, Mr Butschek would cease to hold office at the ensuing Annual General Meeting but would be eligible for appointment as a Director. Notice under Section 160 of the Act has been received from a Member signifying his intention to propose Mr Butschek's appointment as a Director and the Members' approval is sought for the said proposal given in the Resolution No. 5. At the said meeting, the Board also appointed Mr Butschek as the CEO and MD of the Company for a period of 5 years pursuant to Sections 196, 197 and other applicable provisions, if any, read together with Schedule V to the Act and the Rules framed thereunder on the terms and conditions as given in the Resolution No. 6.
• While details on remuneration of Mr Butschek have been stated in the Resolution No. 6 of the Notice, the remuneration in monetary terms is as under:


Note: Remuneration of Rs. 2724.98 lakhs from February 15, 2016 to February 15, 2017 in US$ equivalent is US$ 4,057,221 (1USD=Rs. 67.1687 as on May 30, 2016) The remuneration is denominated in € converted into R on the date of payment. Foreign Exchange Rate is assumed at a constant of 1€ = 75, except for FY2015-16 where it is paid on actual basis.

• Remuneration of Mr Butschek is commensurate with the remuneration of expatriates appointed at CEO/MD levels of similar sized multinationals taking into consideration the responsibilities shouldered by him. Mr Butschek's remuneration is based on his past remuneration and has been subjected to peer level benchmarks for global automotive OEMs as per survey conducted by Aon Hewitt, an independent consultant. The table below illustrates the requisite comparative data of the CEO remuneration in the global industry at the time of his appointment: