Notice

  2. Notice

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:
  5. Foreign Investment 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.

  1. INFORMATION ABOUT THE APPOINTEE - Mr Satish Borwankar, Executive Director and Chief Operating Officer:
  1. Background details:

    Aged 64, Mr Borwankar is a B.Tech (Hons). Mech, with wide experience in automobile industry, particularly in manufacturing and quality functions. Mr Borwankar has been the Executive Director of the Company since June 21, 2012 and prior to June 5, 2017 was responsible for the quality function of the Company for both commercial and passenger vehicles. Having started his career with the Company in 1974 as a Graduate Engineer Trainee, he has worked in various executive positions, for overseeing and implementing product development, manufacturing operations and quality control initiatives of the commercial vehicle business unit of the Company. He has played a significant role in setting up Greenfield projects of the Company.

  2. Past remuneration:

    It may be noted that in view of the financial performance of the Company on a standalone basis for the past few years, the Company had significantly reduced the variable portion of the remuneration, viz. incentive remuneration. The salary increments were decided based on industry benchmarks, the Company's growth plans and with a view to retain talent. For further information, please refer to point No. 5 Pertaining to 'Comparative Remuneration Profile' of Item No. II on information about the appointee. The Company does not have an Employee Stock Option Scheme for any of its employees or directors.

  3. Job profile and suitability:

    In Mr Borwankar's role as Executive Director and Chief Operating Officer w.e.f June 5, 2017, he will be accountable to ensure an end-to-end view on the entire operations of the Company, focusing on quality improvement, supply chain performance, meet the S&OP plan, cost reduction and management, timely launch of flawless new products. This would enable the Company to unleash its sales potential and successfully manage the turnaround plan which is so critical to the Company's growth and sustainability.

    He also shoulders responsibility for reviewing and overseeing the implementation of Safety, Health and Environment related practices of the Company and the Tata Business Excellence Model (TBEM) guidelines. As a Director, nominated on the Board of certain subsidiary companies, he provides valued direction and insight. Also "Sankalp" a sheet metal part suppliers' quality improvement project has been mentored by him and has transformed the Company's sheet metal suppliers' quality standards. It is worthy to note that, the Company or these subsidiaries do not additionally compensate him, in any manner, for these additional activities undertaken by him, except in certain subsidiaries in his capacity as a Non-Executive Director. Mr Borwankar, an engineer from lIT Kanpur, with several years of multi-functional experience spanning across the Company's value chain and has consistently delivered exceptional results throughout his career. Taking into consideration Mr Borwankar's background the Board believes that he is an ideal candidate to help fructify the vision of achieving par-excellence in his new role as an Executive Director and Chief Operating Officer, as envisioned by the Company.

    Achievements and Performance Highlights during last two years:

    • Initiated steps to achieve World Class Quality (WCQ). During FY 2016, Dharwad, Pantnagar, Lucknow & Jamshedpur plants achieved WCQ Level 2, whereas subsidiaries/division like Prolife & TMLDL achieved WCQ Level 1. During FY 2017 TMLDL Jsr, PVBU Pune and Dharward operations achieved WCQ Level 3 in Q4 FY 2017. Prolife Lucknow operations achieved WCQ Level 2 in in Q4 FY 2017. New Sustenance Assessment Concept rolled out for reinforcing the WCQ journey.
    • Introduced forward model quality and quality assessment processes for the first time in Tata Motors in 13-14, which has now matured. This approach has helped in launching defect free product launch like Bolt, Zest, Tiago, Hexa, Tigor in PVs and Ultra and Prima variants in CVs.
    • Reduction in rework and inspection activities as a part of 'Cost of Quality' initiatives resulting in reduction of around 2,000 temporary workforce – an 80% reduction in rework manpower and 33% reduction in inspection manpower. Under the Impact initiative of cost reduction through lower 'Cost of Quality', Quality teams have achieved a cost reduction of Rs. 56 crores through appraisal cost, internal and external failure cost reduction. In FY 2016, Dealer PDI time for rework & rectification has been significantly reduced from 2 days to same day delivery within few hours.
    • Perceived vehicle quality has taken a quantum leap of improvement after the introduction of CPA and Craftsmanship audits at all plants.
    • The 3 MIS warranty failure incidences have significantly reduced - by 37% in CVBU and 41% in PVBU over last financial year resulting in substantial reduction of warranty expenses. In May 2017 Dealer Conference, the Company's products were appreciated for significant improvement in quality, reliability & durability including noteworthy reduction in warranty failures and expenses.
    • Introduced initiative of 'Zero Aggregate failure' within 50,000 kms. Substantial reduction in replacement of critical components, such as engines, axles, transmissions both in commercial and passenger vehicle businesses.
    • Gear shift quality improvements and gear shift effort reduction undertaken in M&HCV 6 speed gear box which are better than benchmarks.
    • Significant improvement in accuracy of bill of materials for bulk and non bulk parts particularly for BS-IV vehicles.
    • Concepts like 'Do It First Time Right' ("DIFTR") and 'No touch DRR' rolled out in all vehicle assembly lines, with concrete parameters. Implementation of process Pokayokes (around 5,000 Pokayokes identified and more than 4,500 installed) to support the DIFTR initiative.
    • Introduced a new initiative to improve cabins for entire CV portfolio and PV portfolio. With all improvements in place, the shower testing has been discontinued in almost all models resulting in substantial cost savings.
    • Made substantial progress on the Supplier Quality improvement through 'Project Sankalp' and 'Supplier Quality Improvement Initiative' ("SQIT") introduced in the previous year resulting in significant improvement of selected suppliers on safety, quality and cost front.
    • Ipsos Survey initiated for commercial vehicles to improve product reliability and durability.
    • IT enablement has strengthened various processes like FIFO dispatch system at RSOs and storage yards as also product quality through initiatives like Project Tantra & DDMS.
    • Proactive field, customer and dealer visits by plant teams are continuing with rigor to understand the opportunities for improvement to improve the customer satisfaction.
    • JDP IQS performance: TML PV products performance improved from 13th rank, (which was at the bottom of the chart till previous year) to move up to 8th rank in the 2015-16 IQS results. The TML performance improved by 37 PPH while the overall industry improved by 3 PPH in 2015, but in 2016 the IQS course have been deteriorated by 25 PPH over 2015 IQS course.
    • Nano stood second rank in the entry compact segment at 91 PPH, the best performance by Nano so far in the JDP IQS in 2015. In 2016 Nano ranked 3rd with 103 PPH.
    • Tata Motors Limited (India Operations) has been conferred the 'Golden Peacock National Quality Award' for the year 2016 for its significant improvement in product & process Quality.

Taking into consideration the qualifications, achievements and varied experience, the Board continues to bestow upon Mr Borwankar new role and responsibilities of Executive Director and Chief Operating Officer.

  1. Remuneration proposed:

    Details on remuneration have been stated in the Resolution at Item No. 6 of the Notice.

  2. Comparative remuneration profile with respect to industry, size of the company, profile of the position and person (in case of expatriates the relevant details would be with respect to the country of his origin):

    In view of the financial performance of the Company on a standalone basis for the past few years, the Company had significantly reduced the variable portion of the remuneration, viz. incentive remuneration. The salary increment to the Executive Director for FY2017-18 of 6.5% (previous year: 8%) was decided based on industry benchmarks, the Company's performance and growth plans, his enhanced roles and responsibilities as Chief Operating Officer and with a view to retain talent. The metrics used by the NRC while deciding the salary increase of 6.5% for FY2017-18 were inter alia based on a survey conducted by Aon Hewitt, an independent consultant, depicting an average salary increase in India averaging around 9.5% and the Indian automotive manufacturing industry the salary increment was around 10.3%.

    Remuneration paid/payable to Mr Borwankar, is commensurate with industry standards and Board level positions held in similar sized domestic companies, taking into consideration the responsibilities shouldered by him. The table below illustrates the requisite comparative data:

  3. Pecuniary relationship directly or indirectly with the Company, or relationship with the managerial personnel, if any:

    Besides the remuneration paid/payable to Mr Borwankar, there is no other pecuniary relationship with the Company or with the managerial personnel of the Company.

  4. Recognition or Awards:

    Some of the significant Awards and Recognitions received by the Company during the year are given below:

    Plants:

    Jamshedpur:

    • World Class Quality Level II.
    • Ranked 1st in the Industry category for environmental initiatives by Jharkhand State Pollution Control Board.
    • CII-GreenCo 'Gold Rating' Best Practices Award 2016 for its Innovative Project on water conservation.

    Pune:

    • Excellent Energy Efficient Unit Award in the Automobile Manufacturing category at the 17th National Awards for Excellence in Energy Management organised by CII.
    • First runner - up in the Automotive Sector, Mega Large Business category at the Frost & Sullivan - India Manufacturing Excellence Awards 2016.

    Lucknow:

    • The Srishti Good Green Governance Award 2016.
    • Social Return on Investment Award by KPMG.
    • Certification of GreenCo "Silver rating" during Green Co Summit 2016 by CII.
    • Apprentices' Training Excellence Award by Govt. of UP.