Tata Motors Ltd

TO THE MEMBERS OF TATA MOTORS LIMITED

The Directors present their Sixty-Sixth Annual Report and the Audited Statement ofAccounts for the year ended March 31, 2011.

FINANCIAL PERFORMANCE SUMMARY

(in crores)

DIVIDEND

Considering the Company's financial performance, the Directors have recommended adividend of 20/- per share on the increased capital of 53,83,22,483 Ordinary Shares of10/- each (previous year: 15/- per share) and 20.50 per share on 9,63,86,471 'A' OrdinaryShares of 10/- each (previous year: 15.50 per share) fully paid-up and any furtherOrdinary Shares and/or 'A' Ordinary Shares that may be allotted by the Company prior toJuly 21, 2011 (being the book closure date for the purpose of the said dividendentitlement) for 2010-11 and will be paid on or after August 16, 2011. The said dividend,if approved by the Members, would involve a cash outflow of 1,467.03 crores (previousyear: 991.94 crores) resulting in a payout of 81% (previous year: 44%) of the standaloneprofits of the Company.

OPERATING RESULTS AND PROFITS

After a good year 2009-10 during which economies across the world showed signs ofrecovery, the economic conditions globally continued to be strong and positive in 2010-11,resulting in a strong growth for the automotive sector. The Indian economy continued to dowell, driven by a good performance from the agricultural and the industrial sector with aGDP growth of 8.6%. The automotive sector recorded a growth of over 26% in India on theback of a robust economy.

Supported by its strong distinct product offerings in both the commercial vehicle andpassenger vehicle ranges, the Company recorded a turnover of 52,136 crores, a growth of35.9% over the previous year. While the Company maintained a strong focus on cost controland market pricing, the increase in raw -material cost and fixed marketing expensesresulted in a lower EBITDA margin of 9.9% as compared to 11.7% in the previous year. TheProfit Before Tax and Profit After Tax for 2010-11 was 2,197 crores and 1,812 croresrespectively, as compared to 2,830 crores and 2,240 crores in the previous year. It may benoted that the previous year profit included a net positive impact of 958 crores, mainlyon account of profit on certain divestments which was partly set off by a loss onredemption of preference shares in a subsidiary company.

Jaguar Land Rover results for 2010-11 showed a significant improvement with increase,both in volumes and revenue, better product mix, favourable exchange rates and highermargins. The introduction of the new Jaguar XJ, growing momentum of the Range Rover andRange Rover Sport and, in particular, the strengthening of the Jaguar Land Rover businessin China, where it opened a National Sales Company (NSC) in mid 2010, were the maindrivers. In addition, Jaguar Land Rover continued to benefit from cost efficiencies andeffective cash management initiatives adopted in response to the challenging operatingconditions in 2008 and 2009.

As the global markets recovered coupled with a strong focus on product and marketinitiatives, particularly at Jaguar and Land Rover, the Tata Motors Group turnover in2010-11 grew by 33.1% to 1,23,133 crores. Tata Motors Group recorded its highest everConsolidated Profit Before Tax of 10,437 crores (3,523 crores in 2009-10) and theConsolidated Profit for the Year of 9,274 crores 2,571 crores in 2009-10).

VEHICLE SALES AND MARKET SHARES

The overall Tata Motors Group sales at 10,80,994 vehicles crossed the 1 million mark in2010-11, higher by 24.2% compared to the previous year. Global sales of all commercialvehicles were at 5,12,731 units, while global sales of all passenger vehicles were at5,68,263 units.

The Company recorded sale of 7,78,540 vehicles in 2010-11, a growth of 22.8% over theprevious year in the Indian domestic market representing a 24.3% market share in theIndian industry. It exported 58,089 vehicles from India, a growth of 70.3% over theprevious year.

The Company increased its commercial vehicle sales in the Indian market to an all timehigh of 4,58,828 vehicles in 2010-11, representing a market share of 61.8%. A strongproduct portfolio, improved reach and penetration in the market and focus on customeroriented initiatives including finance enablement, ensured a 22.7% growth in commercialvehicle sales. Some of the key highlights were:

- The Company crossed the 4 million cumulative vehicle sales mark for its commercialvehicles.

- Sale of M&HCVs grew by 26.7% to 1,96,651 vehicles representing a market share of60.1%. The Company continued to focus on customer centric initiatives, improved the salesof the Prima, and launched product variants to strengthen its product offerings. TheCompany introduced its CNG Hybrid city bus range and showcased it at the CommonwealthGames in Delhi.

- Sale of LCVs grew by 19.9% to 2,62,177 vehicles representing a market share of 63.2%.The new products launched such as the Ace EX, Super Ace and 407 Pickup helped increase thesales. With competition entering the small commercial vehicles' segment, the market sharein the segment was lower as against last year.

The Company's sales of passenger vehicles in the Indian market (inclusive of Tata, Fiatand Jaguar Land Rover brands) were at its highest ever at 3,19,712 vehicles, representinga market share of 13.0% in 2010-11. The competition in the passenger car market continuedto increase with more international Automobile manufacturers entering the market with avariety of product offerings. Some of the key highlights were:

- The Company crossed the 2 million cumulative vehicle sales mark for its passengervehicles.

- In June 2010, the Sanand plant for the production of the Nano was inaugurated. TheCompany completed delivery on the bookings of the Nano and opened sales in various Statesin a phased manner. Nano sales increased to 70,431 vehicles, a growth of 129% from 30,763vehicles in the previous year. The Company focused on increasing the reach and penetrationfor the Nano and also financing enablement for potential customer segments. The Nanobagged the gold prize in the Best New Product segment under the transportation category atthe 2010 Edison Award, symbolizing persistence and excellence personified as also theworld's oldest and coveted international award for 'Good Design' in 2010 conferred by theChicago Athenaeum: Museum of Architecture and Design together with the European Centre forArchitecture Art Design and Urban Studies in the category of transportation.

- The sales in the Small Car segment (comprising the Nano, the Indica and the Vista)increased to 1,80,091 vehicles, a growth of 13.9% representing a market share of 11.7%.

- The Indigo and the Indigo Manza sales were 87,919 vehicles. The Indigo eCS and theIndigo Manza Elan variants launched in the year were well received in the market andimproved the Company's market share in the mid-size segment to 25.8% (after takingJaguar).

- In the Multi Utility Vehicles (MUV) segment, the Company sold 42,741 (including LandRovers) vehicles, a growth of 27.0% mainly boosted by sales of the Safari. The Aria - apremium crossover and the Venture - a multi-purpose vehicle in this segment launchedduring the year facilitated improvement in market share which stood at 13.2%.

- The Fiat sales were 20,342 vehicles representing a market share of 0.8% - with salesof the 8,536 Lineas and 11,806 Grande Puntos.

- The Company sold 889 vehicles from the Jaguar Land Rover range in India and widenedits dealership network. It also began working on the local assembly for the Jaguar LandRover range in Pune which has since been operational from May 2011.

- Assisted by a recovery from the economic crisis in its key markets and a renewedfocus on exports, the Company's International Business grew by 70.3%. The Company exported50,244 commercial vehicles, a growth of 80.2% and 7,845 passenger vehicles, a growth of25.9% as compared to the previous year. The Company continues to keenly focus oninternational markets and expects to launch its new product range in many of thesemarkets. An assembly plant in South Africa is being set up and is expected to startproduction next year.

Jaguar Land Rover sold 2,43,621 vehicles in 2010-11 registering a growth of 25.6% withsales of 52,993 Jaguars - a growth of 11.8% and 1,90,628 Land Rovers - a growth of 30.06%over the previous year. Jaguar Land Rover's major international markets (U.S., U.K., Chinaand Germany) continued to do well and boosted sales of the Jaguar Land Rover range. Thenew Jaguar XJ, deliveries of which started in the year, contributed significantly to thegrowth of the Jaguar brand. Jaguar Land Rover also displayed the Jaguar C-X75 at the ParisMotor Show and launched the all new XKR-S Jaguar at the Geneva Motor Show which receivedrave reviews. The Range Rover - Evoque displayed at various auto shows and planned forlaunch early next year, received rave accolades and is expected to translate the brandidentity of Range Rover so as to include small and very relevant products withoutdiminishing its brand value. Jaguar and Land Rover received more than 80 internationalawards for its vehicles during 2010, which were shared equally between the two iconicbrands.

Jaguar Land Rover retail volumes in the U.K. totalled 58,134, a 1.9% increase over theprevious year whilst the retail volumes in the North America totalled 50,280 with Jaguarand Land Rover volumes growing by 14.8% and 22.9% respectively over the previous year.Retail volumes in key growth markets grew significantly with China at 28,893 and Russia at11,689, higher by 69.9% and 32.4% respectively, over the previous year. There was moderategrowth in Europe of 6.2% resulting in retail volumes of 53,711 and across all othermarkets of 38,198 representing a 15.7% growth over the previous year. Market Share ofJaguar Land Rover in U.K., U.S., Europe, Russia and China were also either maintained ormarginally improved.

Tata Daewoo Commercial Vehicle (TDCV) sales were stagnant at 8,748 vehicles as comparedto 8,769 vehicles in the previous year. The financial instability of its sole distributorin its domestic market in the previous year brought new challenges and opportunities. TDCVstarted its own sales company to distribute its products in the Korean market and alsolaunched the Euro V compliant range of products.

Tata Hispano Motors Carrocera, S.A. sold 505 vehicles as compared to 248 units in theprevious year, increasing its market share to 13% from 8% in the previous year. It won aprestigious order for supplying around 500 buses in the next 3 years to the Avanza Group,one of the largest private passenger transportation groups in Spain.

Tata Motors Thailand (TMTL) continued to do well with sales of 6,031 vehicles against2,536 vehicles in the previous year. The growth was driven by a good response to the XenonCNG model. TMTL also launched the Super Ace in the Thailand market.

CUSTOMER FINANCING INITIATIVES

The vehicle financing activity in India under the brand "Tata MotorFinance"(TMF) of Tata Motors Finance Limited - a wholly owned subsidiary company, has shownimprovements in disbursements as well as net interest margins, driven mainly by theoverall economic recovery coupled with a strong focus by TMF on controlling costs,improving quality of fresh acquisitions and micro-management of collections. TMF financed1,60,781 vehicles during the year as compared to 1,44,806 vehicles in the previous year.Total disbursements at 7,908 crores grew by 18% as against 6,697 crores in the previousyear. The disbursals for commercial vehicles were 6,041 crores (94,446 units) as comparedto 5,123 crores (96,593 units) and for passenger cars were 1,867 crores (66,335 units) ascompared to 1,454 crores (48,213 units) in the previous year. The market share in terms ofthe Tata vehicles financed by TMF declined from 26% in Commercial vehicles to 21% andincreased from 21% to 22% in passenger cars. TMF's strategy on managing non-performingassets (NPA), improving collection efficiencies, improvements in the "Risk ScoredPricing Model" approach and thrust on customer relations through a branch basedre-organised field structure, has in the last 2 years turned around and improved itsoperations and profitability, setting a robust platform to enable future growth.

Jaguar Land Rover have entered into arrangements with financial service providers tomake vehicle financing available to customers in 12 countries worldwide covering thelargest markets by volume, including Chase Auto Finance in the U.S. and FGA Capital (ajoint venture between Fiat Auto and Credit Agricole) in the UK and the rest of Europe.

HUMAN RESOURCES

The overall employee relations were peaceful and harmonious throughout the year. TheCompany continued to create a productive, learning and caring environment by implementingrobust and comprehensive HR processes. 2010-11 saw the Company attracting substantialtalent to fill some key Senior Leadership positions. The permanent manpower headcount alsoincreased by 7% to 26,214. This increase in headcount supported the production and salesof over 8 lakh vehicles. The productivity, in terms of the turnover per employee' has goneup by 19.3% to ?96 lakhs / employee. The Commercial Vehicles Business Unit showedconsistent improvement over the years and is better than its competitors on all of the 8HR Management parameters as rated by A C Nielsen.

The long term wage settlements were signed between the management and its unions atlocations where the settlements were due for negotiations. The bonus settlements at allour plant locations were signed/announced in the month of September/October. The TataMotors Employees Union elections at Pune CVBU and PCBU were conducted peacefully on March9, 2011, with new representatives being elected.

Jaguar Land Rover have generally enjoyed cordial relations with employees at theirfactories and offices and have not had any strikes in the last eight years. More than 96%of manufacturing shop floor workers and approximately 45% of salaried staff in the U.K.are members of a labour union. Jaguar Land Rover signed a landmark settlement deal withthe Unions which would lead to the creation of new jobs in the next decade, including1,500 jobs at its Halewood facility, Liverpool in 2011. Jaguar Land Rover is recognised asa preferred employer in the U.K. and has won recognition in The Times "Top 100Graduate Employers" for 2011; has won entry into The Times "Top 50 Employers forWomen" and "one to note" as a first time entry in The Times "BestCompanies" survey.

SAFETY & HEALTH - PERFORMANCE AND INITIATIVES

All of the Company's operating plants in India have been certified to OHSAS - 18001 andISO - 14001 standards and all the CVBU units have been conferred with the 'Golden PeacockAward' on Safety & Health. Jamshedpur plant was adjudged first and was awarded by CII(Confederation of Indian Industry) Eastern Region in Safety, Health & EnvironmentPractices. The Company took steps towards ensuring that every single individual workingwithin its plant premises is protected from any harmful impact of his/her working and theinherent risks. Towards this end, the Company recently completed a diagnostic of theexisting safety systems through DuPont and is taking steps to raise the safety standardsto world class levels. ZAP (Zero Accident Plan) meetings are held all across plants andthe defined bay owners in these plants champion these meetings. Tata Marcopolo MotorsLimited would be implementing IMS - 18001/14001/9001 in both their plants in 2011-12 andother initiatives to increase focus on safety, including conducting of periodical auditsto measure and ensure safety. A host of initiatives on health and wellness were takenacross all plants in India. Specifically, a Health Index was initiated in the Pune plantand Ergonomics study carried out to improve workplace environment.

In overseas locations:

Jaguar Land Rover has robust health and safety management systems based on the U.K.Health and Safety Executive's HSG 65 Standard for Successful Health and Safety Management.Jaguar Land Rover are working to achieve the international health and safety certificationstandard OHSAS 18001, on all sites, with the first stage of the certification processcompleted during 2010. All Jaguar Land Rover employees receive health and safety trainingas part of their induction and are kept up-to-date by weekly health and safety briefings,quarterly occupational health and safety information bulletin, specific safety brief inresponse to any significant incidents that occur, health and safety information ondedicated safety notice boards at each site and campaigns to raise awareness of specificrisks or safety processes. Jaguar Land Rover also participates in awareness campaigns ledby the U. K. Health and Safety Executive and the European Agency for Safety and Health atWork.

TDCV Korea achieved an accident rate of 0.30% (lower than the national average as wellas competitors) and is certified to OHSAS-18001 & ISO - 14001 Standards. Tata Hispano,Spain achieved ISO - 14001 certification. Tata Motors (Thailand) Ltd. (TMTL) had Zeroaccidents and also conducted specific training from equipment suppliers like wheelalignment, overhead cranes, two/four post lifters, etc. to ensure safe and properoperations by the workmen.

The above initiatives are in line with the Tata Motors Group's medium term goal toemerge as a leader in safety in the Indian automobile industry and globally in the longerhorizon.

FINANCE

The borrowings of the Company as on March 31, 2011 stood at ?15,899 crores (previousyear 16,595 crores). Cash and Bank balances and Current investments in Liquid / LiquidPlus schemes of Mutual funds stood at 2,514 crores (previous year 2,273 crores).

Tata Motors Group's borrowings as on March 31, 2011 stood at 32,791 crores (previousyear 35,108 crores). Cash and Bank balances and current investments in Liquid / LiquidPlus schemes of Mutual funds stood at 12,071 crores (previous year 9,808 crores). The keyhighlights were:- The Company issued rated, listed, secured/unsecured non-convertibledebentures of 900 crores with maturities of 10 - 15 years as a step to raise long termresources and optimize the loan maturity profile.

- In October 2010, the Company raised funds aggregating 3,351 crores (US$ 750 million)by an issue of 3,21,65,000 'A' Ordinary Shares at a price of 764/- per share and 83,20,300Ordinary Shares at a price of 1,074/- per share to Qualified Institutional Buyers('QIBs'), under a qualified institutional placement. The said issue was well received bythe investors and the Company availed of the opportunity to price it at the mid-upperband. This milestone in the financing strategy enabled it to come closer to its objectiveof balance sheet de-leveraging.

- Consequent upon the holders of Foreign Currency Convertible Notes (FCCNs) ofUS$327.07 million and JP 30 million exercising their option to convert their FCCNs toordinary shares, the company alloted 23570426 ordinary shares

- The Company redeemed the 0% JP 720 million Convertible Notes as per the terms ofthe issue which were remaining outstanding out of the 0% JP 11,760 million ConvertibleNotes issued in 2006, the balance 93.9% of the said Notes being previously converted/repurchased.

- Tranche 1 of the secured, rated, credit enhanced, listed 2% coupon non convertibledebentures aggregating ?800 crores was redeemed as per the terms of issue out of the 4tranches of debentures aggregating ?4,200 crores issued in 2009-10.

- With a turnaround in the business and continuing strong profitability in 2010-11, thenet debt at Jaguar Land Rover reduced to GB 233 million. During the year, Jaguar LandRover took steps to establish hedging lines in order to reduce risks to the business fromforeign exchange fluctuations and establishing long term funding facilities in order tostrengthen the capital structure.

- Tata Motors Finance Ltd have raised ?361 crores by an issue of unsecured,non-convertible, subordinated perpetual debentures towards Tier 1 and 2 Capital to meetits growth strategy and improve its Capital Adequacy ratio.

Tata Motors Group's gross Debt/Equity ratio as at March 31, 2011 at 1.17 wassignificantly lower as compared to 4.28 as on March 31, 2010.

The Company has undertaken and will continue to implement suitable steps for raisinglong term resources to match the Company's fund requirement and to optimize its loanmaturity profile. The Company's rating for foreign currency borrowings was revised upwardsby Standard & Poor by 2 notches to BB- and by Moodys by 3 notches to Ba3. Forborrowings in local currency, the rating was revised upwards by 1 notch by Crisil at AA-,by ICRA at LAA- and reaffirmed by CARE at AA-.

INFORMATION TECHNOLOGY INITIATIVES

Tata Motors Group continues to lead in the use of Information Technology as an integralpart of its strategy and goes beyond the organisation's boundaries to cover suppliers,dealers and customers. The Company won an Architecture Excellence Award in the IT ServiceManagement category at the ICMG World Conclave. The Company's competitive advantageincludes a world class Customer Relations' Management solutions (CRM) with integratedDealer Management System (DMS) used by more than 2,500 channel partners. For receivingcustomer requests and feedback, the Company has an enterprise SMS no. 5616161 and acustomer toll free no. 1800 209 7979. CRM capabilities are now being replicated in itsinternational operations. Major highlights of the year are:-

• Enhancement of the Call Center operation's capabilities to get benchmarkcustomer interaction performance, addition of Key Accounts Portal and deployment of UsedVehicle and Customer Loyalty solution.

• Strengthening of IT support through distributed warehouse management and spares'planning systems for its after market operations.

• Implementation of ERP for large and complex maintenance operations for the DelhiTransport Corporation.

• Supplier self service with design collaboration solution extended to additional550 vendors with more than 2,500 vendors.

• Use of manufacturing automation systems to run lean production operations withadvanced systems in plants for Nano and Ace.

• Expanded analytics and planning solutions to all key business functions withplans to embrace advanced analytical capabilities.

• Jaguar Land Rover completed IT transition from Ford and launched multiplestrategic ERP programs.

• Jaguar Land Rover has commenced IT enhancements with the implementation of SAPERP software in the UK and SAP "all in one" in the National Sales Companies.Jaguar Land Rover is also transforming its product development capabilities with newtoolsets, including Product Life Cycle Management (PLM).

• TDCV, Korea started its own sales and marketing operations, which went throughthe ERP implementation to support retail sales and initiated centralized IT procurement toleverage common contracts and terms.

The Tata Motors Group companies are collaborating on various fronts in the use ofInformation Technology including deployment of state-of-the-art video conferencing system.The Tata Technologies Group continues to be a strategic partner in strengthening the TataMotors Group IT capabilities.

NEW PRODUCT, TECHNOLOGY AND ENVIRONMENT FRIENDLY INITIATIVES Product Development

The Company strives to be at the forefront of innovation and works to launch productsaimed at the emerging needs of its customers. It continues to develop and build on itsin-house capabilities and works with the right partners to ensure that it has competitiveproduct offerings. Some of the Company's key products and initiatives for the yearinclude:

- Showcased the Tata Pixel - a concept for a future city car at the Geneva Motor Show.

- Launched the Aria - a premium crossover with high-end features such as 4x4, Torque onDemand, ESP, six airbags.

- Launched the BS IV compliant variants of the Indica and the Indigo CS, the Indica eV2and Indigo eCS with segment leading fuel efficiencies. These vehicles are powered by theCompany's 1.4L CRAIL engine.

- Launched Elan - a high end variant of the Indigo Manza sedan.

- Ace Zip and Magic Iris were test marketed in various parts of the country and areexpected to be formally launched across the country in May this year. This completes theAce family offerings now spanning from the Ace Zip and Magic Iris at the lower end and theSuper Ace and Venture on the higher end.

- Launched the Venture - a Multi Purpose Vehicle (MPV) on the Ace platform.

- The Prima range launched in the previous year was expanded with the introduction ofthe Prima Construck range of tippers in the market. Some Prima trucks were also launchedin Korea and some of the tippers are soon expected to be launched in the internationalmarkets.

- Jaguar Land Rover launched the all new Jaguar XJ, the new 4.4 V8 diesel Range Roverand the new 2.2 diesel Land Rover -Freelander.

- Jaguar's Advanced Design Team and the Jaguar Land Rover Technical Innovation Teamcreated a concept car for the Paris Motor Show to celebrate 75 years of Jaguar Design andInnovation. The resultant - a stunning Jaguar C-X75, is a radical combination ofhyper-car, eco-friendliness and 21^st century technology, which won 'Car of theShow' capturing the imagination of millions. Jaguar Land Rover recently announced theirpartnership with Williams F1 to bring a version of this concept to the market in 2013.

- Tata Hispano Motors Carrocera, S.A., Spain introduced 4 new brand models of itsbuses, viz. Area - an urban bus, 2 hybrid urban buses and Naya - a new deluxe coach. Thisalongwith the Xerus and Intea models launched last year would expand its product range inhigh-end buses/coaches.

Development of Environment Friendly Technologies

As a responsible automotive manufacturer, the Tata Motors Group continues to developvehicles and technologies to reduce its carbon footprint. Some of the significantinitiatives/achievements are:

- Showcased its CNG parallel Hybrid low-floor city buses in the Commonwealth Games inDelhi.

- Tata Indica Vista EVX developed by engineers at our European subsidiary - Tata MotorsEuropean Technical Centre, Plc, bagged 'the Most Economic Small Passenger EV' and 'theMost Economical and Environment Friendly Small Passenger EV' under the Small Passenger EVcategory at the inaugural Royal Automobile Club, Brighton to London Future Car Challenge.

- Migrated to meeting the BS IV emission norms by developing BS IV compliant range ofvehicles, in particular, Indica eV2 and Indigo eCS with 1.4L CRAIL engines with segmentleading fuel efficiencies.

- Jaguar and Land Rover continue to invest heavily in environmental innovation tosupport delivery of the 2012 European Union requirement for reduction in CO₂.The 2010-11 new model launches including the all new Jaguar XJ, the new 4.4 V8 DieselRange Rover and the new 2.2 Diesel Land Rover - Freelander realised improvements in CO₂performance in excess of 10 %. The Jaguar XF and Range Rover Evoque to be launched in thesecond quarter of 2011, would continue this trend. The Jaguar XF 2.2 Diesel 8 speedautomatic transmission variant with Stop/Start technology reduces the entry model CO₂output whilst the Evoque features a number of lightweight, vehicle efficiency andPowertrain technologies that make this the most fuel efficient Range Rover ever.

- Jaguar Land Rover is working on introducing a new Premium Lightweight Architecturefor its products. This has seen a host of environment friendly technologies including newaluminium alloys, down-sized powertrains, Eco HMI, sustainable materials, best-CO₂navigation routes, electronic power steering, aerodynamic features and many moretechnologies. These technologies enable the delivery of class leading 'Luxury' and'Performance' combined with low CO₂ and lay the foundation for efficienthybridization of the platform. Jaguar Land Rover's initial Full-Hybrid programme is alsoin advanced stages.

- In 2010-11, some of the Plug-In Hybrid projects of Jaguar Land Rover were completedand have provided the technical foundation for a production development programme forParallel Plug-in Hybrids. In addition, Jaguar Land Rover has made significant progress ona number of ongoing collaborative Research and Development programmes investigating a widerange of CO₂ reduction technologies. These include radical combustion enginedownsizing/pressure charging, alternative power sources for Series Hybrids, Flywheel KERSand waste energy recovery systems.

- Tata Hispano Motors Carrocera SA, Spain, won a prestigious order for supplying 10 CNGSeries Hybrid low-floor city buses, to be built on the Company's chassis, to EMT Madrid, aMadrid city public transportation company.

CONSOLIDATED FINANCIAL STATEMENTS

The Tata Motor's Group reported consolidated revenues (net of excise) for 2010-11 of123,133 crores, posting a growth of 33.1% over 92,519 crores in the previous year, withstrong volume growth globally in all major markets. The Consolidated Profit before Tax(PBT) for the year was 10,437 crores, compared to a PBT of 3,523 crores for the previousyear. The Consolidated Profit for the period (After Tax and post minority interest andprofit in respect of Associate companies) for the year was 9,274 crores, a significantincrease from a profit of 2,571 crores in the previous year. As required under the Listingagreement with the Stock Exchanges, Consolidated Financial Statements of the Tata MotorsGroup (the Company and all its subsidiary companies) are attached.

Pursuant to the provisions of Section 212(8) of the Companies Act, 1956 (Act), theMinistry of Corporate Affairs vide its General Circular No 2/2011 dated February 8, 2011has granted a general exemption subject to certain conditions to holding companies fromcomplying with the provisions of Section 212 of the Act which requires the attaching ofthe Balance Sheet, Profit & Loss Account and other documents of its subsidiarycompanies to its Balance Sheet. Accordingly, the said documents are not being included inthis Annual Report. The main financial summaries of the subsidiary companies are providedunder the section 'Subsidiary Companies: Financial Highlights 2010-11' in the AnnualReport. The Company will make available the said annual accounts and related detailedinformation of the subsidiary companies upon request by any member of the Company or itssubsidiary companies and the same will also be kept open for inspection by any member atthe Head Office of the Company and the subsidiary companies.

SUBSIDIARY AND ASSOCIATE COMPANIES Subsidiary Companies

The Company has 67 (direct and indirect) subsidiaries (10 in India and 57 abroad) as onMarch 31, 2011 as disclosed in the accounts. During the year, the following changes havetaken place in subsidiary companies:

Subsidiary companies formed/acquired, etc.

• The Company acquired 80% stake in Trilix Srl., Turin (Italy), a design andengineering company in September, 2010.

• Tata Precision Industries Pte. Ltd became a subsidiary after the Companyincreased its shareholding from 49.99% to 78.39% by subscribing to an additional 28.4%share of Tata Precision Industries Pte Ltd, Singapore on February 15, 2011. Tata PrecisionIndustries Pte Ltd holds 100% shares of Tata Engineering Services Pte Ltd, hence TataEngineering Services Pte Ltd also became a subsidiary.

• Tata Daewoo Commercial Vehicle Company Limited formed a wholly owned subsidiary,Tata Daewoo Commercial Vehicle Sales and Distribution Company Limited.

• HV Axles Limited and HV Transmissions Limited, two of the Company'ssubsidiaries, have announced an amalgamation to harness synergies and graduate to become atotal driveline solutions provider.

Companies ceasing to be subsidiary companies

• INCAT SAS, a subsidiary of Tata Technologies Limited was liquidated.

• Jaguar Land Rover Mexico SA de CV was sold to an importer.

Name changes

Carroseries Hispano Maghreb to Tata Hispano Motors Carroseries Maghreb.

Other than the above there has been no material change in the nature of the business ofthe subsidiary companies.

Associate companies

As on March 31, 2011, the Company had 7 associate companies as disclosed in theaccounts:

FIXED DEPOSITS

The Company discontinued the acceptance and renewal of fixed deposits from the publicand shareholders with effect from May 28, 2010. During the year, it changed the Registrarsto the Fixed Deposit scheme to M/s. TSR Darashaw Limited (TSRDL) from M/s. Link IntimeIndia Private Limited. TSRDL are also the Registrars and Transfer Agents for shares anddebentures issued by the Company since past few decades and would thus be a focal point ofcontact for all investor services. The Company has no overdue deposits other thanunclaimed deposits.

ENERGY, TECHNOLOGY & FOREIGN EXCHANGE

Details of energy conservation and research and development activities undertaken bythe Company along with the information in accordance with the provisions of Section217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particularsin the Report of Board of Directors) Rules, 1988, are given as an Annexure to theDirectors' Report.

DIRECTORS

Dr Ralf Speth was appointed as an Additional Director on November 10, 2010 inaccordance with Section 260 of the Companies Act, 1956 (the Act) and Article 132 of theCompany's Articles of Association and will cease to hold office at the forthcoming AnnualGeneral Meeting and is eligible for appointment. In accordance with the provisions of theAct and the Article of Association of the Company, M/s Ravi Kant, N N Wadia and S M Paliaare liable to retire by rotation and are eligible for re-appointment. Attention of theMembers is invited to the relevant items in the Notice of the Annual General Meeting andthe Explanatory Statement thereto.

Dr J J Irani, a Director nominated by Tata Steel Limited (Steel Director) and who is anon-rotational Director as per Article 127 of the Company's Articles of Association, hasconveyed his decision to step down from the Company's Board from June 2, 2011 on attaining75 years as per the Retirement policy of the Tata Group. Dr Irani was also a member of theCompany's Executive Committee of the Board. The Board of Directors in its meeting held onMay 26, 2011 expressed appreciation of the enormous contributions made by Dr Irani overthe years to the development and growth of the Company as also his good counsel incharting its future direction.

CORPORATE GOVERNANCE

A separate section on Corporate Governance forming part of the Directors' Report andthe certificate from the Practicing Company Secretary confirming compliance of CorporateGovernance norms as stipulated in Clause 49 of the Listing Agreement with the Indian StockExchanges is included in the Annual Report.

PARTICULARS OF EMPLOYEES

The Company has 99 employees who were in receipt of remuneration of not less than ?60lakhs during the year or ?5 lakhs per month during any part of the said year. TheInformation required under Section 217(2A) of the Companies Act, 1956 and the Rules madethereunder is provided in the Annexure forming part of the Report. In terms of Section219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the shareholdersexcluding the aforesaid Annexure. Any Shareholder interested in obtaining a copy of thesame may write to the Company Secretary.

CSR INITIATIVES

A separate section on initiatives taken by the Company to fulfill its Corporate SocialResponsibilities is included in the Annual Report.

AUDIT

M/s Deloitte Haskins & Sells (DHS), Registration No. 117366W, who are the StatutoryAuditors of the Company hold office until the conclusion of the ensuing Annual GeneralMeeting. It is proposed to re-appoint them to examine and audit the accounts of theCompany for the Financial Year 2011-12. DHS have, under Section 224(1) of the Act,furnished a certificate of their eligibility for re-appointment.

Cost Audit

As per the requirement of the Central Government and pursuant to Section 233B of theAct, the audit of the cost accounts relating to motor vehicles is carried out every year.Pursuant to the approval of Ministry of Corporate Affairs (MCA) vide Sr. No.52/413/CAB/1989 dated September 1, 2009, M/s Mani & Co. having registration No. 00004were appointed as the Cost Auditors for auditing the Company's cost accounts relating tomotor vehicles for the financial year ended March 31, 2010. Consequent upon the auditundertaken and submission of the Cost Audit Report dated August 10, 2010 and based on therecommendation of the Audit Committee, the Board approved of the said Audit Report onAugust 10, 2010 which was filed with the MCA on September 8, 2010.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Act, the Directors, based on the representationreceived from the Operating Management, confirm that:- in the preparation of the annualaccounts, the applicable accounting standards have been followed and that there are nomaterial departures;

- they have, in the selection of the accounting policies, consulted the StatutoryAuditors and have applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year and of the profit of the Company for that period;

- they have taken proper and sufficient care, to the best of their knowledge andability, for the maintenance of adequate accounting records in accordance with theprovisions of the Act, for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;

- they have prepared the annual accounts on a going concern basis.

ACKNOWLEDGEMENTS

The Directors wish to convey their appreciation to all of the Company's employees fortheir enormous personal efforts as well as their collective contribution to the Company'sperformance. The Directors would also like to thank the employee unions, shareholders,fixed deposit holders, customers, dealers, suppliers, bankers, Government and all theother business associates for the continuous support given by them to the company theirconfidence in its management

(Additional information given in terms of Notification 1029 of 31-12-1998 issued by theDepartment of Company Affairs) A. Conservation of Energy

The Company has always been conscious of the need for conservation of energy and hasbeen steadily making progress towards this end. Energy conservation measures have beenimplemented at all its plants and offices and special efforts are being put on undertakingspecific energy conservation projects such as:

• Installation of Variable Frequency Drives (VFD) for: electrical heating systemof Continuous Carburizing Hardening Furnace (CCHF) , cooling tower cold water pump motor,clean room Air Supply Unit motor, etc;

• Switchover from electrical heating to LPG based heating system in washingmachines and aluminium melting furnace;

• Installation of CFL, LED bus bar indicators, 24Wx4 T5 lamps for street lights,Electronic ballast and LED street lights;

• Switching off unwanted lights;

• Installation of Light pipes and Transparent Polycarbonate sheets;

• Installation of efficient Weishaupt Burners in plant and waste heat recoveryfrom furnace flue gases to heat water for process;

• Modification in PLC logic Top coat-2 oven cooling zone, optimization ofphosphate bath temperature, optimization of AC plant operations, installation of activegrill for data center AC system, to reduce electricity consumption;

• Installation of Energy Efficient Motors (Eff-1), Wind Ventilators, Supermagnetic dust separator; Downsizing of motors, Trimming of impeller of oversized waterrecirculation pump, etc.

These changes have resulted in electrical energy saving of 1.93 crore units, reductionin consumption of LDO fuel by 79KL and Propane by 194MT, leading to savings in cost ofaround 10.43 crores and annual CO₂ reduction of 17,401 tCO₂ for theCompany.

In addition, the Company's endeavour of tapping wind energy has also made significantcontributions in:

• Generation of 527.1 lakh units from Wind Power resulting in savings ofelectricity charges of 17.85 crores and reduction of CO₂ by 48,620 tCO₂.

• For the Company's 20.85MW Wind power project, United Nations FrameworkConvention for Climate Change (UNFCCC) have issued 27,554 CERs on January 20, 2011 for theperiod 2008-09.

Awards / Recognitions received during the year are as follows:

• The Company's CVBU Pune won the "GOLD" rating of Green FactoryBuilding Award from Indian Green Building Council (IGBC), which is first of its kind inIndia and for the Tata Group. All the existing buildings are rated as GOLD rating factorybuildings in Pimpri. The Company is the first to receive this award for the existingfactory buildings.

• CVBU Pune was declared winner of 'Vasundhara Awards 2010' organised by theMaharashtra Pollution Control Board (MPCB), winner of first prize in Technical PaperContest at INSSAN Regional Convention 2010 of INSSAN (Indian National Suggestion Schemes'Association) - Eastern India Chapter. It also received the Excellent Energy Efficient Unitaward in the CII 11th National Awards for Excellence in Energy Management - 2010.

• The Company won the Srishti G-Cube Awards for Good Green Governance inManufacturing - Engineering category, CVBU Pune was the winner, Jamshedpur Plant wasdeclared ''runner up'', and Pantnagar Plant received a ''certificate of commendation''.

• CVBU Lucknow was adjudged the Excellent Energy Efficient Unit for the secondtime in a row at the 11th National Awards for Excellence in Energy Management 2010,conducted by CII - Godrej Green Business Centre at Chennai. It also received the SilverAward in the automobile sector at the 11th Global Green Tech Excellence Awards 2010 andawarded the first prize in the National Energy Conservation Award (NECA) 2010, in theAutomobile Sector, at New Delhi.

• Pantnagar Plant received the first prize in the Uttarakhand State EnergyConservation Award 2010, under the Large and Medium scale industry category. It was alsoawarded the second prize at the National Energy Conservation Awards (NECA) 2010, under theAutomobile Manufacturing Sector. This is the consecutive second year that the Plant hasreceived this National Award.

B. Technology Absorption

The Company has continued its endeavor to absorb the best of technologies for itsproduct range to meet the requirements of a globally competitive market. All of itsvehicles and engines are compliant with the prevalent regulatory norms in India and alsoin the countries to which they are exported. It has also undertaken programs fordevelopment of vehicles which would run on alternate fuels like LPG, CNG, Bio-diesel,Electric traction etc.

Major Technology absorption projects undertaken during last year include:

During the year, the Company filed 141 Patent Applications and 41 Design applications.In respect of applications filed in earlier years, 11 Patents were granted and 36 Designswere registered.

To reinforce the need for technology up-gradation to attain international levels ofcompetitiveness and to be able to offer contemporary products, the Company invested infacilities for vehicle level performance development, various optimisation and emissionmeasurements, for validating safety requirements, and meeting various evolving regulatoryrequirements in domestic and international markets, such as:

• Heavy duty chassis dynamometers for vehicle level performance development andvarious calibrations for Utility Vehicles and Passenger Cars.

• Heavy duty chassis dynamometers for performance development and variouscalibrations for Medium and Heavy commercial vehicles and 440 kW Dynamic transientdynamometer and allied auxiliary equipment.

• Robotic driver mileage accumulation for light, medium and heavy commercialvehicles.

• Enhancement of Chassis Dynamometer Emission Lab for passenger cars and smallcommercial vehicles for Euro V emission norms onward. This lab is upgraded with new48" chassis dynamometer as per regulatory requirements and advanced emissionsmeasurement systems.

• Facilities and equipment to meet safety regulations such as mobile crash testbarrier for side impact testing (as per US regulations), Rear impact testing (as perKorean regulation). Introduction of xenon -ve arc, flicker free lighting system for highspeed digital photography during crash events.

• Hardware in Loop (H.I.L.) set up for body cluster module development.

• Rapid prototyping equipment with selective laser sintering (SLS) technology for'ready to test' plastic prototype parts.

• Eight poster road load simulator for vehicle structural durability of Medium andHeavy commercial vehicles.

Investments are also made to upgrade the existing facilities through addition ofvarious data acquisition systems and analysis software for Road Load Data collection, NVHtesting, engines related testing and calibration and enhancement of automation of testbeds.

Major Technology imports include:

During the year the Company spent ?1,187.21 crores on Research and Developmentactivities including expenditure on capital assets purchased for Research and Developmentwhich was 2.47% of the net turnover.

(ln crores)