Annexure to Board's Report

  2. Statutory Reports
  3. Annexure to Board's Report

ANNEXURE 7

Secretarial Audit Report for the Financial Year ended 31st March, 2017

[Pursuant to Section 204 (1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014)]

To,
The Members,
Tata Motors Limited

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Tata Motors Limited (hereinafter called the Company). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company, the information provided by the Company, its officers, agents and authorised representatives during the conduct of secretarial audit, the explanations and clarifications given to us and the representations made by the Management, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31st March, 2017, generally complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records made available to us and maintained by the Company for the financial year ended on 31st March, 2017 according to the provisions of:

  1. The Companies Act, 2013 (the Act) and the rules made thereunder;
  2. The Securities Contract (Regulation) Act, 1956 ('SCRA')and the rules made thereunder;
  3. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
  4. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;
  5. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 ('SEBI Act')
    1. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
    2. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
    3. The Securities and Exchange Board of India (Issue ofCapital and Disclosure Requirements) Regulations, 2009 and amendments from time to time;
    4. The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; (Not applicable to the Company during the audit period)
    5. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;
    6. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client; (Not applicable to the Company during the audit period)
    7. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (Not applicable to the Company during the audit period) and
    8. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; (Not applicable to the Company during the audit period)
  6. Other laws applicable specifically to the Company namely:
    1. The Motor Vehicle Act, 1988 and the Rules made thereunder.

    We have also examined compliance with the applicable clauses of the following:

    1. Secretarial Standards issued by The Institute of Company Secretaries of India with respect to board and general meetings.
    2. The Listing Agreements entered into by the Company with BSE Limited and National Stock Exchange of India Limited read with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

    During the period under review, the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, standards etc. mentioned above

    It is observed that:

    • The Company has filed an application dated June 22, 2016 with the Central Government for their approval to the appointment of and payment of remuneration to Mr. Guenter Butschek, CEO and Managing Director of the Company and has subsequently filed various responses to its comments/queries. The said approval is yet to be received.
    • As on March 31, 2017 the Company had a Non-Executive Chairman who is regarded as related to the promoter. The Board comprised of 9 directors out of which 4 were independent directors, consequent upon retirement of Mr. Subodh Bhargava, an Independent Director on March 29, 2017. On May 9, 2017, the Board appointed Mr O P Bhatt as an Additional and Independent Director.

    We further report that:

    The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors subject to what is stated above. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

    Adequate notice was given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance for meetings other than those held at shorter notice for which necessary consents have been sought at the meeting, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

    Majority decision is carried through while the dissenting members' views are captured and recorded as part of the Minutes of the Meetings.

    We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

    We further report that during the audit period the Company had following events which had bearing on the Company's affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards etc.

    1. Memorandum of Understanding (MoU) for a long-term partnership with Volkswagen Group and Skoda, to explore strategic alliance opportunity for joint development of products.
    2. Announcement of merger of the Company with TML Drivelines Limited, a wholly-owned subsidiary of the Company primarily engaged in the business of manufacturing Axles, Gearboxes and other parts for the Company's commercial vehicles.
    3. The decision of the Supreme Court to ban sale of BS3 vehicles with effect from April 1, 2017 would impact the automobile industry including the Company mainly in the context of the BS-III inventory lying unsold as on that date.
    4. Issue of 144826 Ordinary shares and 25587 'A' Ordinary shares earlier kept in abeyance.
    5. The Company redeemed Non-Convertible Debentures aggregating Rs. 1200 crores during the year and has compliedwith the applicable laws.
    6. The Company made Private placement of Non- Convertible Debentures aggregating Rs. 2700 crores and complied with the applicable provisions of laws.

    For Parikh & Associates
    Company Secretaries

    P. N. Parikh
    (Partner)
    FCS No: 327 CP No: 1228

    Place: Mumbai
    Date: May 23, 2017

    This Report is to be read with our letter of even date which is annexed as Annexure A and Forms an integral part of this report.

    'Annexure A'

    To,
    The Members
    Tata Motors Limited

    Our report of even date is to be read along with this letter.

    1. Maintenance of secretarial record is the responsibility of the management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.
    2. We have followed the audit practices and process as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the process and practices, we followed provide a reasonable basis for our opinion.
    3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.
    4. Wherever required, we have obtained the Management Representation about the Compliance of laws, rules and regulations and happening of events etc.
    5. The Compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedure on test basis.
    6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.

    For Parikh & Associates
    Company Secretaries

    P. N. Parikh
    (Partner)
    FCS No: 327 CP No: 1228

    Place: Mumbai
    Date: May 23, 2017