Report on Corporate Governance

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  3. Report on Corporate Governance

PLANT LOCATIONS

ADDRESS FOR CORRESPONDENCE

SUBSIDIARY COMPANIES

The Company does not have any material unlisted Indian subsidiary company and hence, it is not required to have an Independent Director of the Company on the Board of such subsidiary company. However, the following Independent Directors of the Company, are also present in an independent capacity, on the Board of the below mentioned subsidiary companies:

The Company adopted a Policy for Determining Material Subsidiaries of the Company, pursuant to Regulation 16(1)( c ) of the SEBI Listing Regulations. This policy is available on the Company’s website at http://investors.tatamotors.com/pdf/material.pdf pursuant to Regulation 46(2) of the SEBI Listing Regulations.

The Audit Committee also has a 2-day meeting wherein the CEO and CFO of subsidiary companies make a presentation on significant issues in audit, internal control, risk management, etc. Significant issues pertaining to subsidiary companies are also discussed at Audit Committee meetings of the Company.

The minutes of the subsidiary companies are placed before the Board of Directors of the Company and the attention of the Directors is drawn to significant transactions and arrangements entered into by the subsidiary companies. The performance of its subsidiaries is also reviewed by the Board periodically.

DISCLOSURES

  1. Details of relevant related party transactions entered into by the Company are included in the Board’s Report and in the Notes to Accounts. The Company has in place a Policy on Related Party Transactions setting out (a) the materiality thresholds for related parties and (b) the manner of dealing with transactions between the Company and related parties, including omnibus approvals by Audit Committee based on the provisions of the Act and Regulation 23 of the SEBI Listing Regulations. During the year, there were no materially significant transactions with related parties, as per the Policy adopted by the Company that have potential conflict with the interests of the Company at large. The Audit Committee takes into consideration the management representation and an independent audit consultant’s report, whilst scrutinising and approving all related party transactions, from the perspective of fulfilling the criteria of meeting arms’ length pricing and being transacted in the ordinary course of business. All transactions with related parties entered into by the Company were in the ordinary course of business on an arm’s length basis and were approved by the Audit Committee.
  2. The Company has complied with various rules and regulationsprescribed Securities and Exchange Board of India or any other statutory authority relating to the capital markets during the last 3 years. No penalties or strictures have been imposed by them on the Company, except as mentioned below: The Securities and Exchange Board of India vide Order dated March 6, 2018 had issued directions for the Company to conduct an internal inquiry within 3 months into the leakage of information relating to its financial results for the quarter ended December 2015 and to take appropriate actions against those responsible as well as to submit its report within 7 days thereafter. The Company is in the process of investigating the matter for submission of its report to the Audit Committee of the Company, which will be submitted to SEBI in a timely manner.The Company has paid a penalty of Rs.5.60 lakhs each, levied by BSE Limited and the National Stock Exchange of India Limited, in respect of delayed filing of the listing application for 266 Ordinary Shares and 80’A’ Ordinary Shares allotted, out of shares held in abeyance, on settlement of an inter-se dispute amongst the shareholders. This penalty has been paid ‘under protest’ subsequent to various representations made by the Company.
  3. In accordance with the provisions of the Act and Regulation 22 of the SEBI Listing Regulations, the Company has in place a Vigil Mechanism and a Whistle-Blower Policy duly approved by the Audit Committee which provides a formal mechanism for all Directors and employees of the Company to approach the Management of the Company (Audit Committee in case where the concern involves the Senior Management) and make protective disclosures to the Management about unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct or Ethics policy. The disclosures reported are addressed in the manner and within the time frames prescribed in the Policy. The Company affirms that no director or employee of the Company has been denied access to the Audit Committee.
  4. The Company has complied with all the mandatory disclosure requirements of corporate governance as specified in Regulation 34(3) read with Part C of Schedule V of the SEBI Listing Regulations.
  5. The Company also fulfilled the following non-mandatory requirements as specified in Part E of the Schedule II of the SEBI Listing Regulations:
    • The Board: The Non-Executive Chairman maintains a separate office, for which the Company does not reimburse expenses.
    • Shareholder Rights: Details are given under the heading "Means of Communications".
    • Modified opinion in Audit Report: During the year under review, there was no audit qualification in the Auditors’ Report on the Company’s financial statements. The Company continues to adopt best practices to ensure a regime of unqualified financial statements.
    • Separate posts of Chairman and CEO: The post of the Non- Executive Chairman of the Board is separate from that of the Managing Director/CEO. In the Tata Motors Group, we have 2 CEO’s, namely the CEO & MD of Tata Motors, whose scope includes managing the Tata MotorsGroup excluding the Jaguar Land Rover (JLR) Group and the CEO and Director of JLR, whose scope covers managing JLR. The respective Boards has delegated the day-to-day running of the Group to the 2 CEO’s within certain limits, above which matters must be escalated to the Board for determination.
    • Reporting of Internal Auditor: The Chief Internal Auditor reports to the Audit Committee of the Company, to ensure independence of the Internal Audit function.
  6. Commodity price risk or foreign exchange risk and hedging activities:

    During the FY 2017-18, the Company had managed the foreign exchange and commodity price risk and hedged to the extent considered necessary. The Company enters into forward contracts for hedging foreign exchange and commodity exposures against exports and imports. The details of foreign currency and commodity exposures are disclosed in Note No.41(c )(i)(a) and 41( c )(iv) to the Standalone Financial Statements.

  7. Disclosures on compliance with corporate governance requirements specified in Regulations 17 to 27 have been included in the relevant sections of this report, a gist of which is given below:
  8. Appropriate information has been placed on the Company’s website pursuant to clauses (b) to (i) of sub-regulation (2) of Regulation 46 of the SEBI Listing Regulations. Given below is the information on the Company’s website regarding key policies, codes and charters, adopted by the Company:

On behalf of the Board of Directors
N CHANDRASEKARAN
Chairman
(DIN: 00121863)

Mumbai,
May 23, 2018