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audit committee

The Audit Committee functions according to its Charter that defines its composition, authority, responsibility and reporting functions in accordance with the Act, listing requirements and US regulations applicable to the Company and is reviewed from time to time. Whilst, the full Charter is available on the Company's website, given below is a gist of the responsibilities of the Audit Committee:

  1. Reviewing the quarterly financial statements before submission to the Board, focusing primarily on:
    • Compliance with accounting standards and changes in accounting policies and practices;
    • Major accounting entries involving estimates based on exercise of judgment by Management;
    • Audit qualifications and significant adjustments arising out of audit;
    • Analysis of the effects of alternative GAAP methods on the financial statements;
    • Compliance with listing and other legal requirements concerning financial statements;
    • Review Reports on the Management Discussion and Analysis of financial condition, results of Operations and the Directors' Responsibility Statement;
    • Overseeing the Company's financial reporting process and the disclosure of its financial information, including earnings, press release, to ensure that the financial statements are correct, sufficient and credible; and
    • Disclosures made under the CEO and CFO certification and related party transactions to the Board and Shareholders.
  2. Reviewing with the management, external auditor and internal auditor, adequacy of internal control systems and recommending improvements to the management.
  3. Reviewing, with the management, the statement of uses/application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilisation of proceeds of a public or rights issue and making appropriate recommendations to the Board to take up steps in this matter.
  4. Recommending the appointment/removal of the statutory auditor, cost auditor, fixing audit fees and approving non-audit/consulting services provided by the statutory auditors' firms to the Company and its subsidiaries; evaluating auditors' performance, qualifications and independence. It shall also ensure that the cost auditors are independent, have arm's length relationship and are also not otherwise disqualified at the time of their appointment or during their tenure.
  5. Reviewing the adequacy of internal audit function, coverage and frequency of internal audit, appointment, removal, performance and terms of remuneration of the chief internal auditor.
  6. Discussing with the internal auditor and senior management significant internal audit findings and follow-up thereon.
  7. Reviewing the findings of any internal investigation by the internal auditor into matters involving suspected fraud or irregularity or a failure of internal control systems of a material nature and report the matter to the Board.
  8. Discussing with the external auditor before the audit commences, the nature and scope of audit, as well as conduct post-audit discussions to ascertain any area of concern.
  9. Reviewing the Company's financial and risk management policies.
  10. Reviewing the functioning of the Whistle-Blower and the legal compliance mechanism.
  11. Reviewing the financial statements and investments made by subsidiary companies and subsidiary oversight relating to areas such as adequacy of the internal audit structure and function of the subsidiaries, their status of audit plan and its execution, key internal audit observations, risk management and the control environment.
  12. Look into the reasons for any substantial defaults in payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividend) and creditors, if any.
  13. Reviewing the effectiveness of the system for monitoring compliance with laws and regulations.
  14. Approving the appointment of CFO after assessing the qualification, experience and background etc of the candidate.

During the year, the Committee reviewed key audit findings covering operational, financial and compliance areas. Management personnel presented their risk mitigation plan to the Committee. It also reviewed the internal control system in subsidiary companies, status on compliance of its obligations under the Charter and confirmed that it fulfilled its duties and responsibilities. The Committee through self-assessment annually evaluates its performance. The Chairman of the Audit Committee briefs the Board members about the significant discussions at Audit Committee meetings.

The Committee comprises four Independent Directors, all of whom are financially literate and have relevant finance and/or audit exposure. Mr S M Palia is the financial expert. The quorum of the Committee is two members or one-third of its members, whichever is higher. The Chairman of the Audit Committee also attended the last Annual General Meeting of the Company. During the period under review, eight Audit Committee meetings were held on May 24, 2011, July 12, 2011, August 10, 2011, September 8, 2011, November 11, 2011 (adjourned to November 14, 2011), December 12, 2011, February 13, 2012 and March 15, 2012. The composition of the Audit Committee and attendance at its meetings is as follows:

Composition   Meetings attended
N Munjee (Chairman)   8
S M Palia   8
R A Mashelkar   7
V K Jairath   8

The Committee meetings are held at the Company's Corporate Headquarters or at its plant locations and are usually attended by the Vice Chairman, Managing Director-India Operations, Chief Financial Officer, Chief Internal Auditor, Statutory Auditor and Cost Auditor. The Business and Operation Heads are invited to the meetings, as and when required. The Company Secretary acts as the Secretary of the Audit Committee. The Internal Audit function headed by the Chief Internal Auditor reports to the Audit Committee to ensure its independence.

The Committee relies on the expertise and knowledge of management, the internal auditors and the independent Statutory Auditor in carrying out its oversight responsibilities. It also uses external expertise, if required. The management is responsible for the preparation, presentation and integrity of the Company's financial statements including consolidated statements, accounting and financial reporting principles. The management is also responsible for internal control over financial reporting and all procedures are designed to ensure compliance with accounting standards, applicable laws and regulations as well as for objectively reviewing and evaluating the adequacy, effectiveness and quality of the Company's system of internal control.

Deloitte Haskins & Sells, Mumbai (Registration Number 117366W), the Company's Statutory Auditor, is responsible for performing an independent audit of the Financial Statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in India.


The Remuneration Committee of the Company is empowered to review the remuneration of the Managing Directors and the Executive Directors of the Company and the CEOs of certain significant subsidiary companies, retirement benefits to be paid to them under the Retirement Benefit Guidelines approved by the Board, recommending on the amount and distribution of commission to the non-executive directors based on criteria fixed by the Board and to deal with matters pertaining to Employees' Stock Option Scheme, if any.

The Remuneration Committee comprises two Independent Directors (including the Chairman of the Committee) and two Non-Executive Directors. During the year under review, two Remuneration Committee meetings were held on May 26, 2011 and July 15, 2011. The decisions are taken by the Committee at meetings or by passing circular resolutions. The composition of the Remuneration Committee and attendance at its meeting is as follows:

Composition   Meetings attended
N N Wadia (Chairman)   2
Ratan N Tata   2
S Bhargava   2
Ravi Kant   2

Remuneration Policy

  1. The remuneration of the Managing Directors and Executive Directors of the Company and CEOs of certain significant subsidiaries is recommended by the Remuneration Committee based on criteria such as industry benchmarks, the Company's performance vis-āvis the industry, responsibilities shouldered, performance/track record, macro economic review on remuneration packages of heads of other organisations and is decided by the Board of Directors. The Company pays remuneration by way of salary, perquisites and allowances (fixed component), incentive remuneration and/or commission (variable components) to its Managing Directors. Annual increments are decided by the Remuneration Committee within the salary scale approved by the Members and are effective from April 1, every year.
  2. A sitting fee of 20,000/- for attendance at each meeting of the Board, Audit Committee, Executive Committee, Remuneration Committee and Nominations Committee and 5,000/- for Investors' Grievance Committee and Ethics & Compliance Committee is paid to its Members (excluding Managing Directors and Executive Directors) and also to Directors attending as Special Invitees. The sitting fees paid/payable to the Non whole-time Directors is excluded whilst calculating the above limits of remuneration in accordance with Section 198 of the Act. The Company also reimburses out-of-pocket expenses to Directors attending meetings held at a city other than the one in which the Directors reside.
  3. The remuneration by way of commission to the non-executive directors is decided by the Board of Directors and distributed to them based on their participation and contribution at the Board and certain Committee meetings as well as time spent on matters other than at meetings. The Members had, at the Annual General Meeting held on July 24, 2008, approved the payment of remuneration by way of commission to the Non wholetime directors of the Company, of a sum not exceeding 1% per annum of the net profits of the Company, calculated in accordance with the provisions of the Act, for a period of 5 years commencing April 1, 2008.
  4. Remuneration of employees largely consists of basic remuneration, perquisites, allowances and performance incentives. The components of the total remuneration vary for different employee grades and are governed by industry patterns, qualifications and experience of the employee, responsibilities handled by him, his individual performances, etc. The annual variable pay of senior managers is linked to the Company's performance in general and their individual performance for the relevant year is measured against specific major performance areas which are closely aligned to the Company's objectives.

The Directors' remuneration and sitting fees paid/payable by the Company in respect of the Financial Year 2011-12, are given below:

Non-Executive Directors ( in Lakhs)
Name   Commission   Sitting Fees
Ratan N Tata(1)   200     2.80  
Ravi Kant(2)   100     3.70  
J J Irani(3)   3     0.20  
N N Wadia   40     2.60  
S M Palia   60     3.90  
R A Mashelkar   30     2.40  
N Munjee   72     3.80  
S Bhargava   40     2.40  
V K Jairath   32     3.30  
R Sen   23     1.80  
R Speth(4)   -     -  
Carl-Peter Forster(5)   -     0.40  
(1) Apart from the above, Mr Ratan N. Tata, who was formerly the Executive Chairman of the Company is paid/provided 27.33 lakhs as retirement benefits as per Company's policy.
(2) Mr Ravi Kant, who was formerly the Managing Director of the Company is paid/provided 58.50 lakhs as retirement benefits as per Company's policy. As advisor to the Company for overseeing Jaguar Land Rover operations of the Company, Mr Ravi Kant is entitled to a fee equivalent to GB£ 75,000 p.a. and use of a Company car. Both of these are not included in the above.
(3) Ceased to be a Director w.e.f. June 2, 2011.
(4) Dr Ralf Speth is a Non-Executive Director and is not paid any commission or sitting fees for attending Board meetings of the Company in view of his appointment as Chief Executive Officer and Director of Jaguar Land Rover PLC.
(5) Appointed as an Additional Director in a Non- Executive capacity w.e.f. September 9, 2011 for a period upto March 31, 2012.

Managing & Executive Directors

Terms of appointment and remuneration

  1. Mr P M Telang was appointed as Managing Director – India Operations from June 2, 2009 till June 21, 2012 and stepped down as Managing Director - India Operations and Director w.e.f. June 21, 2012. Mr Ravindra Pisharody and Mr Satish Borwankar were appointed as Executive Directors w.e.f. June 21, 2012 for a period of 5 years.
  2. As per the terms of appointment, the remuneration of Managing Directors and Executive Directors comprises of (a) salary: upto a maximum salary of 6,75,000 per month for Mr Telang and 7,00,000 per month for the Executive Directors with authority to the Board or a Committee thereof to fix the salary within the said maximum amount. The annual increments would be effective April 1, every year, as may be decided by the Board, based on merit and taking into account the Company's performance; (b) incentive remuneration, if any, and/or commission based on certain performance criteria to be laid down by Board; (c) benefits, perquisites and allowances as may be determined by the Board from time to time.
  3. The Contracts with the Executive Directors may be terminated by either party giving the other party six months' notice or the Company paying six months' salary in lieu thereof. There is no separate provision for payment of Severance fees.
  4. The appointment and terms of remuneration of the Managing Director and Executive Directors are subject to approval of the members and attention is drawn to the respective items in the notice of the forthcoming Annual General Meeting.

The Remuneration paid to the Managing Directors in FY 2011-12 is as under:

( in Lakhs)
Name P M Telang Carl-Peter Forster
Salary 72.00   174.50  
Perquisites & Allowances 59.92(1) 2,201.24(2)
Commission 250(3) -  
Retirement Benefits(4) 19.44   20.94  
(1) Includes leave encashment
(2) Includes termination payment of 1,409.35 lakhs, Mr Forster stepped down as Managing Director & CEO w.e.f. September 9, 2011
(3) Payable in FY 2012-13
(4) Excludes provision for encashable leave and gratuity as separate actuarial valuation is not available

Retirement Policy for Directors

The Company has adopted the Guidelines for retirement age wherein Managing and Executive Directors retire at the age of 65 years whilst the Non-Executive Directors retire at the age of 75 years. The Company has also adopted a Retirement Policy for Managing and Executive Directors which has also been approved by the Members of the Company, offering special retirement benefits including pension, ex-gratia, medical and other benefits. In addition to the above, the retiring Managing Directors is entitled to residential accommodation or compensation in lieu of accommodation on retirement. The quantum and payment of the said benefits are subject to an eligibility criteria of the retiring director and is payable at the discretion of the Board in each individual case on the recommendation of the Remuneration Committee.


The Investors' Grievance Committee comprises two Independent Directors (including the Chairman of the Committee) and one Non-Executive Director. The Investors' Grievance Committee of the Board is empowered to oversee the redressal of investors' complaints pertaining to share/debenture transfers, non-receipt of annual reports, interest/dividend payments, issue of duplicate certificates, transmission (with and without legal representation) of shares and debentures matters pertaining to Company's fixed deposit programme and other miscellaneous complaints. During the year under review, a meeting of the Committee was held on August 11, 2011. The composition of the Investors' Grievance Committee and attendance at its meeting is as follows:

Composition   Meetings attended
S M Palia (Chairman)   1
Ravi Kant   1
V K Jairath   1

Compliance Officer

Mr H K Sethna, Company Secretary, who is the Compliance Officer, can be contacted at: Tata Motors Limited, Bombay House, 24, Homi Mody Street, Mumbai - 400 001, India.
Tel: 91 22 6665 8282, 91 22 6665 7824 / Fax: 91 22 6665 7260

Complaints or queries relating to the shares can be forwarded to the Company's Registrar and Transfer Agents - M/s TSR Darashaw Ltd. at, whereas complaints or queries relating to the public fixed deposits can be forwarded to the Registrars to the Fixed Deposits Scheme - M/s TSR Darashaw Ltd. at

The status on the total number of investors' complaints during FY 2011-12 is as follows:

Type Nos.
Complaints regarding non-receipt of dividend/interest, shares lodged for transfer 161
Complaints received from the shareholders through SEBI and other statutory bodies and resolved 53
Complaints redressed out of the above 212
Pending complaints as on 31.3.2012 2*
Other Queries received from shareholders and depositors and replied 19163
* SEBI complaints were replied within 1-15 days but the same have been reflected as unresolved as on March 31, 2012, as per the condition for complete resolution defined by SEBI.

All letters received from the investors are replied to and the response time for attending to investors' correspondence during FY2011-12 is shown in the following table:

  Number %
Total number of correspondence received during 2011-2012   19377   100
Replied within 1 to 4 days of receipt   12327   63.62
Replied within 5 to 7 days of receipt   2951   15.23
Replied within 8 to 15 days of receipt   3917   20.21
Replied after 15 days of receipt(1)   85   0.44
Received in last week of March 2012 and replied in April 2012   97   0.50
(1) These correspondence pertained to court cases which involved retrieval of case files, cases involving retrieval of very old records,co-ordination with the Company Advocates etc, partial documents awaited from the Investors, cases involving registration of legal documents, executed documents received for issue of duplicate certificates and transmission of shares without legal representation which involved checking of the documents, sending notices to Stock Exchange and issue of duplicate certificates/transmission of shares after approval from the Company. However, all these cases have been attended to within the statutory limit of 30 days
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