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SUBMITTED BY:ARCHANA GOYAL

HINA GOELKANIKA ARORAKAVITA MEENARICHA MISHRASURBHI RAJPOOT

SWETA SINHA

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The automobile sector in India was severely impacted by the disruption inthe Indian and global business environment. Gross Domestic Productgrowth slowed down considerably from 9% in FY 07-08 to 6.7% in FY 08-09. While the slowdown in the Indian economy was less compared toother world economies, it did have a severe impact on most sectors.Both turnover and profitability of the automotive sector came undertremendous pressure. Double digit inflation and high material cost in thefirst half of the year leading to higher vehicle prices, higher fuel prices,

unavailability of finance, higher cost of financing and uncertainty in theoverall economic conditions impacted demand to a great extent. Theslowdown in the economy resulted in a drop in industrial production,which reached new lows in the second half of the year. All these factorseroded the bottom line of the companies in the automotive sector.

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Both the commercial and passenger domestic vehicles industry came undertremendous pressure as a result of these market conditions. Thecommercial vehicle industry which had already started showing signs ofslowing down last year, declined by 17.4% compared to the 7.6% growth

in FY 07- 08. The passenger vehicle industry, which had showed a growthof 11.3% in the previous fiscal, went into negative zone with a decline of

0.5%. Supported by stimulus measures undertaken by the government andthe RBI, demand showed some signs of revival towards the end of theyear.

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In such trying times, the companys sales of 506,421 vehicles were 13.5%lower than last year volumes. Even though domestic commercial vehiclesvolumes declined by 15.2%,the company consolidated its leadershipposition in the domestic market by introducing new products to

complement its existing product portfolio. The passenger vehiclesvolumes declined by 4.8% in the domestic market, primarily due to thephasing in of the new Indica Vista in the second half of the year andsluggishness of the UV segment. The companys exports declined by38.6% during the year, due to the meltdown in major international

markets and the consequent swings in foreign exchange rates.

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Tata Motors has two business units the Passenger Car Business Unit(PCBU) and Commercial Vehicles Business Unit (CVBU). The vision andmission of both the business units are given below:

PASSENGER CAR BUSINESS UNIT

VISIONTo develop TATA into a world class car brand for innovative and superior

value vehicles.

MISSIONTo be the most admired multi-national Indian car company producingvehicles that people love to buy.To create an organization that people enjoy working for, doing business

with and investing in

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COMMERCIAL VEHICLE BUSINESS UNIT-Journey To Excellence

VISIONTo be a world class corporate constantly furthering the interest of all its

stakeholders.

MISSIONSHAREHOLDERS

To consistently create shareholder value by generating returns in excess ofWeighted Average Cost of Capital (WACC) during the upturn and at least

equal to Weighted Average Cost of Capital (WACC) during the downturnof the business cycle.CUSTOMERS

To strengthen the TATA brand and create lasting relationships with thecustomers by working closely with business partners to provide superiorvalue for money over the lifecycle.

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Tata Motors is Indias largest automobile company. It is the leader by far in

commercial vehicles in each segment, and among the top three inpassenger vehicles with winning products in the compact, midsize car

and utility vehicle segments. The company is the worlds fourth largesttruck manufacturer and the second largest bus manufacturer.

Established in 1945, Tata Motors presence indeed cuts across the lengthand breadth of India. Over 4 million Tata vehicles ply on Indian roads,

since the first rolled out in 1954.

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.The companys manufacturing base is spread across Jamshedpur, Pune,Lucknow andPantnagar (Uttarakhand). Following a strategic alliancewith the Fiat Group in 2005, it has set up an industrial joint venture withFiat India Automobiles Pvt. Ltd. At Ranjangaon(Maharashtra) to produce

both Fiat and Tata cars and Fiat powertrains establishing two new plantsat Dharwad (Karnataka) and Sanand (Gujarat).

Thecompanys dealership, sales, services and spare parts networkcomprises over 3500 touchAt the core of the companys approach todoing business is the Tata Business Excellence Model. Incorporating

sound business principles, like customer satisfaction, quality,attention todetail, conservation of resources and protection of the environment,thismodel shapes the way Tata Motors designs, manufactures andmarkets its products points.

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The companys 24,165 employees are guided by the unwaveringcommitment to be

best in the manner in which we operate, best in the products wedeliver, and best in

our value system and ethics.Tata Motors helps its employees realise their potential through

innovative HR practices. The companys goal is to empower and provide employees with

dynamic career paths in congruence with corporate objectives. All-round potential

development and performance improvement is ensured by regular in-house and

external training. The company has won several awards recognising its training

programmes.

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Passenger Cars: The range comprises the Tata Indica (compact car), theTata Indigo(sedan), the Tata Indigo Marina (station-wagon), the TataNano (small car). Thecompany also distributes and markets Fiat UtilityVehicles: A range comprising the Tata Aria (Crossover); the Tata Safari

(SUV), theTata Xenon XT (Lifestyle Pick-up), and the Tata Sumo GrandeMK II, the Tata Sumo rangeand the Tata Venture (PeopleCarriers).branded cars in India.

Commercial Vehicles for goods transportation Small CommercialVehicles: the Tata Ace, Indias first indigenous mini-truck. Light

Commercial Vehicles: Pick-ups and trucks ranging from 2T GVW to7.5TGVW. Medium and Heavy Commercial Vehicles: Tata Prima range ofworld standardmulti-axle trucks, tractor-trailers, tippers, mixers, andspecial applicationvehicles, ranging from 10T GVW to 75T GVW.

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Commercial Vehicles for passenger transportation Tata and Tata Marcopolo range of light, medium and heavy buses from2T GVWonwards. Multi-purpose vehicles the Tata Magic, the TataMagic Iris, the Tata Wingerand the Tata Venture for urban and rural

transportation.

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Through its subsidiaries and associate companies, Tata Motors isengaged in manufacturing and marketing of automobiles, engineering,design and automotive solutions, construction equipmentmanufacturing, automotive vehicle components manufacturing and

supply chain activities, machine tools and factory automation solutions,high-precision tooling and plastic and electronic components forautomotive and computer applications, and auto finance, automotiveretailing and service operations.

Jaguar Land Rover: the two great British brands, comprising Jaguarluxury saloons & sports cars, and Land Rover 4X4s.

Tata Marcopolo Motors: Manufacturing fully-built buses in India. Tata Daewoo: Manufacturing and marketing of medium and heavy

commercial vehicles in South Korea. It is South Koreas second largesttruck manufacturer, and the largest exporter of heavy trucks.

Hispano Carrocera: Manufacturing and marketing of buses.

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Tata Motors (Thailand): Manufacture and marketing of pick-upvehicles in Thailand.

Telcon: Manufacturing and marketing of construction equipment andallied services.

Tata Motors European Technical Centre: Design engineering and

development ofproducts. Tata Technologies: Specialised engineering and design services,

product lifecycle management, and product-centric IT services. TAL Manufacturing Solutions: Factory automation solutions, machine

tools, and 11 aerospace business. HV Transmission and HV Axles: Gear boxes and axles for heavy &

medium commercial vehicles. Tata Autocomp: Manufacturing and marketing of auto components,

systems, engineering services. TML Distribution Co.: Sales, logistics and distribution of Tata Motors

vehicles. Tata Motor Finance: Financing of Tata Motors passenger vehicles and

commercial vehicles.

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Tata Motors, the first company from Indias engineering sector to be listed in theNew York Stock Exchange (September 2004), has also emerged as aninternational automotive company. The companys objective is to expand itsinternational business, both through organic and inorganic growth routes.Through subsidiaries and associate companies, Tata Motors has operations in theUK, South Korea, Thailand and Spain. The companys international businessincludes Jaguar Land Rover, which came into the fold in 2008. Jaguar CarsLimited, founded in 1922, is one of the worlds premier manufacturers of luxurysaloons and sports cars. Since 1948, Land Rover has been manufacturingauthentic 4x4s that define breadth of capability in their segments. The Jaguarrange comprises Jaguar XF, XJ and XK and the X-TYPE, while the Land Roverrange comprises Range Rover, Range Rover Sport, Defender, FreeLancer 2 andDiscovery 3. The Jaguar Land Rover business employs some 16,000 people,

predominantly in the UK,including some 3,500 engineers at two productdevelopment centres in Whitley, Coventry and Gaydon, Warwickshire. Thebusiness is a major wealth generator for the UK with 78 per cent of Land Roversexported to 169 countries, and 70 per cent of Jaguars exported to 63 countries,with sales to customers conducted principally through franchised dealers andimporters.

The companys international business includesJaguar Land Rover, which came into thefold in 2008. Jaguar Cars Limited, founded in1922, is one of the worlds premier

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In 2004, Tata Motors acquired the Daewoo Commercial Vehicle Company, SouthKoreas second largest truck maker. The rechristened Tata Daewoo CommercialVehicle Company has launched several new products in the Korean market, whilealso exporting these products to several international markets. Today two-thirdsof heavy commercial vehicle exports out of South Korea are from Tata Daewoo.In 2005, Tata Motors acquired a 21% stake in Hispano Carrocera, a reputedSpanish bus and coach manufacturer, and subsequently the remaining stake in2009. Hispanos presence is being expanded in other markets. In 2006, it formeda joint venture with the Brazil based Marco polo, a global leader in body-buildingfor buses and coaches to manufacture fully-built buses and coaches for India andselect international markets. Tata Motors also entered into a joint venture in 2006with Thonburi Automotive Assembly Plant Company of Thailand to manufactureand market the companys pickup vehicles in Thailand; the Tata Xenon was

launched in Thailand in 2008. These linkages will further extend Tata Motorsinternational footprint, established through exports since 1961. The company'scommercial and passenger vehicles are already being marketed in severalcountries in Europe, Africa, Middle East, South East Asia, South Asia and SouthAmerica. It has franchisee/joint venture assembly operations in Malaysia, Kenya,Bangladesh, Ukraine, Russia and Senegal.

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The foundation of the companys growth is a deep understanding of economicstimuli and customer needs, and the ability to translate them into customer-desired offerings through leading edge R&D. The R&D establishment includes ateam of over 3,000

scientists and engineers and comprehensive in-house facilities, including crash-test,13environment test for extreme heat and cold, and noise and vibration test. The

companys Engineering Research Centre (ERC) was established in 1966, and hasfacilitiesin Pune, Jamshedpur, Lucknow and Dharwad. The company set up theTata Motors European Technical Centre (TMETC) in 2005 in the UK. TMETC isengaged in design engineering and development of products, supporting TataMotors skill sets. Tata Daewoo Commercial Vehicle Company and HispanoCarrocera also have R&D establishments at Gunsan in South Korea and Zaragozain Spain. All these facilities together enable the company to share and access

knowledge and technology for designing and developing world-classproducts.The ERC has enabled pioneering technologies and products. It was TataMotors, which developed the first indigenously developed Light CommercialVehicle, Indias first Sports Utility Vehicle and, in 1998, the Tata Indica, Indias firstfully indigenous passenger car. Within two years of launch, Tata Indica becameIndias largest selling car in its segment.

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The pace of new product development has quickened through an organisation-widestructured New Product Introduction (NPI) process. The process with its formal

structure for introducing new vehicles in the market brings in greater discipline in

project execution. The NPI process helped Tata Motors create a new segment by

launching the Tata Ace, Indias first mini-truck, in 2005. The Ace platform has also

helped spawn the innovative Magic range of people carriers for public transportation.In January 2008, Tata Motors unveiled its Peoples Car, the Tata Nano, which India and the world have been looking forward to. A development, which signifies a first for the

global automobile industry, the Nano brings the comfort and safety of a car within the

reach of thousands of families. The car is available in both standard and deluxe versions.

The standard version has been priced at Rs. 100,000 (excluding VAT and transportation

cost).Tata Motors is equally focussed on environment-friendly technologies in emissions and

alternative fuels. It has also been implementing several environment-friendlytechnologies in manufacturing processes, significantly enhancing resource conservation.

The ERC has received several awards from the Government of India. Some of the more

prominent amongst them are the National Award for Research and Development Efforts

in Industry in the Mechanical Engineering Industries sector in 1999, the National Award

for Successful Commercialisation of Indigenous Technology by an Industrial Concern in

2000, and the CSIR Diamond Jubilee Technology Award in 2004.

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Name of Committee Role

Audit Committee The Audit Committee functions according to

its Charter that defines its powers, scope and

role in accordance with the Companies Act,1956, listing requirements and US regulations

applicable to the Company and is reviewedfrom time to time. Whilst, the full Charter is

available on Companys website

www.tatamotors.com

Remuneration

Committee

The Remuneration Committee of the Company

is empowered to review the remuneration

of the Managing Director and the ExecutiveDirector, retirement benefits to be paid to

them under the Retirement Benefit Guidelines

approved by the Board and deal with

matters pertaining to Employees Stock

Option Scheme

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Investors GrievanceCommittee

The Investors Grievance Committee of the Board isempowered to oversee the redressalof investors complaints pertaining toshare/debenture transfers, non-receipt of annualreports, interest/dividend payments, issue ofduplicate certificates, transmission (with and

without legal representation) of shares anddebentures and other miscellaneouscomplaints

Ethics & ComplianceCommittee

The Ethics and Compliance Committee wasconstituted to formulate policies relating tothe implementation of the Tata Code of Conduct forPrevention of Insider Trading (the

Code), take on record the monthly reports ondealings in securities by the SpecifiedPersons and decide penal action in respect ofviolations of the applicable regulations/theCode

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Executive Committee ofBoard

The Executive Committee of Board reviews capitaland revenue budgets, long-termbusiness strategies and plans, the organizationalstructure of the Company, real estate andinvestment transactions, allotment of sharesand/or debentures, borrowing and other

routine matters. The Committee also discusses thematters pertaining to legal cases,acquisitions and divestment, new business foraysand donations

NominationsCommittee of the Board

The Nominations Committee of the Board wasconstituted with the objective ofidentifying independent directors to be inducted on

the Board and to take steps to refreshthe constitution of the Board from time to time

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The Tata Group has always been values driven. The five core values ofIntegrity Understanding, Excellence, Unity and Responsibility drive theway we run our businesses. The Tata Code of Conduct (Tcoc) which is theethical road map for the Tata Group is a derivative of the core values.

Tata Motors employees, channel partners, including suppliers and dealersare all bound by the Tata Code of Conduct (Tcoc), through which thecompany adheres to a strict policy against any corrupt practices. Thepolicy on gifts and donations is also enforced.

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As an employee at Tata Motors, it is obligatory to not only adhere to thecode but also to be concerned if there is an actual or possible violation ofany clause and to bring it to the attention of the Ethics Counsellor. TCoCis prominently displayed at our establishments and is available in Englishand vernacular languages at the companys internal website. Moreover,all current and new employees undergo training on TCoC and commit toadhere to the same in writing.

There is robust ethics counsellor process to monitor implementation ofTCoC. The TCoC incorporates within its fold, the Human Rights

principles, which thus get monitored during the process of monitoring ofthe former. Employees, as well as outsiders, have the liberty to raiseconcerns if any, related to the Tata Code of Conduct and the HumanRights Policies thus. Ethics Counsellors, who are present at all locations,address these concerns.

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In relation to the process of managing the business ethics, it is of much availto talk about the Whistle Blower Policy at Tata Motors (whistle blowerpolicy of Tata Motors is available on the companys website at thefollowing link http://ir.tatamotors.com/pdf/whistle-blower-policy.pdf). This

policy is an extension ofthe Tata Code of Conduct. The Whistle Blowersrole is that of a reporting party with reliable information. The Policy alsodefines clearly the composition and role of investigators or fact-findersand that of arriving at corrective or remedial action in each given case.The Policy explicitly mentions pre-requisites to ensure that the identity

of the Whistle Blower is kept confidential. All employees of the companyare eligible to make Protected Disclosures under the Policy.

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2008-09 was a difficult year faced by the automotive sector globally. The spread of theeconomic downturn of the Western world significantly affected business environment inIndia as well. The company faced significant pressure in its domestic and overseasmarkets. Despite the challenges, the company successfully completed the acquisition ofJaguar and Land Rover and launched the Tata Nano, overcoming serious impediments ofa last minute plant Income generating activitiesTata Motors creates economic value not only for the shareholders but also for otherstakeholders. It is estimated that worldwide, Transport sector has emerged as thebiggest employer *1 Commercial Vehicle - employment for 13.3 people1 Car - employment for 5.3 people1 Three Wheeler - employment for 3.9 people1 Two Wheeler - employment for 0.5 people* Source: Automotive Mission Plan 2006-16, Includes: Direct and Indirect EmploymentBesides creating employment through its business operations, the company also invests

in communities at large through its initiatives in enhancing employability throughvocational and technical training of youth and of women through the Self Help Groups.The company also encourages formation of co-operatives and mentors individuals toenable them to start their own enterprises. In each of the manufacturing units of thecompany, apprenticeship training programmes are carried out. An overview of theimpact of some of these initiatives is given below: location amidst much political turmoil.

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CSR Departments look after CSR at plant locations. These areindependent departments that cater to varied conditions and contextsof the region in which the manufacturing unit is located.The Heads of theCSR departments at each manufacturing unit administratively reportinto the HR Head of the manufacturing unit, which in turn reports to thePlant Head.

The CSR department at facility level, functionally report to the CorporateCSR Head. The starting point for any community development initiativeis the conducting of surveys through administering questionnaires duringhome visits, conducting focused group discussions along with key

informants interviews for understanding the socio economic and culturalmilieu of the villages. The compilation of the baseline data is followed byan active engagement process with the communities to identify andprioritize the felt needs of the community at large. Once needs areprioritized, community development programmes are designed,resources identified and allocated before the projects are implemented.

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Implementation of the programme differs at locations. Initiatives areimplemented through Tata Motors supported organizations inJamshedpur (Gram Vikas Kendra for rural development; Nav JagratManav Samaj for treatment and rehabilitation of leprospatients; Parivar

Kalyan Sansthan for health care of comm Kendra for educationalinitiatives) and Lucknow (Samaj Vikas Kendra for rural development andJan Parivar Kalyan Sansthan for health initiatives). The CSR departmentdirectly implements projects at other locations. At almost all locations,including the non-plant locations, partnership is forged with non-

governmental organizations for implementation of communitydevelopment initiativesunities and Shiksha Prasar.

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Four Branches making automotive components, cable harnessing, utilityitem making, Employment Generated: 1200 women, mainly wives ofoperative grades &needy community members Turnover: Rs. 52.28million

Management: All processes internally managed through elected Societymembers Growth: Training through internal trainers businessdevelopment through internal team products making.

22 women employed in assembly line including widowed and physicallydifferently abled.

Over 4000 chapattis made and sold everyday to industrial canteens byvillage women

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HEALTHCurative & preventivehealth services

Over 5 lakh community membersbenefited so far - 2500

patients covered by trainedVillage Health Workers

Low Cost Toilets More than 5000 so far

Cleanliness drives 4000 villagers participated in2008-09

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EDUCATION

Infrastructure development, facilityupgradation 100 schools benefited

and donations

100 schools benefited

Extra curricular activities for overallpersonality More than 50,000 studentsso fardevelopment

More than 50,000 students so far

Scholarship for higher studies More than 500 students annually

Teachers training for improving thequality ofeducation

Training module developed forAnganwadi teachers in 2008-09

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EMPLOYBILITY

Vocational training 1048 youth, of which 570were women in 2008-09

Technical Training Over 5000 youth trained inMMV, refrigeration

Entrepreneurshipdevelopment

200 entrepreneurs created in2008-09 mid day meal,garages, honey making,tailors, garage owners, etc

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ENVIROMENT

Increasing the green cover More than 10million trees

Increase irrigational facilitiesfor agricultural development

132 ponds created in 2008-09

Reduce GHG through

promotion of alternatefuel resources

17 bio-gas plants constructed

in2008-09

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Tata Motors won the Wall Street Journal Technology Innovation Award in the'Transportation' category for the Nano, which is credited with being 'a veryimpressive design accomplishment'.

CVBU won Sustained Excellence trophy at the 14th JRD QV awards, in 2008 forsustained excellence for past 3 consecutive years.

Tata Motors has been honoured with the NDTV Profit Business LeadershipAward 2008 in the 'Automobiles - 4 wheelers' category.

Indica Vista won the Jury Award at the Business Standard Motoring Car of TheYear Awards.

Tata Motors CVBU Pune won CII-National Award for Excellence in EnergyManagement 2008 and also declared as Excellent Energy Efficient Unit.

Tata Motors CVBU Pune has won the Rajiv Gandhi National Quality Award for

2007 in the large scale manufacturing organisation category. Tata Motors Training Division CVBU Pune won the prestigious Golden PeacockNational Training Award for 2008 and the Best Establishment Award by DGET,Ministry of Labour and Employment, Govt. of India, New Delhi.

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Land Rover has been honoured with two Queen'sAwards for enterprise (One for International Trade andSecond for Innovation).

Jaguar has been ranked number 1 in J.D. Power andAssociates 2008 Sales Satisfaction Index (SSI) Study. Jaguar XF sports saloon has been named the What

Diesel Car of the Year and also topped the ExecutiveCar category in the What Diesel magazines

prestigious annual awards. Land Rover won an awardfor the best diesel 4x4 with the Freelander 2.

Jaguar's Ian Callum has won The Walpole Award forBritish Luxury Design Talent at Walpole Awards 2008.

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Sumo (ranked No. 5), Indica (ranked No. 9), Safari (rankedNo.13) and Indigo (ranked No.16) were among 'Most TrustedBrands' of India.

Engineering Export Promotion Council (EEPC) awarded TataMotors with the Top Exporter Gold Trophy in the LargeEnterprise category.

Tata Motors has been ranked first in India in Investor Relations inthe Thomson Reuters Extel Asia (ex-Japan) Survey 2008.

Tata Motors was recognised as Top Knowledge Contributor in theWestern Regional Network Forum, Tata Group

Tata brand has been ranked 51st most valuable brand in a globalleague chart compiled by Brand Finance (BF) Plc., a UK-basedconsultancy and the Tata brand was valued at $ 11.85 billion as ofAugust 2008.

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Mr Ratan N. Tata, Chairman was conferred withNDTV Automotive Man of the Year 2008 award.

Mr Ravi Kant, Vice-Chairman was conferred withan Honorary DSc by Aston University inBirmingham, the UK.

Mr S. N. Ambardekar, Plant Head was conferred

with the Performance Excellence Award(Individual) at 11th CEOs Conference, by IndianInstitution of Industrial Engineering (IIIE).

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