project on tata group.rtf

INDIAN BUSINESS HOUSE REPORT

ON

THE TATA GROUP

INDIAN INSTITUTE OF EDUCATION AND BUSINESS MANAGEMENT

(IIEBM), PUNE

MEba(2008-2010)

1

ACKNOWLEDGEMENT

We wish to express our sincere gratitude to director jai singh marwah who gave us an opportunity to learn something new on the basis of political aspect.

It is due to him we came to know deeply about the tata group.we also thank prof. arjun madan who guided us on preparing this project.

GROUP NAME

SPRINTERS

2

GROUP LEADER

TANVI R. SAWAL

GROUP MEMBERSREG NO. SECTION

TANVI R. SAWAL336

VINDHYAS

VIVEK KAPOOR207

VINDHYAS

SHASHANK PANDEY119

VINDHYAS

VINOD KUMAR YADAV266VINDHYAS

CHANDRANSHU SRIVASTAV23VINDHYAS

SOURAV SACHDEV02

VINDHYAS

ISHAN YADAV

144SHIVALIK

Contents OF INDIAN BUSINESS HOUSESs

Section I

Page No.

1.Origin and founder.

06

2.Brief History, Vision and Mission.

09

3.Core business when started / established.

16

4.Business philosophy and policies.

20

5.Progress over the years.

23

Section - II

1.Organization and Management Structure.

28

2.Revised Vision, Mission and Outlook.

45

3.HR, Marketing, Finance & Safety Policies.

48

4.Corporate Governance.

54

5.Approach towards the Environment, Pollution and Ecology.98

6.CSR and its implementation.

103

7.Name and Performance of the Companies controlled by109

the Business House

(companies controlled by the Business House / Industry verticals

they have entered into, their Product Lines, Market Share, their

3

Major competitors, Export Earnings, Market Capitalization,

Technology absorption and major innovations).

8.Impact of LPG on the Current and Future Business Prospectus.1589.Important Milestones and Turning Points.16810. Progress over the years.171Section - III

1.Future Prospectus and Outlook.1822.Succession planning.185Section IV

1.Brief on the Stalwarts and their role in shaping the Business193

house.

2.Conclusion.203

Bibliography205

BREAK-UP OF WORK LOAD

Section I

Points 1 3 (Chandranshu Srivastav) Points 4 - 5 (Vinod Kumar Yadav)

Section II

Points 1 3 (Tanvi R. Sawal)

Points 4 7 (Vivek Kapoor)

Points 8 10 (Shashank Pandey)

Section III

4

Points 1 & 2 (Saurav Sachdev)

Section IV

Points 1 & 2 (Ishan Yadav)

Origin and founder

The story of the Tata Group of business unfolds with the birth of its founder Jamshedji Tata in the small town of Navasari in Gujarat in 1839. He breathed his last in 1904 in Germany. His parents were Nuseerwanji and Jeevanbai Tata. Nusserwanji was the first businessman in a family of Parsi Zorastrian priests. Destiny called him to Bombay where he started trading. Jamshedji joined him at the tender age of fourteen. He took admission in Elphinstone College and while still a student he married Hirabai Daboo. Jamshedji graduated in 1858 and joined his father trading firm.

Those were turbulent times. The British had just managed to ruthlessly crush the 1857 Revolt. Since the age of twenty-nine Jamshedji continued to work in his

5

fathers firm. In 1868 he started a trading company on his own with a capital of Rs.21, 000/ - His first step was to acquire a bankrupt oil mill and convert it into a cotton mill which he renamed Alexander Mill. Two years later he sold it with a good margin of profit. With this he set up a cotton mill in Nagpur in 1874. Queen Victoria had just been declared the Empress and in keeping with the times Jamshedji named it Empress Mill.Jamshedji was a unique personality. He did not just think of innovative ways of manufacturing textiles but he devised new labor practices that would satisfy the workers. In this way he was far ahead of his times. It was not just his own personal success but also of those who worked for him and his group. Jamshedji was in close contact with revolutionary thinkers and nationalists like Dadabhai Naoroji and Pherozeshah Mehta and strongly influenced by them. He came to the conclusion that economic self- sufficiency should go hand in hand with political independence. The former should be the base of the latter. Jamshedji had three key ideas in mind. He wanted to set up an iron and steel company, world class learning institution and a hydroelectric plant.

Unfortunately during his lifetime none bore fruit but he had planted the seed, which later took roots and spread its branches under the care of his successors. The only achievement that he lived to see was The Taj Mahal Hotel. It was completed in December 1903 for a princely amount of Rs.4, 21, 00,000/-In this too he was inspired by nationalist thinking. In those days the locals, that is Indians, were not allowed into the best European Hotels. Taj Mahal Hotel was a befitting reply to this discrimination.

Tata Group is a private conglomerate with headquarters at Mumbai. The present Chairman is Ratan Tata who took over from J.R.D. Tata in 1991. A member of the Tata family is always the Chairman of the group. Its operations covers many fields related to industry and allied activities concerned with know-how and its application engineering, information technology, communications, materials, automotive, chemicals energy, telecommunications, software, hotels, steel and consumer goods.The statistics and figures of Tata Group speak for themselves. Its revenue touches $967,229 million or $ 21.9 billion in 2005/06. This is equal to 2.8% of Indias GDP. There are about 246.000 employees in the Tata group as per records of 2004. Market capitalization figure is $57.6 billion. There are ninety-six companies operating in seven business sectors. Only twenty-eight of the ninety-six in Tata Group are publicly listed. Tata operates in more than forty countries across six continents. It exports products and services to one hundred and forty

6

nations. The Charitable Trust of Tata holds 65.8% of the ownership of Tata group TISCO now called Tata steel set up in 1907 Indias first iron and steel plant in Jamshedpur, which is often called Tatanagar. Production actually started in 1912. It produces steel at the lowest cost in the world. This is mainly because it is assisted by group member concern that deals with the supply of raw material like coal and iron. In 1910 was set up Tata Hydro-Electric Power Supply Company. In 1917 the Tata group made its debut in the field of consumer goods industry with the setting up of Tata Oil Mill dealing in soaps, detergents and cooking oil. 1932 saw the establishment of Tata airlines. Tata Chemicals made its appearance in 1939. Telco now known as Tata Motors started to manufacture locomotive and engineering products from 1945.

January 2007 is a watershed in the history of Tata Group. Tata steel made a successful bid for UK based Corus Group, which was one of the worlds leading steel and aluminum producers. After an unprecedented nine rounds of bidding Tata finally clinched the deal. Tata offered to buy 100% stake in Corus at 608p per share (all cash) totaling to a value of $12.04 billion. It has turned out to be the biggest acquisition by any Indian company.

Tata Power is one of the largest private sector companies in India and supplies power to Mumbai and parts of New Delhi. Then there are Tata Chemicals and Tata Pigments. In the service sector there are Tata companies dealing with hotels, general insurance and life insurance. Tata offers management, economic and financial consultancy services. Tata is one of the best names in the world of investments and shares. In the area of education Tatas publishing house of Tata McGraw Hill is a renowned name. Many renowned public sector companies and research organizations like Indian Institute of Science, Tata Institute of Fundamental Research, Tata Institute of Social Sciences, Tata Energy Research Institute and Air India (Tata Airlines) owe their origins to the name of Tata. Other educational institutes are Tata Institute of Science now Indian Institute of Science, Bangalore, Tata Institute Of Fundamental Research deemed University, Tata Management Training center, Pune, Tata Institute Of Social Science deemed University and National Centre for the Performing Arts.The name of Tata is linked to consumer durables like tea, watches (Titan) Tata Trent (Westside) to Tata Sky and even gold and diamonds like Tanishq brand of jewellery.In information systems and communications the Tata name comes with

7

Computational & Research Laboratories, INCAT, Nelco, Nelito Systems, TCS and Tata Elxsi. There are software companies Tata Interactive Systems, Tata Infotech, Tata Technologies Ltd, Tata Teleservices, Tatanet etc. Tata acquired VSNL, the Indian telecom giant from Bermuda based Canadian company named Teleglobe in 2005.

The aim of Tata Group is to improve the quality of life in the society by virtue of integrity, understanding, excellence, unity and responsibility. The entire family known as the Tata Group shares these values. Tatas contribution to Indias education, science and technology has been widely documented and respected. The blue colored log of Tata speaks for fluidity as well as fountain of knowledge. It can also be seen as a tree under which all are welcome to take refuge.

Brief History, Vision and Mission

BRIEF HISTORY

1868

Jamsetji Nusserwaji Tata starts a private trading firm laying the foundation of the Tata group.

1874

The Central India Spinning, Weaving and Manufacturing Company is set up,marking the Groupsentry into textiles.

1902

The Indian Hotels Company is incorporated to set up the taj Mahal Palace ad Tower Indias first luxury hotel which opened 1903.

8

1907

The Tata Iron and Steel Company is established to set up Indias fi rst iron and steel plant in Jamshedpur, which started production in 1912.

1910

The first of the three Tata Electric Companies,the Tata Hydro-Electric Power Supply Company,is set up to generate electricity.

1911

The Indian Institute of Science is established in Bangalore to serve as a centre for advanced learning.

1912

Tata Steel introduces eight-hour working days, well before such a system was implemented by law even in most western countries.

1917

The Tatas enter the consumer goods segment as the Tata Oil Mills Company is established to make soaps, detergents and cooking oils.

1932

9

Tata Airlines,a division of Tata Sons,is established, opening up the aviation sector in India.

1939

Tata Chemicals is established.

1945

Tata Engineering and Locomotive Company (renamed Tata Motors in 2003) is established to manufacture locomotive and engineering products. The company began manufacturing commercial vehicles in 1954 in a

JV with Daimler Benz.

1952

Pandit Jawaharlal Nehru,Indias fi rst Prime Minister,requests the Group to manufacture cosmetics inIndia; and Lakme is established.

1968

Tata Consultancy Services (TCS),Indias fi rst software services company,is established as a division of Tata Sons

1984

Titan Industries a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation

(TIDCO) is set up to manufacture watches.

10

1995

Tata Quality Management Services institutes the JRD QV Award, modelled on the Malcolm Baldrige National Quality Value Award of the United States, laying the foundation of the Tata Business Excellence Model.

1996

Tata Teleservices Limited (TTSL) is established to spearhead the Groups foray into the telecom sector.

1998

Tata Indica Indias first indigenously designed, developed and manufactured car is launched by Tata Motors, spearheading the Groups entry into passenger cars.

2000

Tata Tea acquires the Tetley Group, UK,in the fi rst major acquisition of an international brand by an Indian group.

11

2001

Tata-AIG a joint venture between the Tata Group and American International Group Inc (AIG) marks the Groups re-entry into insurance.

The Groups insurance company, New India Assurance, was nationalised in 1956

2002

The Tata Group acquires a controlling stake in Videsh Sanchar Nigam Limited Indias leading international Telecommunications service provider.

Tata Consultancy Services becomes the fi rst Indian software company to cross one billion dollars in revenues.

Titan launches Edge,the slimmest watch in the world

2004

Tata Motors acquires the heavy vehicles unit of Daewoo Motors,South Korea.Tata Steel makes its first major overseas investment in NatSteel Asia, headquartered in Singapore.

Tata Consulting Services goes public in India's private sector's largest initial public offer.

2005

Indian Hotels adds New York's iconic hotel, The Pierre, to its portfolio as also its Ginger "Smart Basics"hotels in India.

VSNL acquires Tyco Global Network,making it one of the world's largest provider of submarine cable bandwidth.

2007In a major step in its unfolding strategy of growth and globalisation, Tata Steel acquires Corus, the UK-based steelcompany, for $ 12.1 bn,the biggest overseas acquisition

by an Indian company.Tata Steel is now the worlds 6th largest steel producer with capacity of 26 million tonnes per annum and operations in 24 countries.

Vision and mission

The Tata Group is one of India' largest business conglomerates established by Jamshedji Tata (Jamshedji) in the second half of the 19th century. Jamshedji's vision for the Group was in line with nationalist goals and ideals then, and envisaged to make India self-reliant. After Jamshedji, Jehangir Ratanji Dadabhoy Tata (JRD) became the Chairman of the Tata Group and played a significant role in continuing the vision of the group. Tata's assets climbed from INR 620 million in 1939 to INR 100 billion in 1990. Tata Motors had increased its sales to INR 1 million in the year 1991 and it had rolled out 3 million vehicles in the same year. In 1991, Ratan Naval Tata (Ratan Tata/Ratan) took over the Chairmanship from JRD Tata. Although he was initially criticized for his poor performance, over the years, Ratan Tata disproved his critics. He restructured Tata Group's business operations and made the Group compete globally. Under Ratan Tata's chairmanship, Tata Consultancy Services went public and Tata Motors was listed in the New York Stock Exchange. Starting from the late 1990s, Ratan revamped the operations of Tata Steel and made it one of the lowest-cost steel producers in the world. However, as the Tatas lacks an heir who can succeed Ratan, the group is at cross-roads to decide who will be the next chairman. After Ratan Tata's retirement who would succeed him and carry the vision of the Group is a dilemma.

Our PEOPLE, by fostering team work, nurturing talent, enhancing leadership capability and acting with pace, pride and passion.

Our OFFER, by becoming the supplier of choice, delivering premium products and services and creating value with our customers.

Our INNOVATIVE APPROACH, by developing leading edge solution in technology, process and products.

13

Our CONDUCT, by providing a safe working place respecting the environment, caring for our communities and demonstrating high ethical standards.

MISSION

Our Mission in Tata is to improve the quality of life in India through leadership in targeted sectors of national economic significance to which the Group can bring a unique set of capabilities.

Core business when started / established :

14

Development of Tata Iron & Steel Company: Late 1800s-1980s

From the mid-1880s, Tata commissioned a series of surveys in India's coal-producing areas, such as Bihar and Orissa in the northeast of the subcontinent, to locate iron ore within easy reach of coal deposits and water, both essential elements in steel production. He visited the United States to seek the advice of the world's foremost metallurgical consultant, Julian Kennedy, and went to Birmingham, Alabama, to study the coking process in action. In England in 1900, he discussed his plans with the secretary of state for India, Lord George Hamilton. In India, the way had been opened for private enterprise with the introduction of a more liberalized mineral concession policy in 1899. With Julian Kennedy's help, American specialists were brought in and began surveying in 1903. After a series of disappointments, rich iron ore deposits were identified in the dense jungle in Bihar at the confluence of two rivers near Sakchi three years after Jamsetji Tata's death in 1904. Also involved in the surveying was Tata's nephew, Shapurji Saklatvala, whose health suffered so much that he was sent to London to recuperate. There, he joined his uncle's London office, which had been established some years earlier to represent the interests of the family cotton business. His energies were soon channeled away from business matters and into politics, and he became Communist member of Parliament for Battersea North in 1922.

Four years after Tata's death, his sons Dorabji and Ratanji began development of the Bihar site. A factory and township were carved from the jungle and named Jamshedpur. A conscious decision was made to retain control within India of the new enterprise, the Tata Iron and Steel Company, by seeking out Indian investors. In the face of warnings that India could not afford a flotation of this size, the Tata brothers set out to raise Rs 23.2 million in shares. Within eight weeks some 8,000 Indian investors came forward and the whole share issue was taken up. The Tatas retained 11 percent of the stock for themselves. There were enormous initial problems in clearing the Sakchi site and, once production began, in ensuring

that the coal was of a uniform quality. By 1916, however, production was meeting expectations and during World War I the company exported 1,500 miles of steel rails to Mesopotamia. Rapid expansion to support the Allied war effort was

15

followed by Depression during the 1920s with escalating prices, transport and labor difficulties, and a major earthquake in Japan, by now TISCO's biggest customer. The company had to suspend its dividend for 12 out of 13 years in this period and was on the brink of closing in 1924 when Sir Dorabji Tata had to pledge his personal fortune to secure the necessary bank loans to keep the business afloat. TISCO emerged from the 1930s, however, as the biggest steel plant in the British Empire. World War II brought a resurgence in demand for Tata products and the company specialized in the manufacture of armored cars, known as Tatanagars, which were used extensively by the British Army in the North African desert.

Following six years of almost continuous production to serve the war effort, it became imperative in the late 1940s to begin replacement of the plant. In association with Kaiser Engineering of the United States capacity was expanded and a Modernization and Expansion Program (MEP) was launched in 1951, upgraded four years later to the Two Million Ton Project (TMP) to give TISCO the capacity to produce two million tons of crude steel. This was achieved in 1958 but further expansion was put on hold during the 1960s while the country passed through a period of devaluation and recession. By 1970, however, TISCO employed 40,000 people at Jamshedpur, with a further 20,000 in the neighboring coal mines.

Government attempts to nationalize TISCO in 1971 and 1979 were defeated, in part, it was believed, to retain an efficient private sector yardstick against which the performance of public sector companies could be judged. An ever- increasing range of government legislation to bring private sector businesses into line with national economic planning on the Soviet model, however, hampered Tata's freedom to develop in the postwar period. In 1978, the government restricted TISCO's dividend to 12 percent to force it, as India's only private sector steel producer, to plough money into modernization. Expansion was restricted by a government committed to helping nationalized industry. Further difficulties were created in the late 1970s by chronic shortages of coal, power, and rail transport. An estimated Rs 45 crores of salable steel was lost during 1979-80 because of these

shortages. TISCO soldiered on, however, and in the following decade began to benefit from a relaxation of government control as a more pragmatic attitude to the

16

importance of private sector industry emerged. In 1989, the Tata group increased its stake in the steel firm to ward off any attempts by outside shareholders to gain control of the company. By 1990, TISCO remained India's largest nonpublic company, announcing a 30 percent increase in profits against a backdrop of general depression in the Indian economy as a whole.

Promoter companies

Tata Sons,Tata Industries,Group holding structure

Tata Sons and Tata Industries are the two promoter companies of the Tata Group.A more detailed profile of these companies can be accesses through the related info links on the right.

Tata Sons

This premier promoter company of the Tatas was established as a trading enterprise by group founder Jamsetji Tata in 1868.It is the promoter of all key companies of the Tata Group and holds the bulk

of sharehoding in these companies. The chairman of Tata Sons has traditionally been the chairman of the Tata Group.

Tata Sons is the owner of the Tata name and the Tata trademark, which are registered in India and several other countries.About 66 per cent of the equity capital of Tata Sons is held by philanthropic trusts endowed by members of the Tata family.

Tata Industries

Tata Industries was set up Tata Sons in 1945 as a managing agency for business it promoted. Following the abolition of the managing agency system, Tata Industries mandate was recast,in the early 1980s,to promote the Groups entry into new and high-tech areas.

17

Tata Industries has over the last two decades, initiated and promoted the Groups ventures into several sectors, including control systems, information technology ,financial services ,auto components, advanced materials and telecom hardware.

Group Holding Structure

18

Business philosophy and policies

Philosophy

The current growth of our economy and the confidence with which we face the world provide a compelling context in which Corporates need to engage with the disadvantaged sections of our society. The central theme of the Tata Group purpose statement, "Our Purpose in Tata is to improve the quality of life in the communities we serve" is a powerful guiding statement. In the coming years, it will increasingly be necessary for Corporates to encourage and generate internal passion for volunteering and Community service. This will have a positive impact not only on our competitive advantage but also on the corporate reputation.

Policies

HUMAN RESOURCE POLICY

Tata Steel recognises that its people are the primary source of its competitiveness. It is committed to equal employment opportunities for attracting the best available talent and ensuring a cosmopolitan workforce.

It will pursue management practices designed to enrich the quality of life of its employees, develop their potential and maximise their productivity.It will aim at ensuring transparency, fairness and equity in all its dealing with its employees.Tata Steel will strive continuously to foster a climate of openness, mutual trust and teamwork

Tata is committed to create an exciting work pace based on self-directed teams ,improvement and innovative work in environment.

Create work conductive to superior performance , which enable employees to realize their full potential through continuous learning and training

19

Identify and develop potential leaders for future growth.

High potential employee working in congenial work environment.


It will pursue management practices designed to enrich the quality of life of its employees, develop their potential and maximise their productivity.

It will aim at ensuring transparency, fairness and equity in all its dealing with its employees.

Tata Steel will strive continuously to foster a climate of openness, mutual trust and teamwork

Finance Policies

A Tata company shall prepare and maintain its accounts fairly and accurately and in accordance with the accounting and financial reporting standards which represent the generally accepted guidelines, principles, standards, laws and regulations of the country in which the company conducts its business affairs.

Internal accounting and audit procedures shall reflect, fairly and accurately, all of the companys business transactions and disposition of assets, and shall have internal controls to provide assurance to the companys board and shareholders that the transactions are accurate and legitimate. All required information shall be accessible to company auditors and other authorised parties and government agencies. There shall be no willful omissions of any company transactions from the books and records, no advance-income recognition and no hidden bank account and funds.

Any willful, material misrepresentation of and / or misinformation on the financial accounts and reports shall be regarded as a violation of the Code, apart from inviting appropriate civil or criminal action under the relevant laws. No employee shall make, authorise, abet or collude in an improper payment, unlawful commission or bribing.

20

Market Policies

A Tata company shall fully support the development and operation of competitive open markets and shall promote the liberalisation of trade and investment in each country and market in which it operates. Specifically, no Tata company or employee shall engage in restrictive trade practices, abuse of market dominance or similar unfair trade activities.

A Tata company or employee shall market the companys products and services on their own merits and shall not make unfair and misleading statements about competitors products and services. Any collection of competitive information shall be made only in the normal course of business and shall be obtained only through legally permitted sources and means.

Progress over the years

1868

Jamsetji Nusserwanji Tata starts a private trading firm, laying the foundation of the Tata Group.

1874

21

The Central India Spinning, Weaving and Manufacturing Company is set up, marking the Group's entry into textiles and its first large-scale industrial venture.

1902

The Indian Hotels Company is incorporated to set up the Taj Mahal Palace and Tower, India's first luxury hotel, which opened in 1903.

1907

The Tata Iron and Steel Company (now Tata Steel) is established to set up India's first iron and steel plant in Jamshedpur. The plant started production in 1912.

Sets up its first office overseas, Tata Limited in London.

1910

The first of the three Tata Electric Companies, The Tata Hydro-Electric Power Supply Company is set up. The second, Andhra Valley Power Supply Company was established in 1917 and Tata Power in 1919. The first two companies were merged with Tata Power in 2000 to form a single entity.

1911

The Indian Institute of Science is established in Bangalore to serve as a centre for advanced learning.

1912

Tata Steel introduces eight-hour working days, well before such a system was implemented by law in much of the West.

1917

The Tatas enter the consumer goods industry, with the Tata Oil Mills Company being established to make soaps, detergents and cooking oils. The company was sold to Hindustan Levers (now Unilever) in 1984.

22

1932

Tata Airlines, a division of Tata Sons, is established, opening up the aviation sector in India. Air India was nationalised in 1953.

1939

Tata Chemicals, now the largest producer of soda ash in the country, is established.

1945

Tata Engineering and Locomotive Company (renamed Tata Motors in 2003) is established to manufacture locomotive and engineering products.Tata Industries is created for the promotion and development of hi-tech industries.

1952

Jawaharlal Nehru, India's first Prime Minister, requests the Group to manufacture cosmetics in India, leading to the setting up of Lakme. The company was sold to Hindustan Levers (now Unilever) in 1997.

1954

India's major marketing, engineering and manufacturing organisation, Voltas, is established.

1962

Tata Finlay (now Tata Tea), one of the largest tea producers, is established.

Tata Exports is established. Today the company, renamed Tata International, is one of the leading export houses in India.

1968

Tata Consultancy Services (TCS), India's first software services company, is established as a division of Tata Sons.

23

1971

Tata Precision Industries, the first Tata company in Singapore, is founded to design and manufacture precision engineering products.

1984

The first 500 MW thermal power unit at the Trombay station of the Tata Electric Companies is commissioned.

1995

Tata Quality Management Services institutes the JRD QV Award, modelled on the Malcolm Baldrige National Quality Value Award of the United States, laying the foundation of the Tata Business Excellence Model.

1996

Tata Teleservices (TTSL) is established to spearhead the Group's foray into the telecom sector.

1998

Tata Indica India's first indigenously designed and manufactured car is launched by Tata Motors, spearheading the Group's entry into the passenger car segment.

1999

The new Tata Group corporate mark and logo are launched.

2000

Tata Tea acquires the Tetley Group, UK. This is the first major acquisition of an international brand by an Indian business group.

24

2001

Tata AIG a joint venture between the Tata Group and American International Group Inc (AIG) marks the Tata re-entry into insurance. (The Group's insurance company, New India Assurance, set up in 1919, was nationalised in 1956).

2002

Tata Sons acquires a controlling stake in VSNL (renamed Tata Communications in 2008), India's leading international telecommunications service provider.

Tata Consultancy Services (TCS) becomes the first Indian software company to cross one billion dollars in revenues.Titan launches Edge, the slimmest watch in the world.

2004

Tata Motors is listed on the world's largest bourse, the New York Stock Exchange, the second Group company to do so after VSNL.

Tata Motors acquires the heavy vehicles unit of Daewoo Motors, South Korea.

TCS goes public in July 2004 in the largest private sector initial public offering (IPO) in the Indian market, raising nearly $1.2 billlion.

2005

Tata Steel acquires Singapore-based steel company NatSteel by subscribing to 100 per cent equity of its subsidiary, NatSteel Asia.VSNL (now Tata Communications) acquired Tyco Global Network, making it one of the world's largest providers of submarine cable bandwidth.

Tata Sons completes 60 years of Tata operations in the US.

The Taj acquires a hotel run by Starwood, Sydney (renamed Blue) and takes over management of The Pierre, NY.

25

2006

Tata Sky satellite television service launched across the country. Foundation stone for the Tata Medical Centre unveiled in Kolkata.

2007

Tata Steel acquires the Ango-Dutch company Corus, making it the world's fifth-largest steel producer.TCS inaugurates TCS China a joint venture with the Chinese government and other partners.

Computational Research Laboratories, a division of Tata Sons, develops Eka, one of the fastest supercomputers in the world and the fastest in Asia.The Taj acquires Campton Place Hotel in San Francisco. Tata Steel celebrates its centenary on August 26, 2007.

2008

Tata Motors unveils Tata Nano, the Peoples Car, at the 9th Auto Expo in Delhi on January 10, 2008.Tata Motors acquires the Jaguar and Land Rover brands from the Ford Motor Company.

Tata Chemicals acquires General Chemical Industrial Products Inc.

organization & management Structure

ORGANISATION STRUCTURE

26

November 28, 2007

Tata Steel - Organisation Structure of Tata Steel Group

''The CFO is the conscience-keeper of the organisation'', said Tata Steel group CFO Kaushik Chatterjee as he spoke at the 2nd CFO Strategies India 2008 on Monday, 15 September in Mumbai, as he delivered insights on the remarkable rise of Tata Steel and its much-publicised acquisition of Corus last year. Sourya Biswas reports from the venue.

When companies announce their annual reports or bask in the glow of successful deals, it is often the CEOs who take centre stage. However, a lot of the groundwork for a successful venture is done by another important functionary in the corporate machinery, the chief financial officer who goes by the humbler acronym of CFO.

With rapid economic growth and increased globalisation over the last decade, the importance of the finance professional has grown manifold. And for the top finance professional in an organisation, the CFO, the changing dynamics of international business have caused him to adopt and adapt at a frenetic pace.

All these and many other details were discussed at the closed-

27

door two-day CFO Strategies India 2008 summit, organised by Dubai-based Naseba, at the Hotel Le Meridien in Mumbai on 15 and 16 September 2008. On the first day, Kaushik Chatterjee, group CFO, Tata Steel, treated the delegates to an enlightening session.

In his 30-minute presentation ''M&A - growth strategy for value creation'', Chatterjee spoke in detail on the growth of the Tata Group in general and Tata Steel in particular, all on the strength of mergers and acquisitions. Of particular interest were his views on the Corus acquisition of 2007 that had occupied the pages of pink sheets worldwide.

Chatterjee candidly admitted that the earlier growth of the Tata Group had been largely organic as previous political regimes had not been very conducive to growth by acquisition, either domestic or international. He called the 10 years from 1992 onwards as the ''decade of transformation''.

Elaborating on the Arthur D Little recommendations for the group in the early 90s, Chatterjee said that the consultancy had been quite vocal on the group's needs to be internationally competitive, something quite alien to the house of Tata then.

However, the steep growth curve that had started in 2000 with Tata Tea's acquisition of Tetley grew even steeper and faster with one acquisition after another by different group companies, topping off with the $12.11-billion takeover of Corus last year.

The meteoric growth of Tata Steel Chatterjee now spoke on the growth strategy for Tata Steel in particular and how it grew to become the sixth-largest steel producer in the world. Of course, he didn't forget to mention that his company continues to be the ''lowest-cost steel producer in the world'' as well.

As of 2003, Tata Steel was essentially a one-site company, centred in the pristine

28

locales of Jamshedpur - aptly named after the great man who envisioned the place, Shri Jamshedji Nusserwanji Tata. Although an ideal township where nature is in perfect harmony with steel manufacturing, it was, admittedly, a small operation with only 4 million tonnes annual capacity. Also, even though Tata Steel had a leadership position in finished goods like automobiles and white goods, in many other aspects it lagged behind its competitors. More importantly, as regards a foreign presence, there was none

Chatterjee spoke of how the senior management got together at this point of time to envision an aspirational target for the company, as well as brainstorm on how to achieve it. From these high-level discussions emerged a target - 15 million tonnes annual capacity by 2015, subsequently revised to 50 million tonnes - a ten-fold-plus increase in just ten-plus years.

Of course, the company's jewel in the crown Jamshedpur was to be very much a part of the action. Target capacity was set at 10 million tonnes by 2010, with gradual increments over the years: 4 to 5 million tonnes in 2005 (already achieved), 5 to 6.8 million tonnes in 2008 (on schedule) and 6.8 to 10 million tonnes in 2010 (expected).

Reason behind these ambitious numbers

Chatterjee explained that such an ambitious target was born out of the management's confidence in a vibrant world economy, with special emphasis on engines of growth like India, China, Russia, South-East Asia and Brazil. Indeed, many of the company's recent investments bear ample testimony to its belief in the strength of emerging economies.

Chatterjee made an interesting observation - whenever a country's per-capita GDP had exceeded $3,000, a metal boom had been witnessed. This was because, according to Chatterjee, there is a strong co-relation between GDP and consumption of metals. With India's GDP almost at that threshold, there was no better time for Tata Steel to spread its wings and fly.

In an aside, Chatterjee spoke of the increasing importance of branded steel in the company's scheme of operations - it now accounts for $1.5 billion in annual sales.

29

Chatterjee's assertion that steel items can be branded like FMCG items because they last longer certainly has merit.

Coming back to Tata Steel's growth plans, the management had identified that acquisition would definitely play an important part in the company's future plans. This was especially true of developed markets where the costs of establishing Greenfield projects were prohibitive

TCS unveils new, agile organisation structure

12 Mar 2008 , Mumbai : Tata Consultancy services , the leading IT services, business solutions and outsourcing organization has announced plans to organize its global operations into integrated, customer -centric units to enhance customer focus, drive operational agility and address new growth opportunities in the market.

The new global operating model will provide customers with a single view of TCS encompassing project delivery and relationship management and enable a sharper focus on the customer.

This structure will also provide more opportunities for leadership growth at all levels in the organization and encourage the next generation of leaders by empowering group heads to run their unit with growth and profit responsibilities.

As we scale up over 100,000 employees, TCS needs a structure that allows us to build a nimble organization to capture new growth opportunities, said S. Ramadorai, CEO and MD. This will create a framework that is scalable for growth across markets and provide focus on strategic initiatives like asset leveraged solutions, platform-based BPO as well other new initiatives, added Mr. Ramadorai.

The modular structure will simplify our interface with customers and drive agility in all areas of operations. The structure will also allow us to adapt to specific customer and market requirements while ensuring a uniform global service delivery, said N.

30

Chandrasekaran, Chief Operating Officer and Executive Director.

In the new operating model, all necessary delivery, domain and technology expertise and resources will be embedded in these units to promote greater collaboration with the customer. All operating units will be supported by a common group of organizational infrastructure units, such as the Technology Excellence, Process Excellence, Resource Management, and Shared Services groups.

The new structure will also support greater focus for strategic initiatives that will help drive non-linear revenue growth. In addition to TCS Financial Solutions, and the Small & Medium Business Solutions, the company has constituted a new unit for Platform BPO Solutions. These three Strategic Growth Businesses will operate as independent units that will leverage TCS sales, delivery and customer relationships as required.

Organisation Structure of Tata Steel Group

Tata Steel Group has set itself an ambition to become one of the leading players in the global steel industry. Tata Steel Group comprise of two entities, namely, Tata Steel (including Tata Steel Thailand and NatSteel Asia) and Corus Group Ltd. In order to realise this ambition, a new organisation is announced today, which is effective from 1st January 2008.

31

The Chairman of Tata Steel, Mr Ratan Tata will continue to chair the Strategy and Integration Committee. Mr.Jim Leng, Mr.B Muthuraman, Mr.Philippe Varin, Dr. Tridibesh Mukherjee, Mr.Rauke Henstra, Mr.Hemant Nerurkar, Mr.Koushik Chatterjee and Mr.Jean-Sbastien Jacques are members of this Committee.

A Group Centre is created for functions that are to be performed with a common approach across the Tata Steel Group. These functions are Technology & Integration, Finance, Strategy, Corporate Relations & Communications and Global Minerals. The executives responsible for these functions will report to the MD of Tata Steel and the CEO of Corus:

Dr Tridibesh Mukherjee is appointed as Group Director, Technology & Integration

Mr Koushik Chatterjee is appointed as Group Chief Financial Officer Mr Jean-Sbastien Jacques is appointed as Group Director, Strategy Mr Manzer Hussain is appointed as Group Director, Communications Mr Arun D Baijal is appointed as Group Director Global Minerals

Both Tata Steel and Corus entities will have Executive Committees chaired by the MD, Mr B Muthuraman and the CEO, Mr Philippe Varin respectively.

A Joint Executive Committee for Tata Steel Group will meet quarterly to review overall performance against the Group ambition. This committee will be co-chaired by the MD of Tata Steel and the CEO of Corus.

MANAGEMENT STRUCTURE

32

There are two decision -making bodies that define and direct the business endeavours of the Tata Group. These are called the Group Executive Office and the Group Corporate Centre.

Group Executive Office :

The Group Executive Office (GEO) defines and reviews the business activities of the Tata Group and is involved in implementing programmes in corporate governance, human resources, the environment, etc. The chief objective of the GEO is to make the Tata Group more synergistic; it does this by strengthening the relationship between the Group and its companies.

The GEO creates a shared understanding of a Tata company's current activities, its strengths and its weaknesses. It then addresses the most strategic issues facing the company. Apart from this, the GEO has reviewed the Group's business portfolio and clustered companies into seven business sectors. The GEO assesses what unique value a company adds to a particular business sector and, conversely, what unique value the Group can bring to that company.

Besides Chairman Ratan N Tata, the GEO comprises R Gopalakrishnan, Ishaat Hussain, Kishor Chaukar,Arunkumar Gandhi and Alan Rosling.

Group Corporate Centre

The Group Corporate Centre (GCC) is a forum at which broad policy issues relating to the growth of Tata companies are reviewed and the entry into new areas are discussed. The GCC also plays a key role in protecting and promoting the Tata brand in India and across the globe.The GCC also provides advisory services to Tata companies in the areas of Human Resources, Finance,Legal, and other functional areas as and when required.Apart from this, the GCC from time to time,

33

reviews Tata companies business portfolios across business sectors. The GCC comprises Chairman Ratan N Tata, NA Soonawala, JJ Irani, RK Krishna Kumar, R Gopalakrishnan,Ishaat Hussain, Kishor Chaukar, Arunkumar Gandhi and Alan Rosling.

BOARD OF DIRECTORS

(As on 14th April, 2008)

Mr R N Tata(Chairman)

Mr James Leng(Non - Executive Deputy Chairman)

Mr Nusli N(Company Director) Wadia

34

Mr S M Palia(Company Director)

Mr Suresh(Financial Institutions' Nominee) Krishna

Mr Ishaat(Board Member) Hussain

Dr Jamshed J(Board Member) Irani

Mr Subodh(Board Member) Bhargava

Mr Jacques(Non - Executive Independent SchravenDirector)

Dr Anthony(Non - Executive Independent HaywardDirector)

Mr Philippe(Non - Executive Non independent VarinDirector)

Mr B(Managing Director) Muthuraman

Dr T Mukherjee(Non Executive Director)

Mr Andrew(Non Executive IndependentRobbDirector)

MANAGEMENT

(As on 14th April, 2008)

Mr BManaging Director

Muthuraman

Mr H MChief Operating Officer

Nerurkar

Mr A D BaijalVice President & Tata Steel

Group Director, Global Mineral

Resources

35

Mr R P SinghVice President, Engineering

Services & Projects

Mr KoushikVice President, Finance & Tata

ChatterjeeSteel Group CFO

Mr Anand SenVice President, Flat Products &

TQM

Mr AbanindraVice President, Raw Materials

M. Misra& CSI

Mr Varun KVice President, Chattisgarh

JhaProject

Mr OmVice President, Shared

NarayanServices

MrChief Human Resource Officer

Radhakrishnan

Nair

Mr ParthaVice President, Corporate

SenguptaServices

Mr H JhaVice President, Safety & Long

Products

Mr N K MisraVice President & Tata Steel

Group Head, M&A

Mr B K SinghVice President, Orissa Project

Mr J C BhamCompany Secretary

Mr H C KharkarVice President, MD Office,

Mumbai

MANAGEMENT STRUCTURE

Board of Directors:

36

Mr.H.M.NerurkarMr. Harsh K JhaMr. Ajoy RoyChairmanManaging DirectorIndependent Director

Mr. A. C. WadhawanMr. P. K. JhaMr. M. V. RaoIndependent DirectorNon-Independent DirectorIndependent Director

Mr. Ashok KumarMr. Manish GuptaMr. Dipak BanerjeeNon-Independent DirectorIndependent DirectorIndependent Director

Mr. A. K. BasuMr. V. S. N. MurtyIndependent DirectorNon-Independent Director

Senior Management Team

Senior Management Team:

37

Mr. Subhasis Dey

CFO and Company Secretary

Mr. Sudhin C. Mitter

General Manager, Marketing & Sales

Mr. Rajesh Mishra

C.E.O. Tata Metaliks Kubota Pipes Ltd.

Mr. Debasish Misra

General Manager, Redi SBU

Dr. Ashok Mohanty

Chief of Human Resources (Corporate)

Mr.P.Daniel Kumar

Chief Manufacturing System, Kharagpur

Tata Steel, formerly known as TISCO (Tata Iron and Steel Company Limited), is the world's 5th largest and India's largest steel company with an annual crude steel capacity of 28 million tonnes. It is a Fortune Global 500 company with a rank of 315. It is based in Mumbai, India. It is part of Tata Group of companies. Tata Steel is also India's second-largest and second-most profitable company in private sector

38

with consolidated revenues of Rs 1,32,110 crore and net profit of over Rs 12,350 crore during the year ended March 31, 2008.

Its main plant is located in Jamshedpur, Jharkhand, though with its recent acquisitions, the company has become a multinational with operations in various countries. The Jamshedpur plant contains the DCS supplied by Honeywell.The registered office of Tata Steel is in Mumbai. In the year 2000, the company was recognised as the world's lowest-cost producer of steel. The company was also recognized as the world's best steel producer by World Steel Dynamics in 2005. The company is listed on BSE and NSE; and employs about 82,700 people (as of 2007).

Management

Tata Steel is a limited company registered in India under the Companies Act, 1956.

BOARD OF DIRECTORS (As on 14th April, 2008)

Mr R N Tata (Chairman) Mr James Leng (Non - Executive Deputy Chairman) Mr Nusli N Wadia (Company Director) Mr S M Palia (Company Director) Mr Suresh Krishna (Financial Institutions' Nominee) Mr Ishaat Hussain (Board Member) Dr Jamshed J Irani (Board Member) Mr Subodh Bhargava (Board Member) Mr Jacques Schraven (Non - Executive Independent Director) Dr Anthony Hayward (Non - Executive Independent Director) Mr Philippe Varin (Non - Executive Non independent Director) Mr B Muthuraman (Managing Director) Dr T Mukherjee (Non Executive Director) Mr Andrew Robb (Non Executive Independent Director)

MANAGEMENT (As on 14th April, 2008)

Mr B Muthuraman (Managing Director) Mr H M Nerurkar (Chief Operating Officer) Mr A D Baijal (Vice President & Tata Steel Group Director, Global

39

Mineral Resources) Mr R P Singh (Vice President, Engineering Services & Projects) Mr Koushik Chatterjee (Vice President, Finance & Tata Steel Group CFO) Mr Anand Sen (Vice President, Flat Products & TQM) Mr Abanindra M. Misra (Vice President, Raw Materials & CSI) Mr Varun K Jha (Vice President, Chattisgarh Project) Mr Om Narayan (Vice President, Shared Services) Mr Radhakrishnan Nair (Chief Human Resource Officer) Mr Partha Sengupta (Vice President, Corporate Services) Mr H Jha (Vice President, Safety & Long Products) Mr N K Misra (Vice President & Tata Steel Group Head, M&A) Mr B K Singh (Vice President, Orissa Project) Mr J C Bham (Company Secretary) Mr H C Kharkar (Vice President, MD Office, Mumbai)

TATA STRATEGIC MANAGEMENT STRUCTURE

Set up in 1991, the Tata Strategic Management Group (Tata Strategic) ranks among the top three management consulting fi rms in South Asia. Mumbai- based but with a presence in SAARC and West Asian countries, Tata Strategic has completed over 500 engagements with more than

100 clients across countries and industry sectors. Its clientele includes medium to large private sector companies in India, multi-national corporations

including select Fortune 500 companies, public sector enterprises, the Government of India and a cross-section of companies within the Tata Group.

40

Today over 60% of its business comes from non- Tata clients and 25% from international clients. Tata Strategic has a team of more than 70 consultants, recruited from top business schools in India and abroad or laterally from industry. The team is aided by a panel of experts, each with over 20 years of industry domain expertise.

Tata Strategic works with clients across the following industry sectors:

Automotive and engineering

Chemicals and energy Consumer products and retail Telecom, media and technology Infrastructure and Government

Tata Strategic addresses top-of-mind needs of the client top management through a range of contemporary offerings spanning the areas of strategy formulation, organisation effectiveness, competitiveness enhancement and business analytics.

International Experience

Tata Strategic has on -site assignments from clients in Sri Lanka, Bangladesh and multiple countries in West Asia (Saudi Arabia, Yemen and Dubai) . Clients from Germany, UK and the United States also work with Tata Strategic frequently. Tata Strategic also formulates India entry plans for global companies and provides implementation support to them.

Tata Steel Ltd has informed about the following:

- Tata Steel Group has announced a new organization structure effective from

41

January 01, 2008 as follows:

Tata Steel Group comprises of two entities, namely, Tata Steel (including Tata Steel Thailand and NatSteel Asia) and Corus Group Ltd. In order to realise this ambition, a new organisation is announced on November 28, 2007, which is effective from January 01, 2008.

The Chairman of Tata Steel, Mr. Ratan Tata will continue to chair the Strategy and Integration Committee. Mr. Jim Leng, Mr. B Muthuraman, Mr. Philippe Varin, Dr. Tridibesh Mukherjee, Mr. Rauke Henstra, Mr. Hemant Nerurkar, Mr. Koushik Chatterjee and Mr. Jean-Sebastien Jacques are members of this Committee.

A Group Centre is created for functions that are to be performed with a common approach across the Tata Steel Group. These functions are Technology & Integration, Finance, Strategy, Corporate Relations & Communications and Global Minerals.

The executives responsible for these functions will report to the MD of Tata Steel and the CEO of Corus:

Dr. Tridibesh Mukherjee is appointed as Group Director, Technology & Integration

Mr. Koushik Chatterjee is appointed as Group Chief Financial Officer Mr. Jean-Sebastien Jacques is appointed as Group Director, Strategy Mr. Manzer Hussain is appointed as Group Director, Communications Mr. Arun D Baijal is appointed as Group Director Global Minerals

Both Tata Steel and Corus entities will have Executive Committees chaired by the MD, r. B Muthuraman and the CEO, Mr. Philippe Varin respectively.

A Joint Executive Committee for Tata Steel Group will meet quarterly to review

42

overall performance against the Group ambition. This committee will be co-chaired by the MD of Tata Steel and the CEO of Corus.

Revised Vision, Mission and Outlook

REVISED VISION

43

Ratan Tata Quotes

One hundred years from now, I expect the Tatas to be much bigger than it is now. More importantly, I hope the Group comes to be regarded as being the best in India.. best in the manner in which we operate, best in the products we deliver, and best in our value systems and ethics. Having said that, I hope that a hundred years from now we will spread our wings far beyond India.

Vision, implementation, risk taking, and meeting the needs of a changing economy are all apparent in Tata's pet project: the creation of Indica. "I believed in the product. In fact I was very much involved in conceiving its initial fundamentals and design parameters. Yes, it's like seeing a child being born, almost limb-by-limb.

Today we have in excess of 50,000 Indicas on the road and I feel a sense of great exhilaration every time I come up next to one. I have an urge to roll my window down, tap on the Indica's window and ask the owner: How do you like it?" A look at the Tatas strategic plan for Indica.

At the threshold of stepping down from group executive chairmanship, today Ratan Tata can see the results of his grand vision for the group all around him. The Tata Group has turned around loss making companies (Tata Motors), sold non core businesses (ACC, Tomco, Lakme, Goodlass Nerolac, Merind), enhanced existing businesses (Tata Steel, Tata Chemicals, Tata Consultancy Services), entered new industries (telecom), pioneered India's first home grown car (Indica), and is now firmly set on its growth curve.

"My main contribution, if you like, is to move us into the high tech areas of business, partly in IT, partly in telecommunications, partly in process control," Tata once told CNBC's Sue Herera. Today, the group has combined revenues of $11.2bn or Rs535bn or 2.4% of India's gross domestic product (GDP). The guiding principle behind Tata's vision is to change with the times. In his own words, "Weshould become a younger organization, an organization of our time, more risktaking, less risk averse."

44

Mission

The Group Purpose

Our purpose in Tata is to improve the quality of life in India through leadership in targeted sectors of national economic significance to which the Group can bring a unique set of capabilities.

Our past success in delivering such purpose provides the basis for our belief in the future and our role in it. Our Group size and scale will provide management and financial resources to profitably cater to the emerging opportunities and to develop globally competitive skills to succeed in this endeavour.

Our long-term success requires us to considerably focus our portfolio, our management efforts and our investment priorities so that Group synergy is brought to bear at the point of delivering value to the customer. The enormous Group resources : in people and finance needs to be re-architectured so that the whole is larger than the sum of its individual parts.

Our heritage invokes trust among consumers, employees, shareholders and the community. This is a precious heritage, unique in India, and will not only be preserved, but also enriched by formalising the high standards of behaviour

45

expected from our employees and the companies in the years to come.

The Tata name is a unique asset representing Leadership with Trust. Leveraging this asset to unify our companies is the route to long-term success and delivery of returns to the shareholder in excess of the cost of capital.At the Tata Group our purpose is to improve the quality of life of the communities we serve. We do this through leadership in sectors of national economic signifi cance, to which the group brings a unique set of capabilities.This requires us to grow aggressively in focused areas of business.Our heritage of returning to society what we earn evokes trust amongconsumers, employees, shareholders and the community. This heritage will be continuously enriched by formalising the high standards of behaviour expected from employees and companies.The Tata name is a unique asset representing leadership with trust Leveraging this asset to enhance group synergy and becoming globally competitive is the route to sustained growth and long-term success.

HR, Marketing, Finance & Safety Policies

HUMAN RESOURCE POLICY





Tata is committed to create an exciting work pace based on self-directed teams ,improvement and innovative work in environment.

46

Create work conductive to superior performance , which enable employees to realize their full potential through continuous learning and training Identify and develop potential leaders for future growth. High potential employee working in congenial work environment.





Safety Policy

A Tata company shall strive to provide a safe, healthy, clean and ergonomic working environment for its people. It shall prevent the wasteful use of natural resources and be committed to improving the environment, particularly with regard to the emission of greenhouse gases, and shall endeavour to offset the effect of climate change in all spheres of its activities.

A Tata company, in the process of production and sale of its products and services, shall strive for economic, social and environmental sustainability.

o Comply with all applicable legislation, regulations and other

requirements.

47

Enhance employee's knowledge, skill and consequent involvement in Environment, Safety, Health and Quality Management Programmes.

Make systematic and progressive reduction of losses in operational areas by deploying Total Productive Maintenance.

Eliminate, reduce or control hazards/ risks arising out of our operations and products. Preserve and develop environment by reduction in pollution in all its forms and nurture the eco-system within and outside the organisation.

Harmonise its economic progress with social and community considerations. The Company will institutionalise Evaluation and Improvement system in business practices to make rapid progress. This policy will be made available to all the interested parties on demand.

Finance Policies

A Tata company shall prepare and maintain its accounts fairly and accurately and in accordance with the accounting and financial reporting standards which represent the generally accepted guidelines, principles, standards, laws and regulations of the country in which the company conducts its business affairs.

Internal accounting and audit procedures shall reflect, fairly and accurately, all of the

48

companys business transactions and disposition of assets, and shall have internal controls to provide assurance to the companys board and shareholders that the transactions are accurate and legitimate. All required information shall be accessible to company auditors and other authorised parties and government agencies. There shall be no willful omissions of any company transactions from the books and records, no advance-income recognition and no hidden bank account and funds.


Market Policies

A Tata company shall fully support the development and operation of competitive open markets and shall promote the liberalisation of trade and investment in each country and market in which it operates. Specifically, no Tata company or employee shall engage in restrictive trade practices, abuse of market dominance or similar unfair trade activities.

A Tata company or employee shall market the companys products and services on their own merits and shall not make unfair and misleading statements about competitors products and services. Any collection of competitive information shall be made only in the normal course of business and shall be obtained only through legally permitted sources and means.

Outlook

49

Group chairman Ratan Tata speaker on a wide range of issue concerning the Tata Group and its pace in a world changing dramatically than ever before what will be the nature ad scope of Tata Group engagement in the coming years with a world changing more rapidly than ever before. Here are numerous questions and who better to address and opportunities before the group as it continuous reinforcing and reinventing itself in India and in the world.

Over the next five to seven years the group has to start looking seriously and strategically at creating brand awareness for ourselves in new business commercially and strategically in this regions the group also says that in commodities the brand is not as important as it is in product.

The group chairman Ratan Tata says that we are not promoting our one brand but we are getting serious of properties that have their one brand it can also happen with a company like Titan if you are willing to spend huge amount of money propagating the brand it will work.

S&P keeps negative outlook for Tata Motors

Mumbai, July 9 Standard & Poors Ratings Services said today it kept its BB corporate credit rating on Tata Motors on CreditWatch with negative implications, pending finalisation of the long-term financing plans for funding the companys purchase of Jaguar and Land Rover from Ford. At the same time, Standard & Poors ratings on all Tata Motors rated debt remain on CreditWatch with negative implications.

The rating on Tata Motors was lowered on April 4, 2008, to BB, from BB+, after the announcement of the agreement with Ford Motor Co for the purchase of Jaguar and Land Rover.

Tata Motors has paid about $2.3 billion in cash for Jaguar and Land Rover (comprising brands, plants, and intellectual property rights).

50

Ford has contributed $600 million to the Jaguar-Land Rover (JLR) pension plans. To fund the initial transaction, Tata Motors raised short-term bridge facilities of $3 billion, which it plans to repay through a mix of fresh equity infusion, liquidation of investments, and long-term debt, said Standard & Poors credit analyst Mr Anshukant Taneja.

The company has obtained a board approval to raise up to $1.05 billion through a rights issue of equity shares, up to $750 million of optionally convertible preference shares, and $500 million-$600 million through a separate issuance of securities in overseas markets.

51

Corporate Governance

Tata Code of Conduct

This comprehensive document serves as the ethical road map for Tata employees and companies, and provides the guidelines by which the Group conducts its businesses.

Clause:1 National interest

The Tata Group is committed to benefit the economic development of the countries in which it operates. No Tata company shall undertake any project or activity to the detriment of the wider interests of the communities in which it operates.

52

A Tata companys management practices and business conduct shall benefit the country, localities and communities in which it operates, to the extent possible and affordable, and shall be in accordance with the laws of the land.

A Tata company, in the course of its business activities, shall respect the culture, customs and traditions of each country and region in which it operates. It shall conform to trade procedures, including licensing, documentation and other necessary formalities, as applicable.

Clause:2

Financial reporting and recordsA Tata company shall prepare and maintain its accounts fairly and accurately and in accordance with the accounting and financial reporting standards which represent the generally accepted guidelines, principles, standards, laws and regulations of the country in which the company conducts its business affairs.

Internal accounting and audit procedures shall reflect, fairly and accurately, all of the companys business transactions and disposition of assets, and shall have internal controls to provide assurance to the companys board and shareholders that the transactions are accurate and legitimate. All required information shall be accessible to company auditors and other authorised parties and government

agencies. There shall be no willful omissions of any company transactions from the books and records, no advance-income recognition and no hidden bank account and funds.


Clause:3 Competition

A Tata company shall fully support the development and operation of competitive

53

open markets and shall promote the liberalisation of trade and investment in each country and market in which it operates. Specifically, no Tata company or employee shall engage in restrictive trade practices, abuse of market dominance or similar unfair trade activities.

A Tata company or employee shall market the companys products and services on their own merits and shall not make unfair and misleading statements about competitors products and services. Any collection of competitive information shall be made only in the normal course of business and shall be obtained only through legally permitted sources and means

Clause:4

Equal opportunities employerA Tata company shall provide equal opportunities to all its employees and all qualified applicants for employment without regard to their race, caste, religion, colour, ancestry, marital status, gender, sexual orientation, age, nationality, ethnic origin or disability.

Human resource policies shall promote diversity and equality in the workplace, as well as compliance with all local labour laws, while encouraging the adoption of international best practices.

Employees of a Tata company shall be treated with dignity and in accordance with the Tata policy of maintaining a work environment free of all forms of harassment, whether physical, verbal or psychological. Employee policies and practices shall be administered in a manner consistent with applicable laws and other provisions of this Code, respect for the right to privacy and the right to be heard, and that in all matters equal opportunity is provided to those eligible and decisions are based on merit.

Clause:5

Gifts and donations

A Tata company and its employees shall neither receive nor offer or make, directly or indirectly, any illegal payments, remuneration, gifts, donations or comparable benefits that are intended, or perceived, to obtain uncompetitive favours for the

54

conduct of its business. The company shall cooperate with governmental authorities in efforts to eliminate all forms of bribery, fraud and corruption.

However, a Tata company and its employees may, with full disclosure, accept and offer nominal gifts, provided such gifts are customarily given and are of a commemorative nature. Each company shall have a policy to clarify its rules and regulations on gifts and entertainment, to be used for the guidance of its employees.

Clause:6 Government agencies

A Tata company and its employees shall not, unless mandated under applicable laws, offer or give any company funds or property as donation to any government agency or its representative, directly or through intermediaries, in order to obtain any favourable performance of official duties. A Tata company shall comply with government procurement regulations and shall be transparent in all its dealings with government agencies.

Clause:7

Political non-alignment

A Tata company shall be committed to and support the constitution and governance systems of the country in which it operates.

A Tata company shall not support any specific political party or candidate for political office. The companys conduct shall preclude any activity that could be interpreted as mutual dependence / favour with any political body or person, and shall not offer or give any company funds or property as donations to any political party, candidate or campaign.

55

Clause:8

Health, safety and environmentA Tata company shall strive to provide a safe, healthy, clean and ergonomic working environment for its people. It shall prevent the wasteful use of natural resources and be committed to improving the environment, particularly with regard to the emission of greenhouse gases, and shall endeavour to offset the effect of climate change in all spheres of its activities.

A Tata company, in the process of production and sale of its products and services, shall strive for economic, social and environmental sustainability.

Clause:9

Quality of products and servicesA Tata company shall be committed to supply goods and services of world class quality standards, backed by after- sales services consistent with the requirements of its customers, while striving for their total satisfaction. The quality standards of the companys goods and services shall meet applicable national and international standards.

A Tata company shall display adequate health and safety labels, caveats and other necessary information on its product packaging.

Clause:10

Corporate citizenship

A Tata company shall be committed to good corporate citizenship, not only in the compliance of all relevant laws and regulations but also by actively assisting in the improvement of quality of life of the people in the communities in which it operates. The company shall encourage volunteering by its employees and collaboration with community groups.

Tata companies are also encouraged to develop systematic processes and conduct management reviews, as stated in the Tata corporate sustainability protocol, from time to time so as to set strategic direction for social development activity.

56

The company shall not treat these activities as optional, but should strive to incorporate them as an integral part of its business plan.

Clause:11Cooperation of Tata companies

A Tata company shall cooperate with other Tata companies including applicable joint ventures, by sharing knowledge and physical, human and management resources, and by making efforts to resolve disputes amicably, as long as this does not adversely affect its business interests and shareholder value.

In the procurement of products and services, a Tata company shall give preference to other Tata companies, as long as they can provide these on competitive terms relative to third parties.

Clause:12

Public representation of the company and the GroupThe Tata Group honours the information requirements of the public and its stakeholders. In all its public appearances, with respect to disclosing company and business information to public constituencies such as the media, the financial community, employees, shareholders, agents, franchisees, dealers, distributors and importers, a Tata company or the Tata Group shall be represented only by specifically authorised directors and employees. It shall be the sole responsibility of these authorised representatives to disclose information about the company or the Group.

Clause:13

Third party representation

Parties which have business dealings with the Tata Group but are not members of the Group, such as consultants, agents, sales representatives, distributors, channel partners, contractors and suppliers, shall not be authorised to represent a Tata company without the written permission of the Tata company, and / or if their business conduct and ethics are known to be inconsistent with the Code.

Third parties and their employees are expected to abide by the Code in their interaction with, and on behalf of, a Tata company. Tata companies are encouraged

57

to sign a non -disclosure agreement with third parties to support confidentiality of information.

Clause:14

Use of the Tata brandThe use of the Tata name and trademark shall be governed by manuals, codes and agreements to be issued by Tata Sons. The use of the Tata brand is defined in and regulated by the Tata Brand Equity and Business Promotion Agreement. No third party or joint venture shall use the Tata brand to further its interests without specific authorisation.

Clause:15 Group policies

A Tata company shall recommend to its board of directors the adoption of policies and guidelines periodically formulated by Tata Sons.

Clause:16 Shareholders

A Tata company shall be committed to enhancing shareholder value and complying with all regulations and laws that govern shareholder rights. The board of directors of a Tata company shall duly and fairly inform its shareholders about all relevant aspects of the companys business, and disclose such information in accordance with relevant regulations and agreements.

Clause:17 Ethical conduct

Every employee of a Tata company, including full-time directors and the chief executive, shall exhibit culturally appropriate deportment in the countries they operate in, and deal on behalf of the company with professionalism, honesty and integrity, while conforming to high moral and ethical standards. Such conduct shall be fair and transparent and be perceived to be so by third parties.

58

Every employee of a Tata company shall preserve the human rights of every individual and the community, and shall strive to honour commitments.

Every employee shall be responsible for the implementation of and compliance with the Code in his / her environment. Failure to adhere to the Code could attract severe consequences, including termination of employment.

Clause:18

Regulatory complianceEmployees of a Tata company, in their business conduct, shall comply with all applicable laws and regulations, in letter and spirit, in all the territories in which they operate. If the ethical and professional standards of applicable laws and regulations are below that of the Code, then the standards of the Code shall prevail.

Clause:19

Concurrent employmentConsistent with applicable laws, an employee of a Tata company shall not, without the requisite, officially written approval of the company, accept employment or a position of responsibility (such as a consultant or a director) with any other company, nor provide freelance services to anyone, with or without remuneration. In the case of a full-time director or the chief executive, such approval must be obtained from the board of directors of the company.

Clause:20 Conflict of interest

An employee or director of a Tata company shall always act in the interest of the company, and ensure that any business or personal association which he / she may have does not involve a conflict of interest with the operations of the company and his / her role therein.

59

Independent directors of a Tata company shall comply with applicable laws and regulations of all the relevant regulatory and other authorities. As good governance practice they shall safeguard the confidentiality of all information received by them by virtue of their position, but they need not be bound by all other conflicts that are applicable to employees or executive directors, as indicated below.

An employee, including the executive director (other than independent director) of a Tata company, shall not accept a position of responsibility in any other non-Tata company or not-for-profit organisation without specific sanction.

The above shall not apply to (whether for remuneration or otherwise):

Nominations to the boards of Tata companies, joint ventures or associate companies.

Memberships / positions of responsibility in educational / professional bodies, wherein such association will benefit the employee / Tata company.

Nominations / memberships in government committees / bodies or organisations.

Exceptional circumstances, as determined by the competent authority.

Competent authority, in the case of all employees, shall be the chief executive, who in turn shall report such exceptional cases to the board of directors on a quarterly basis. In case of the chief executive and executive directors, the Group Corporate Centre shall be the competent authority.

An employee or a director of a Tata company shall not engage in any business, relationship or activity which might conflict with the interest of his / her company or the Tata Group. A conflict of interest, actual or potential, may arise where, directly or indirectly

a) An employee of a Tata company engages in a business, relationship or activity with anyone who is party to a transaction with his / her company.

60

An employee is in a position to derive an improper benefit, personally or to any of his / her relatives, by making or influencing decisions relating to any transaction.

An independent judgement of the companys or Groups best interest cannot be exercised.

The main areas of such actual or potential conflicts of interest shall include the following:

An employee or a full-time director of a Tata company conducting business on behalf of his / her company or being in a position to influence a decision with regard to his / her companys business with a supplier or customer where his / her relative is a principal officer or representative, resulting in a benefit to him / her or his / her relative.

Award of benefits such as increase in salary or other remuneration, posting, promotion or recruitment of a relative of an employee of a Tata company, where such an individual is in a position to influence decisions with regard to such benefits.

The interest of the company or the Group can be compromised or defeated.

Notwithstanding such or any other instance of conflict of interest that exist due to historical reasons, adequate and full disclosure by interested employees shall be made to the companys management. It is also incumbent upon every employee to make a full disclosure of any interest which the employee or the employees immediate family, including parents, spouse and children, may have in a family

business or a company or firm that is a competitor, supplier, customer or distributor of or has other business dealings with his / her company.

Upon a decision being taken in the matter, the employee concerned shall be required to take necessary action, as advised, to resolve / avoid the conflict.

If an employee fails to make the required disclosure and the management of its own accord becomes aware of an instance of conflict of interest that ought to have been disclosed by the employee, the management shall take a serious view of the matter and consider suitable disciplinary action against the employee.

61

Clause:21

Securities transactions and confidential informationAn employee of a Tata company and his / her immediate family shall not derive any benefit or counsel, or assist others to derive any benefit, from access to and possession of information about the company or Group or its clients or suppliers that is not in the public domain and, thus, constitutes unpublished, price-sensitive insider information.

An employee of a Tata company shall not use or proliferate information that is not available to the investing public, and which therefore constitutes insider information, for making or giving advice on investment decisions about the securities of the respective Tata company, Group, client or supplier on which such insider information has been obtained.

Such insider information might include (without limitation) the following:

Acquisition and divestiture of businesses or business units.

Financial information such as profits, earnings and dividends. Announcement of new product introductions or developments. Asset revaluations. Investment decisions / plans. Restructuring plans. Major supply and delivery agreements. Raising of finances.

An employee of a Tata company shall also respect and observe the confidentiality of information pertaining to other companies, their patents, intellectual property rights, trademarks and inventions; and strictly observe a practice of non-disclosure.

Clause:22

Protecting company assets

The assets of a Tata company shall not be misused; they shall be employed primarily and judiciously for the purpose of conducting the business for which they

62

are duly authorised. These include tangible assets such as equipment and machinery, systems, facilities, materials and resources, as well as intangible assets such as information technology and systems, proprietary information, intellectual property, and relationships with customers and suppliers.

Clause:23

CitizenshipThe involvement of a Tata employee in civic or public affairs shall be with express approval from the chief executive of his / her company, subject to this involvement having no adverse impact on the business affairs of the company or the Tata Group.

Clause:24

Integrity of data furnishedEvery employee of a Tata company shall ensure, at all times, the integrity of data or information furnished by him/her to the company. He/she shall be entirely responsible in ensuring that the confidentiality of all data is retained and in no circumstance transferred to any outside person/party in the course of normal operations without express guidelines from or, the approval of the management.

Clause:25 Reporting concerns

Every employee of a Tata company shall promptly report to the management, and / or third- party ethics helpline, when she / he becomes aware of any actual or possible violation of the Code or an event of misconduct, act of misdemeanour or act not in the companys interest. Such reporting shall be made available to suppliers and partners, too.

Any Tata employee can choose to make a protected disclosure under the whistleblower policy of the company, providing for reporting to the chairperson of the audit committee or the board of directors or specified authority. Such a protected disclosure shall be forwarded, when there is reasonable evidence to conclude that a violation is possible or has taken place, with a covering letter, which shall bear the identity of the whistleblower.

63

The company shall ensure protection to the whistleblower and any attempts to intimidate him / her would be treated as a violation of the Code.

Articles on governance

The covenant and the code

Long before corporate governance became a buzzword in industry circles, Tata Steel was following the letter and spirit of the rules that define ethical business behaviour

Companies learned long back that having the complete cooperation and participation of their employees meant improved efficiencies and, consequently, superior products. Now they have begun understanding that a strong commitment from investors and other stakeholders can lead to similar payoffs for the organisation. Both are elements of a corporate governance template which demands that broad-based systems of accountability be built into the spinal structures of companies. Government regulations can be a guide, at best, in this process. More important is a culture of self-policing.

Tata Steel has imbibed this culture better than most. Much before the business world woke up to the importance of evolving a 'method' for corporate governance, Tata Steel had already been practising its substance. It is no surprise, therefore, that the ministry of finance, Government of India, awarded the company the national award for excellence in corporate governance in 2000. Two years later Tata Steel bagged the golden peacock award for excellence in corporate governance and corporate social responsibility from the Institute of Directors, an apex association of company directors.

Deputy managing director AN Singh defines the Tata Steel approach thus: "Corporate governance is the ethical and responsible behaviour of a corporation towards its owners, its shareholders, but it has a fallout effect on other constituents too." Tata Steel has engaged all its stakeholders a broad category that includes employees, regulators, the communities in and around the areas where it operates, and shareholders at every stage of its evolution. The shareholders, though they are the farthest away and the most fragmented, remain at the heart of the company.

64

"We have to ensure a transparent and fair administration so that the money the shareholders put in is safe and productive," says Mr Singh. To ensure this Tata Steel has a three-pronged governance structure that provides for checks and balances throughout its operation.

The first layer of this structure is the law of the land. Statutes on the number of non-executive and independent directors, board procedure, and terms of office are followed with rigour. Tata Steel's balance sheet is certified as fair and true by its chief executive officer and its chief finance officer, and the company also submits a report on various corporate governance parameters. It has mandated committees for audit, remuneration for directors and investor grievances. Tata Steel's investor grievance committee, which looks into complaints about transfer of shares, receipt of balance sheet and dividends, meets twice or thrice a year and checks if all issues have been resolved satisfactorily.

The second tier of Tata Steel's corporate governance edifice is based on the Tata code of conduct, a comprehensive set of tenets that all Tata employees have to adhere to. The code goes way beyond government-mandated regulations. For example, the offices of non-executive chairman and managing director are s

project on tata group.rtf

Documents