Notice

Item Nos. 5 to 8
In respect of Item Nos. 5 and 6 of the Notice dealing with the appointment of Mr Guenter as a Director and the Chief Executive Officer and Managing Director, it is stated that:

Mr Guenter Butschek was appointed as an Additional Director and the Chief Executive Officer and Managing Director (the "MD") of the Company w.e.f. February 15, 2016 (the "Date of Appointment") and was entrusted with the overall responsibility of Tata Motors' operations in India and international markets (but excluding Jaguar Land Rover operations) which, inter alia, included South Korea, Thailand, Indonesia and South Africa. Mr Butschek, 55, graduated in Business Administration and Economics with a diploma from the University of Cooperative Education Stuttgart, Germany.

Having joined the Airbus Group in March 2011, Mr Butschek's last position in this Group was of the Chief Operating Officer wherein he was also a Member of the Group Executive Committee. He was also responsible for its global operations leading a team of 42,000 employees spread across 20 locations (engineering centers, production plants) in 8 countries/geographies and a global supplier network. He reshaped the industrial strategy, empowered operational units, implemented a global operating system, enhanced the end to-end supply chain performance and launched new aircraft types to structurally improve productivity and flexibility.

Prior to Airbus, Mr Butschek worked at Daimler AG since 1984, where he gained more than 25 years of experience in international automotive management. At Daimler, he held several positions in logistics, human resources and procurement in various geographies significant being South Africa, Netherlands and China and was responsible for various restructuring and transformational turnaround initiatives with significant improvements in performance, quality, and productivity. He launched several new production lines for Mercedes, Chrysler, and Mitsubishi products setting the footprint for future profitable growth. For detailed information on Mr Butschek's profile and achievements, please refer to Mr Butschek's profile given in the statement containing additional information.

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), the qualifi cations and accomplishments of Mr Butschek and based on the recommendation of the Nomination and Remuneration Committee, 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 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 Resolution No. 6.

In respect of Item Nos. 7 and 8 of the Notice dealing with the reappointment of Mr Pisharody and Mr Borwankar as Executive Directors and payment of remuneration, it is stated that:

The Members at the 67th Annual General Meeting held on August 10, 2012 had vide Ordinary Resolutions Nos. 9 and 11 approved the appointment of Mr Ravindra Pisharody, Executive Director (Commercial Vehicles) and Mr Satish Borwankar, Executive Director (Quality) of the Company respectively for a period of 5 years commencing from June 21, 2012, including the terms of remuneration payable to them, as enumerated below for ease of reference:

Remuneration:

1. Basic Salary: Upto a maximum of Rs. 7,00,000/- per month with authority to the Board or a Committee thereof to fix the salary and annual increments, which would be effective April 1 every year, as may be decided by the Board, based on merit and aking into account the Company's performance, within the said maximum basic salary amount;
2. Incentive remuneration, if any, and/or commission, based on certain performance criteria to be laid down by the Board; and
3. Benefits, perquisites and allowances as may be determined by the Board from time to time.

Minimum Remuneration: Notwithstanding anything to the contrary herein contained, where in any financial year during the currency of the tenure of the Appointee(s), the Company has no profits or its profits are inadequate, the Company will pay remuneration by way of basic salary, incentive remuneration, benefits, perquisites and allowances, as specified above.

Further, the Members have vide Postal Ballot - Notice dated December 9, 2014, also by Special Resolutions approved of the payment of minimum remuneration to the above Executive Directors in view of inadequacy of losses as calculated under the provisions of Section 198 of the Act, for the FY 2014-15 and FY 2015-16, which remuneration was within the prescribed limits.

Based on the recommendations of the Nomination and Remuneration Committee, the Board of Directors at its Meeting held on May 30, 2016 approved of the re-appointment of the said Executive Directors with the following changes and have recommended the same to the Members of the Company, including the termination of their existing agreements with effect from July 1, 2016:

1. Tenure (being co-terminus with their respective dates of retirement - completion of 65 years):
   • Mr R Pisharody – July 1, 2016 to November 24, 2020
   • Mr S Borwankar – July 1, 2016 to July 15, 2017.
2. Salary scale:
   • Mr R Pisharody - upto a maximum of Rs. 10 lakhs per month (increased from Rs. 7 lakhs)
   • Mr S Borwankar - upto a maximum of Rs. 7 lakhs per month(unchanged).

   The increments, which were previously uncapped, would be limited to 20% of basic salary per annum.

3. Commission, which was previously uncapped, would be within the applicable limits under Section 197 of the Act, but will in any case not exceed 400% of the basic salary.
4. Incentive remuneration, which was previously uncapped, would be paid in case of inadequacy of profits/losses in any financial year which shall not exceed 200% of the basic salary.

Considering the various business cycles wherein the Company may have a situation of inadequate profits as calculated under the provisions of Section 198 of the Act in any financial year during a period of 3 years w.e.f. April 1, 2016, the approval for the payment of remuneration being sought would include the payment of minimum remuneration as per the terms stated in the Resolutions Nos. 7 and 8 of the Notice.

In respect of Item Nos. 6 to 8 of the Notice, it is stated that:

Pursuant to the provisions of Section 197 of the Act, the remuneration payable to any one managing director or whole-time director shall not exceed 5% of its profits as calculated under Section 198 of the Act and if there is more than such director then the remuneration to them shall not exceed 10% of such profits. In case of loss or inadequacy of profits as per Section 198 of the Act, a company may pay remuneration within the limits prescribed under Schedule V of the Act based on its effective capital, subject to shareholders' approval vide a Special Resolution which would be valid for a period of 3 years. Further, any sums paid in excess of the said statutory limits become refundable to the company and is held in trust for the company by the said director, unless the company waives the recovery of the said amount by way of a Special Resolution passed by the Members and such waiver is approved by the Central Government.

The Company recorded a net profit of Rs. 11,023.75 crores on a consolidated basis and Rs. 234.23 crores on a standalone basis for the financial year ended March 31, 2016. However, as per the provisions of Section 198 of the Act, the Company on a standalone basis, had a loss of Rs. 465.05 crores for the said financial year. Further, whilst the Company has improved its performance in FY 2015-16, it may be likely that the Company may have a scenario wherein there are inadequacy of profits under the said provisions of the Act in any of the financial years during the 3 years' period from the date of their appointment/re-appointment. As a matter of abundant caution Members' approval is being sought for payment of minimum remuneration as defined in the said resolutions. For details pertaining to relevant profits, the reasons for losses for FY 2015-16 and steps taken to improve the performance of the Company please refer to Point Nos. 1 and 2 of Item III on 'Other Information' in 'The Statement containing Additional Information as required under Schedule V of the Act' provided below.

Based on the Company's Effective Capital of Rs. 10,169.76 crores as at March 31, 2015, the Company is permitted to pay, on an individual basis, the Executive Directors a maximum remuneration of Rs. 3.18 crores and in respect of the MD Rs. 40 lacs (pro-rated for period from February 15, 2016 to March 31, 2016) for FY 2015-16. Based on the Company's Effective Capital of Rs. 14,411.75 crores as at March 31, 2016, the Company would be permitted to pay Rs. 4.02 crores per director for FY 2016-17 in case if the Company has inadequate profits in the financial year. The Executive Directors' remuneration would be within the said limits in case of no/inadequacy of profits during their said tenure. Considering that Mr Butschek's remuneration would exceed the said limits in case of no/inadequacy of profits in any financial year and that he is a German citizen and non-resident of India, the approval of the Central Government is being sought.

THE STATEMENT CONTAINING ADDITIONAL INFORMATION AS REQUIRED UNDER SCHEDULE V OF THE ACT

1. GENERAL INFORMATION:

1. Nature of industry:

   The Company is mainly engaged in the business of manufacture, assembly and sale of automobile products consisting of all types of commercial and passenger vehicles including spare parts.

2. Date or expected date of commencement of commercial production:

   The Company was incorporated on September 1, 1945 and Commencement of Business Certificate was granted on November 20, 1945. The Company had since commenced its business.

3. In case of new companies, expected date of commencement of activities as per project approved by financial institutions appearing in the prospectus:

   Not Applicable

4. Financial performance based on given indicators:
   

   It may be noticed from the above table that the Company has significantly improved its operating performance and financial results in Fiscal 2016. Coinciding with the improvements in the macro economic scenario and as may be seen from the Company's financial results, the Company has posted EBITDA of Rs. 2,740.15 crores in Fiscal 2016 as compared to negative EBITDA of Rs. 800.01 crores in the Fiscal 2015. New product launches have been stepped up, particularly in the Passenger Vehicle business with the launch of Bolt and Zest in Fiscal 2016 and the Tiago in early Fiscal 2017. Further, in order to deleverage the Company to reduce the borrowing costs, the Company has raised equity from the Promoters and Shareholders to the extent of about Rs. 7,498 crores in May 2015. This helped to curtail the borrowings and reduce interest costs. With more and improved products in the pipeline and the number of initiatives/actions underway, the Company expects to significantly step up its operating and financial performance in the next few quarters and in the coming financial years.

   It may be worthwhile to note that Tata Motors' Standalone financial performance reflects positive results as compared to previous year's loss as stated above under Section 198 of the Act, signifying a turnaround in the Company's performance. Tata Motors' Consolidated financial performance continues to show improvements (except for Q2FY15-16 due to weaker sales in China and product mix and JLR vehicles being damaged due to explosion at Tianjin port).

5. Foreign investments or collaborations, if any:

   The Company has not entered into any material foreign collaboration and no direct capital investment has been made in the Company. Foreign investors, mainly comprising FIIs and ADR holders, are investors in the Company on account of past issuances of securities and secondary market purchases.