Tata Motors Limited Employees Stock Option Scheme 2018 (“TML ESOP Scheme 2018” / “the Scheme”)
The Board of Directors, on the recommendation of the Nomination and Remuneration Committee and pursuant to the provisions of the Act and the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, had at its meeting held on May 23, 2018, proposed adoption of Tata Motors Limited Employees Stock Option Scheme 2018 (“TML ESOP Scheme 2018” / “the Scheme”), in order to ring fence and incentivize key talent, approximately aggregating to 200 employees, forming 2% of the white collar population, for driving the long term objectives of the Company and ensuring that employee payoffs match the long gestation period of certain key initiatives and at the same time fostering ownership behavior and collaboration amongst employees.
Members’ approval to the Scheme is sought, by way of Special Resolution, at Item No. 7 of the Notice. The salient features of the Scheme are as provided in the explanatory statement of the Notice.
Safety & Health – Performance & Initiatives
The Company is committed to provide a safe and healthy working environment for its employees and associates. It was ensured that none of our employees or workers are subjected to high incident or high risk disease related to their individual occupation. A companywide occupational health and safety policy exist in order to ensure increased vigilance and awareness on health and safety. It was recognised that to achieve the target in safety it was crucial to internalize safety and engage with our employees.
The Indian operations achieved improved performance with Total Recordable Case Frequency Rate (TRCFR) being 1.14 against the target of 1.47 for the Fiscal 2018, the overall Safety Performance improved but recorded one fatality during Fiscal 2018.
The manufacturing plants across the Country are certified to ISO 14001 - Environment Management Systems and OHSAS 18001 – Occupational Health & Safety Management System. The CV manufacturing plants of the Company across India are certified to ISO 50001 - Energy Management System. The Company has undertaken several initiatives for resource conservation such as re-cycling of treated effluents back to process, energy, material recovery and co-processing from hazardous wastes through cradle to grave waste management principles and rainwater harvesting. Manufacturing plants generate in-house renewable power besides sourcing off-site green power. All the Company’s sites are certified for GreenCo, except for the Sanand plant which is participating for GreenCo in June 2018.
The Company places equal emphasis on safety processes, behavioral safety and strives to create a positive safety culture towards achieving the ultimate goal of ‘Zero Injury’. Safety is a primary focus area in daily management and safety parameters are part of the scorecard for Senior Leaders. Sessions on Road Safety were conducted at all offices across India engaging 1,000+ employees along with mentoring of Flexi Work Force under “MY BUDDY” program by Permanent Blue Collar Work force / Group leaders.
In line with Safety and Health Policy, to enhance safety standards of its business partners, Company engaged its upstream and downstream supply chain in the safety journey. The objective of such engagement is to raise the safety standards at Suppliers and Dealer workshops. In addition to existing 16 safety standards, new standards / guidelines like Cell Phone Policy, CCTV Policy, Lone Working Standard, Industrial Hygiene Standard, Engineering Standards, Vehicle Usage & Replacement Guidelines were developed and rolled out to raise the level of safety.
The Company continued Campaign ‘i-drive safe’ – an initiative on building a safe driving culture amongst its employee and associates and have trained them in Defensive Driving. ‘My Road My Discipline’Road Safety Week campaign during April 23 to 29 included Road Safety Celebrations conducted in all location including all Plants, Offices, Dealerships, Warehouses and Vendors.
‘senSHEtize’- A Company’s initiative on Women’s Safety Awareness: more than 1800 women employees underwent training focused on Women’s Safety and Self-defense in 60 session across offices & plants.
Jagruti – Safety Awareness Building Campaign for Workshop Managers is a year-long campaign focused on building awareness on safety and understanding of the Company’s expectations on Dealers Workshop Safety. Jagruti Safety Awareness campaign was done for channel partners PV and CV dealers covering Pan- India level.
In health area, as per the age band, specific health check-up of employees was organized and conducted. Health & well-being of aging workforce remained a prime concern and various health awareness programs and exhibitions across all locations were organized.
Jamshedpur, Lucknow and Pantnagar plants were certified for Food Safety Management System ISO 22000:2005. Remaining plants i.e. Dharwad and Sanand plants will be undergoing certification process in Fiscal 2019.
The Company continued to drive a number of initiatives to reduce its environmental footprint in Fiscal 2018. Our GreenHouse Gas (GHG) mitigation approach included driving energy conservation in manufacturing operations and generation / procurement of renewable energy. The Company consumed 99 million units of renewable electricity in its operations, which was 21% of total power consumed. This is 19% higher than renewable power consumed in Fiscal 2017. On Company’s efforts to achieve ‘Zero Waste to Landfill’, the hazardous waste disposed to Common Facilities (for landfill / incineration) was lower by 18% over Fiscal 2017. The Company’s approach to lowering the water consumption included driving water conservation in manufacturing operations, re-cycling treated effluent for re-use in process and harvestingseasonal rainwater. The Company’s performance on effluent recycling improved by 15% over Fiscal 2017.
On Sustainability, supply chain sustainability was one of the major initiatives undertaken during Fiscal 2018. Over 50 suppliers have been trained and provided handholding to improve sustainability performance and assessed towards sustainability expectations.
Circular economy, natural capital evaluation of key dependencies, design for environment, biodiversity assessment, life cycle assessment of products, climate adaptation study were some of the other initiatives the Company has taken in sustaining its business and planet.
JLR continues to drive health and safety through Destination Zero – A Journey to Zero Harm. The Company’s commitment is reflected in JLR commitment with the key statement being “Our most valuable asset is our people, nothing is more important than their safety and wellbeing. Our co-workers and families rely on this commitment. There can be no compromise”. The concept of ‘Humanising’ safety metrics and ensuring transparent reporting enables the journey to zero harm to continue to be highly visible. To support the wider ambition of zero harm as well as focusing on incidents, JLR also continued to mature the approach to wellbeing activities with a focus on mental health and the launch of the ‘let’s have the conversation’ programme, designed to support open discussions on matters of mental health. The development of focused plans has ensured that each functional area, aligned at Board level, has a specific ‘Destination Zero’ Harm Plan. These have assisted each functional area to tailor their own plan of activities to lead improved safety and wellbeing within their own area of responsibility.
Performance on Loss Time Injuries (LTI) continued to show improving trend consistent with overall business improvement. A notable improvement was seen in manufacturing locations with around 47% improvement against last Fiscal performance. Many of the sites continued to celebrate sustained zero lose time injuries. The improved performance on safety was resultant of various initiatives taken throughout the year, such as improving quality of safety observations, effective implementation of existing safety management programs, robust safety training and defensive driving etc.
The business has gone through OHSAS 18001 - surveillance visits in Fiscal 2018, within all the UK locations and maintained its accreditation to this standard through a series of external assessments. Plans for migration to the new International Standard ISO 45001 was underway.
TMSA sustained good performance, leadership commitment and employee engagement in areas of Safety and Health during Fiscal 2018. TDCV Korea and TMTL Thailand continued leadership commitment and engagement with focus in areas of safety communication, risk assessment, improving capabilities of employees for emergency situations.
Prevention of Sexual Harassment
The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and redressal of complaints of sexual harassment at workplace. The Company is committed to providing equal opportunities without regard to their race, caste, sex, religion, colour, nationality, disability, etc. All women associates (permanent, temporary, contractual and trainees) as well as any women visiting the Company’s office premises or women service providers are covered under this Policy. All employees are treated with dignity with a view to maintain a work environment free of sexual harassment whether physical, verbal or psychological.
During Fiscal 2018, the Company had received 13 complaints on sexual harassments, 12 of which have been substantiated and appropriate actions were taken. The remaining 1 complaint was received during mid March and is being investigated. The Company organized 148 workshops or awareness program against sexual harassment. There were no complaints pending for more than 90 days during the year.
Similar initiatives on Prevention of Sexual Harassment are in place across the Tata Motors Group of companies.
BUSINESS RESPONSIBILITY REPORT
Pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations, the Business Responsibility Report (BRR) initiatives taken from an environmental, social and governance perspective, in the prescribed format is available as a separate section of the Annual Report and also hosted on the Company’s website www.tatamotors.com.
FINANCE
During the year, the free cash flows for Tata Motors Group were negative Rs. 11,183 crores, post spend on capex, design and development of (Rs.35,039 crores). Tata Motors Group's borrowing as at March 31, 2018, stood at Rs. 88,951 crores (as at March 31, 2017: Rs. 78,604 crores). Cash and bank balances and investments in mutual funds stood at Rs. 48,974 crores (as at March 31, 2017: Rs.51,119 crores). The consolidated net automotive debt to equity ratio stood at 0.15 as at March 31,2018, as compared to 0.13 as at March 31, 2017.
The cash flows were Rs. 1,339 crores for standalone operations (including joint operations) of the Company. Spend on capex, design and development was Rs. 2,794 crores (net). The borrowings of the Company as at March 31, 2018 stood at Rs. 18,464 crores (as at March 31, 2017: Rs. 19,357 crores). Cash and bank balances including mutual funds stood at Rs. 2,312 crores (as at March 31, 2016: Rs. 2,764 crores).During Fiscal 2018, the Company issued rated, listed, unsecured NCDs of Rs.1,500 crores.
At JLR, post spend on capex, design and development of GB£4,186 million (Rs.35,776 crores), the free cash flows were negative GB£1,045 million (Rs.8,931 crores) for Fiscal 2018. The borrowings of the JLR as on March 31, 2018, stood at GB£3,731 (Rs.34,238 crore) [as at March 31, 2017: GB£3,581 million (Rs.28,977 crores)]. Cash and financial deposits stood at GB£4,657million (Rs.42,977 crores) [as at March 31, 2017: GB£5,487 million (Rs.44,400 crores)]. Additionally, JLR has undrawn committed long term bank lines of GB£1,935 million (JLR data as per IFRS).
During Fiscal 2018, JLR issued US$500 million senior notes due in 2027 at a coupon of 4.50% per annum. The proceeds were for general corporate purposes, including support for JLR’s ongoing growth and capital spending requirements.
During Fiscal 2018, TMFHL and its subsidiaries, Tata Motors Finance Limited and TMFSL, raised Rs.3,231 crores by issuing NCDs. Bank borrowings through secured and unsecured term loans continued to be a major source of funds for long-term borrowing and raised Rs.2,330 crores during Fiscal 2018. In Fiscal 2018, TMFHL Group short-term debt (net) increased by Rs.5,008 crores and longterm debt (net) increased by Rs.7 crores.
Tata Motors Group has undertaken and will continue to implement suitable steps for raising long term resources to match fund requirements and to optimise its loan maturity profile.
During Fiscal 2018, the Company’s rating for foreign currency borrowings was retained to “Ba1”/Stable by Moody’s and to “BB+”/ Stable by Standard & Poor’s. For borrowings in the local currency, the ratings was retained by CRISIL at “AA/ Positive” and by ICRA at “AA/ Positive”. The Non-Convertible debentures and long term bank facilities i.e. (Buyers Credit and Revolving Credit Facility) rating by CARE was retained at “AA+/Stable”. During the year, JLR’s rating was retained by Moody’s at “Ba1” with a change in outlook to Stable and was retained by Standard & Poor’s at “BB+/Stable”. For TMFHL, CRISIL has maintained its rating on long-term debt instruments and bank facilities to CRISIL “AA/ A1+/Positive” and ICRA has maintained its rating at “AA/Positive”