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TATA Motors
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HISTORY OF TATA MOTER
Tata Motors is a part of the Tata Group manages its share-holding
through Tata Sons. The company was established in 1935 as a locomotive
manufacturing unit and later expanded its operations to commercial
vehicle sector in 1954 after forming a joint venture with Daimler-Benz
AG of Germany. Despite the success of its commercial vehicles, Tata
realized his company had to diversify and he began to look at other
products. Based on consumer demand, he decided that building a small
car would be the most practical new venture. So in 1998 it launched Tata
Indica, India's first fully indigenous passenger car. Designed to be
inexpensive and simple to build and maintain, the Indica became an
instant hit in the Indian market. It was also exported to Europe namely
the UK and Italy. Since then it has never looked back. In 2004 it
acquired Tata Daewoo Commercial Vehicle and in late 2005 it acquired
21% Aragonese Hispano Carrocera giving it controlling rights of the
company. It has formed a Joint Venture with Marcopolo of Brazil and
introduced low-floor buses in the Indian Market. Recently it had
acquired British Jaguar Land Rover (JLR) business, which also includes
Daimler and Lanchester brand names.
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TECHNOLOGY DEVELOPMENT
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International strategy based on the competitive advantage
New product (eg. Tata Nano, the cheapest car in the World).
Acquisitions (eg. Land Rover and Jaguar brands from Ford
Motors).
Partnership with established companies (eg. Alliance with Fiat
since 2006) to enhance the product portfolio and knowledge
exchange.
Facilities for learning from other companies.
Developing programmes for intensive management development.
Consolidate position in India by exploiting opportunities:
New mobility of young Indians.
Government’s substantial road-building program
GDP growth
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Tata's global operations
Tata Motors has been aggressively acquiring foreign brands to
increase its global presence. Tata Motors has operations in the UK,
South Korea, Thailand and Spain. Among them is Jaguar Land Rover, a
business comprising the two iconic British brands that was acquired in
2008. Tata Motors has also acquired from Ford the rights of Rover. In
2004, it acquired the Daewoo Commercial Vehicles Company, South
Korea’s second largest truck maker. The rechristened Tata Daewoo
Commercial Vehicles Company has launched several new products in the
Korean market, while also exporting these products to several
international markets. Today two-thirds of heavy commercial vehicle
exports out of South Korea are from Tata Daewoo.In 2005, Tata Motors
acquired a 21% stake in Hispano Carrocera, a reputed Spanish bus and
coach manufacturer,[10] giving it controlling rights of the company.
Hispano’s presence is being expanded in other markets.
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Korea, South Africa, the SAARC countries and the Middle-East by the
end of 2009 [27] In 2006, it formed a joint venture with the Brazil-based
Marcopolo, a global leader in bodybuilding for buses and coaches to
manufacture fully-built buses and coaches for India and select
international markets.[28] Tata Motors has expanded its production and
assembly operations to several other countries including South Korea,
Thailand, South Africa and Argentina and is planning to set up plants in
Turkey, Indonesia and Eastern Europe.[25] Tata also franchisee/joint
venture assembly operations in Kenya, Bangladesh, Ukraine, Russia and
Senegal.[29] Tata has dealorships in 26 countries across 4 continents.[30]
Though Tata is present in many counties it has only managed to create a
large consumer base in the Indian Subcontinent namely India,
Bangladesh, Bhutan, Sri Lanka and Nepal and has a growing consumer
base in Italy, Spain and South Africa
BOARD OF DIRECTORS
The Board of Directors alongwith its Committees provides
leadership and guidance to the Company’s management and directs,
supervises and controls the performance of the Company. The
composition of the Board of Directors is governed by the Companies Act,
1956 (the Act), the listing agreement with the Indian Stock Exchanges
where the shares of the Company are listed and the Articles of
Association of the Company.
The Board of Directors has an optimum combination of Executive
and Non-Executive Directors and presently comprises of twelve
Directors (exclusive of one alternate director), out of which ten are Non-
Executive Directors.
The Company has a Non-Executive Chairman and the four Independent
Directors, comprise more than one third of the total strength of the
Board. The Board also includes a Managing Director and an Executive
Director.The Managing Director is responsible for the conduct of the
business as also the day-to-day affairs of the Company.
The Executive Director is in-charge of the Finance and Corporate
Affairs’ functions of the Company. The role of the Chairman and the
Managing Director (CEO) are distinct and separate.
None of the Directors on the Company’s Board is a Member of
more than ten Committees and Chairman of more than five
Committees(Committees being, Audit Committee and Investors’
Grievance Committee) across all the companies in which he is a Director.
All the Directors have made necessary disclosures regarding Committee
positions held by them in other companies. Also, none of the Directors
on the Board hold the office of Director in more than 15 companies.
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The required information as enumerated in Annexure IA to Clause
49 of the Listing Agreement is made available to the Board of Directors
for discussions and consideration at Board Meetings. The Board also
reviews the declaration made by the Managing Director and the
Executive Director regarding compliance with all applicable laws on a
quarterly basis, as also the Board Minutes of all its subsidiary companies.
During the year under review, eight Board Meetings were held on
April 4, 2005, May 17, 2005, June 6, 2005, July 29, 2005, October 6,
2005, October 25, 2005, February 9, 2006 and March 31, 2006. The
maximum time-gap between any 2 consecutive meetings did not exceed
4 months. The composition of the Board, attendance at Board Meetings
(BM) held during the Financial Year under review and at the last Annual
General Meeting (AGM), number of directorships,
memberships/chairmanships in public companies (including the
Company) and their shareholding
In addition to the above Committees, the Board has constituted the
following Committees:-
Finance Committee of Directors to look into matters
pertaining to finance and banking transactions, including the Company’s
fund raising and treasury operations, investments, all related risk
management and policy matters, granting Powers of Attorney, property
matters and other day-to-day financial related operations
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Though it has an advantage in India, thanks to low costs and
government policies it soon faces stiff competition from it multinational
competitors all eyeing for a share in the ever growing Indian auto sector.
Earlier, a policy required majority-owned subsidiaries of foreign car
firms to invest at least US$50 million in equity if they wished to set up
manufacturing projects in India and mere car assembling operations
were not welcomed.An Indian cabinet panel has since announced a new
automobile policy that sets fresh investment guidelines for foreign firms
wishing to manufacture vehicles in the country. Investments in making
auto parts by a foreign vehicle maker will also be considered a part of the
minimum foreign investment made by it in an auto-making subsidiary in
India. The move is aimed at helping India emerge as a hub for global
manufacturing and sourcing for auto parts. The policies adopted by
Government will increase competition in domestic market, motivate
many foreign commercial vehicle manufactures to set up shops in India,
whom will make India as a production hub and export to nearest market.
Thus Tata Motors will have to face tough competition in near future,
which might affect its growth negatively.
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Tata Motors Limited
Shareholders’ Satisfaction Survey:
On the recommendations of the Investors’ Grievance Committee, a
survey on Shareholders’ Satisfaction was conducted in November 2005.
3,322 shareholders (1.38% of shareholder base) responded by sending in
their duly filled in questionnaires which, when analysed reflected that on
an overall basis, 64% of the shareholders
were delighted (extremely satisfied) with the services provided by the
Company and around 89% of the shareholders expressed a view that the
services rendered by the Company were very good/excellent.
April 26, 2005 Yes* Court convened meeting for approving the Scheme
of Re-organisation and (EGM) Amalgamation of Tata Finance Limited
with the Company.
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July 8, 2004 Yes Alteration of Article on Authorised Capital in the
Articles of Association of the Company.
- Delisting of the Company’s Ordinary Shares from all or any of the Stock
Exchanges
excluding The Bombay Stock Exchange Limited (BSE) and The National
Stock
Exchange of India Limited (NSE).
DISCLOSURES
During the year under review, besides the transactions mentioned
elsewhere in the Annual Report, there were no other related party
transactions by the Company with its promoter, directors, management
and subsidiaries that had a potential conflict with the interests of the
Company at large.
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The senior management has made disclosures to the Board relating
to all material financial and commercial transactions stating that they
did not have personal interest, that could result in a conflict with the
interest of the Company, at large.
The Company has complied with various rules and regulations
prescribed by Stock Exchanges, Securities and Exchange Board of India
or any other statutory authority relating to the capital markets during
the last three years. No penalties or strictures have been imposed by
them on the Company.
The Company follows Accounting Standards issued by the
Institute of Chartered Accountants of India and in the preparation of
financial statements, the Company has not adopted a treatment different
from that prescribed in any Accounting Standard.
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PROFIT AND LOSS ACCOUNT
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BALANCE SHEET
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