Tata Motors AR

Corporate Overview

Financial Statements

Statutory Reports

72nd Annual Report 2016-17

MATERIAL CHANGES & COMMITMENT AFFECTING THE

FINANCIAL POSITION OF THE COMPANY

There are no material changes affecting the financial position of the

Company subsequent to the close of the Fiscal 2017 till the date of

this Report.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE

REGULATORS OR COURTS OR TRIBUNALS

There are no significant material orders passed by the Regulators

or Courts or Tribunal, which would impact the going concern

status of the Company and its future operation. However, Members

attention is drawn to the Statement on Contingent Liabilities and

commitments in the Notes forming part of the Financial Statements.

RISK MANAGEMENT

The Risk Management Committee (RMC) comprising of four

Independent Directors, has been entrusted with responsibility to

assist the Board in (a) overseeing the Company’s risk management

process and controls, risk tolerance and capital liquidity and funding

(b) setting strategic plans and objectives for risk management and

review of risk assessment of the Company (c) review the Company’s

risk appetite and strategy relating to key risks, including credit risk,

liquidity and funding risk, market risk, product risk and reputational

risk, as well as the guidelines, policies and processes for monitoring

and mitigating such risks.

The Committee operates as per its Charter approved by the Board

and within the broad guidelines laid down in it. The Company has

a Risk Management Policy in accordance with the provisions of the

Act and SEBI (Listing Obligations and Disclosure Requirements)

Regulation, 2015 (“SEBI Listing Regulations”). It establishes various

levels of accountability and overview within the Company, while

vesting identified managers with responsibility for each significant risk.

The Board takes responsibility for the overall process of risk

management in the organisation. Through Enterprise Risk

Management programme, business units and corporate functions

address opportunities and the attendant risks through an

institutionalized approach aligned to the Company’s objectives. This

is facilitated by internal audit. The business risk is managed through

cross functional involvement and communication across businesses.

The results of the risk assessment are thoroughly discussed with the

Senior Management before being presented to RMC.

INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO

THE FINANCIAL STATEMENT

Details of internal financial control and its adequacy are included in

the Management Discussion and Analysis Report, which forms part

of this Report.

HUMAN RESOURCES

The Tata Motors Group employed 79,558 permanent employees

(Fiscal 2016: 76,598 employees) as of Fiscal 2017 and the Company

employed 26,035 permanent employees (Fiscal 2016: 26,569

employees) as of Fiscal 2017. The Tata Motors Group has generally

enjoyed cordial relations with its employees and workers.

The Company has labour unions for operative / worker grade

employees at all the plants across India, except the Dharwad Plant.

The labour union at Sanand Plant has recently been registered and

the first settlement is yet to be done. The Company has generally

enjoyed cordial relations with its employees and unions at its factories

and offices and has received union support in the Company’s

implementation of reforms that impact safety, quality, cost erosion

and productivity improvements across all locations. Employee wages

are being paid in accordance with wage agreements that have

varying terms (typically three to four years) at different locations.

With an objective of improving Organizational Effectiveness, the

Company decided to undertake a structure change exercise with

key guiding principles of Empowerment to the Business Units with

clear accountability for business results, strong functional leadership

and oversight for an effective maker-checker concept, improved

and speedier decision making, agility and quick responsiveness to

market, and strong cross functional alignment to drive quick issue

resolution. A new product line organization has been created with

complete Profit & Loss responsibility.

Organisational restructuring has delayered the organization to 5

managerial levels below ExCom. This has made the organization lean

and agile. The Company has also rationalized span of control of key

roles, providing scope for career development and have significantly

increased customer facing roles in both the BUs to enhance customer

centricity in the organization. Transactional roles have been identified

across functions for transition to shared services, and therefore focus

on core activities.

Volumetric study has been performed to identify optimum

manpower at each level, bringing the organizational spread closer

to global standards. This, combined with the Job Evaluation exercise

and Management Audit helped in establishing clear job descriptions

for each role and identifying the right talent for the roles.

The Executive Committee conducted a thorough assessment of

potential candidates for the top 2/3 levels in the organisation. The

assessment results were used for placement of the candidates, which

was followedupwith ‘onboarding’workshops andAstronautTrainings

to prepare the management teams for the new responsibilities.

In order to create a mind-set free of job titles and hierarchy, the

concept of designations has been abolished and individuals will carry

the title of their functional role. After market benchmarking, revised

Compensation & Policies have been rolled-out. The new terms and

conditions of employment has been shared with the employees

through individual letters by respective managers.