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US$490,000,000 Zero Coupon Convertible Alternative Reference Securities due 2012 Convertible into Qualifying Securities, Ordinary Shares or American Depositary Shares Representing Ordinary Shares Issue Price: 100% This is an offering of zero coupon convertible alternative reference securities due 2012 (the “CARS ”) being issued by Tata Motors Limited and offered outside the United States in reliance on Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”). The CARS are not being offered in the Republic of India. The CARS will be the direct, unsecured and unsubordinated obligations of Tata Motors Limited and will rank at least pari passu in right of payment with all other unsecured and unsubordinated debt of Tata Motors Limited. Unless the CARS have been previously redeemed, purchased and cancelled or converted, any and all of the CARS may be converted (i) in the event there has been a Qualifying Issue by the time of conversion, into Qualified Securities (“QSs”), or (ii) in the event that there has not been a Qualifying Issue by the time of conversion or there has been a Qualifying Issue but we notify the holders of the CARS (the “Holders”) that the CARS are no longer convertible into QSs, into newly issued ordinary shares, par value Rs. 10 per share, of Tata Motors Limited (the “Shares”) or American Depositary Shares (“ADSs”), each currently representing one Share, at the option of the Holders. The conversion may be made by the Holders at any time during the period from and including October 11, 2011 to and including June 12, 2012 at an initial conversion price (the “Conversion Price”) of Rs. 960.96 per Share (equivalent to US$23.67 at a fixed rate of exchange on conversion of Rs.40.59 = US$1.00 (the “Fixed Conversion Rate”)). The Conversion Price is subject to adjustment in certain circumstances. The CARS may be redeemed, in whole but not in part, at our option at any time after October 11, 2011 but prior to the Maturity Date (as defined herein) at the Early Redemption Amount (as defined herein), provided, that prior to the date on which the notice of redemption is given by us, less than 10% in aggregate principal amount of the CARS originally issued is outstanding. The CARS may also be redeemed in whole at any time at our option at the Early Redemption Amount in the event of certain changes relating to taxation in India. Unless previously converted, redeemed or purchased and cancelled, the CARS will be redeemed on July 12, 2012 at 131.82% of their principal amount. To the extent permitted by applicable law, we will make an offer to repurchase any outstanding CARS upon the occurrence of a Change of Control (as defined herein) or a Delisting (as defined herein) of the Shares from the Bombay Stock Exchange Limited (the “BSE”) and the National Stock Exchange of India Limited (the “NSE”) at the Early Redemption Amount. See “Description of the CARS ”. This offering consists of US$450,000,000 initial aggregate principal amount of CARS offered by us together with US$40,000,000 additional aggregate principal amount of CARS being issued by us in connection with the exercise by Citigroup Global Markets Limited and J.P. Morgan Securities Ltd. (the “initial purchasers”) of an option granted by us to purchase such additional CARS at the offering price, solely to cover over-allotments. We have notified the Singapore Exchange Securities Trading Limited (the “SGX-ST”) that this over- allotment option has been exercised. Approval in-principle has been received for the listing of the CARS on the SGX-ST. The SGX-ST assumes no responsibility for the correctness of any of the statements made, opinions expressed or reports contained herein. Admission of the CARS to the Official List of the SGX-ST is not to be taken as an indication of the merits of Tata Motors Limited or the CARS . The offering and settlement of the CARS are not conditioned on obtaining listing on the SGX-ST. ADSs representing the Shares are currently listed on the New York Stock Exchange (“NYSE”) and application will be made to have any ADSs deliverable upon conversion of the CARS listed on the NYSE. Our outstanding Shares are listed on the BSE, the NSE and one other Indian stock exchange. We have undertaken to apply to have any Shares (including those that may be represented by ADSs) issuable upon conversion of the CARS approved for listing on the BSE, the NSE and any other stock exchanges in India on which the Shares are listed from time to time. On July 6, 2007, the closing price of the Shares on the NSE was Rs.710.60 per Share and the closing price of our existing ADSs on the NYSE was US$17.59 per ADS. The QSs are not presently in issue. In order to satisfy the conditions for conversion of the CARS into QSs, we will be required to list the QSs on a Relevant Stock Exchange (as defined herein). Investing in the CARS and the QSs, Shares or ADSs deliverable upon conversion of the CARS involves risks. See “Risk Factors” beginning on page 11. Delivery of the CARS in book-entry form only will be made on or about July 11, 2007 (the “Closing Date”). The CARS will be represented by one Global Security (as defined herein). Except as otherwise described herein, beneficial interests in the Global Security will be shown in, and transfers thereof will be effected only through, book-entry records. See “Description of the CARS — CARS ; Denomination, Delivery and Form” and “— The Global Security”. The CARS and the QSs, Shares or ADSs deliverable upon conversion of the CARS have not been and will not be registered under the Securities Act. The CARS may not be offered or sold within the United States or to U.S. persons, except to certain persons in offshore transactions in reliance on Regulation S. The CARS may not be offered or sold directly or indirectly in India or to, or for the account of, any resident of India. The CARS are not transferable except in accordance with the restrictions described under “Transfer Restrictions on the CARS ”. A copy of this offering memorandum (“Offering Memorandum”) will be delivered to the Registrar of Companies in Mumbai, India, the Reserve Bank of India, the Securities and Exchange Board of India, the BSE and the NSE for record purposes only. Sole Global Coordinator Citi Joint Bookrunners Citi JPMorgan July 9, 2007

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Page 1: Tata Motors

US$490,000,000Zero Coupon Convertible Alternative Reference Securities due 2012 Convertible into

Qualifying Securities, Ordinary Shares or American Depositary SharesRepresenting Ordinary Shares

Issue Price: 100%

This is an offering of zero coupon convertible alternative reference securities due 2012 (the “CARS™”) being issued by Tata MotorsLimited and offered outside the United States in reliance on Regulation S under the U.S. Securities Act of 1933, as amended (the “SecuritiesAct”). The CARS™ are not being offered in the Republic of India.

The CARS™ will be the direct, unsecured and unsubordinated obligations of Tata Motors Limited and will rank at least pari passu inright of payment with all other unsecured and unsubordinated debt of Tata Motors Limited. Unless the CARS™ have been previouslyredeemed, purchased and cancelled or converted, any and all of the CARS™ may be converted (i) in the event there has been a QualifyingIssue by the time of conversion, into Qualified Securities (“QSs”), or (ii) in the event that there has not been a Qualifying Issue by the time ofconversion or there has been a Qualifying Issue but we notify the holders of the CARS™ (the “Holders”) that the CARS™ are no longerconvertible into QSs, into newly issued ordinary shares, par value Rs. 10 per share, of Tata Motors Limited (the “Shares”) or AmericanDepositary Shares (“ADSs”), each currently representing one Share, at the option of the Holders. The conversion may be made by the Holdersat any time during the period from and including October 11, 2011 to and including June 12, 2012 at an initial conversion price (the“Conversion Price”) of Rs. 960.96 per Share (equivalent to US$23.67 at a fixed rate of exchange on conversion of Rs.40.59 = US$1.00 (the“Fixed Conversion Rate”)). The Conversion Price is subject to adjustment in certain circumstances.

The CARS™ may be redeemed, in whole but not in part, at our option at any time after October 11, 2011 but prior to the Maturity Date(as defined herein) at the Early Redemption Amount (as defined herein), provided, that prior to the date on which the notice of redemption isgiven by us, less than 10% in aggregate principal amount of the CARS™ originally issued is outstanding. The CARS™ may also be redeemedin whole at any time at our option at the Early Redemption Amount in the event of certain changes relating to taxation in India. Unlesspreviously converted, redeemed or purchased and cancelled, the CARS™ will be redeemed on July 12, 2012 at 131.82% of their principalamount. To the extent permitted by applicable law, we will make an offer to repurchase any outstanding CARS™ upon the occurrence of aChange of Control (as defined herein) or a Delisting (as defined herein) of the Shares from the Bombay Stock Exchange Limited (the “BSE”)and the National Stock Exchange of India Limited (the “NSE”) at the Early Redemption Amount. See “Description of the CARS™”.

This offering consists of US$450,000,000 initial aggregate principal amount of CARS™ offered by us together with US$40,000,000additional aggregate principal amount of CARS™ being issued by us in connection with the exercise by Citigroup Global Markets Limitedand J.P. Morgan Securities Ltd. (the “initial purchasers”) of an option granted by us to purchase such additional CARS™ at the offering price,solely to cover over-allotments. We have notified the Singapore Exchange Securities Trading Limited (the “SGX-ST”) that this over-allotment option has been exercised.

Approval in-principle has been received for the listing of the CARS™ on the SGX-ST. The SGX-ST assumes no responsibility for thecorrectness of any of the statements made, opinions expressed or reports contained herein. Admission of the CARS™ to the Official List of theSGX-ST is not to be taken as an indication of the merits of Tata Motors Limited or the CARS™. The offering and settlement of the CARS™ arenot conditioned on obtaining listing on the SGX-ST. ADSs representing the Shares are currently listed on the New York Stock Exchange(“NYSE”) and application will be made to have any ADSs deliverable upon conversion of the CARS™ listed on the NYSE. Our outstandingShares are listed on the BSE, the NSE and one other Indian stock exchange. We have undertaken to apply to have any Shares (including thosethat may be represented by ADSs) issuable upon conversion of the CARS™ approved for listing on the BSE, the NSE and any other stockexchanges in India on which the Shares are listed from time to time. On July 6, 2007, the closing price of the Shares on the NSE was Rs.710.60per Share and the closing price of our existing ADSs on the NYSE was US$17.59 per ADS. The QSs are not presently in issue. In order tosatisfy the conditions for conversion of the CARS™ into QSs, we will be required to list the QSs on a Relevant Stock Exchange (as definedherein).

Investing in the CARS™ and the QSs, Shares or ADSs deliverable upon conversion of the CARS™ involves risks. See “RiskFactors” beginning on page 11.

Delivery of the CARS™ in book-entry form only will be made on or about July 11, 2007 (the “Closing Date”).The CARS™ will be represented by one Global Security (as defined herein). Except as otherwise described herein, beneficial interests in the

Global Security will be shown in, and transfers thereof will be effected only through, book-entry records. See “Description of the CARS™ — CARS™;Denomination, Delivery and Form” and “— The Global Security”.

The CARS™ and the QSs, Shares or ADSs deliverable upon conversion of the CARS™ have not been and will not be registered under theSecurities Act. The CARS™ may not be offered or sold within the United States or to U.S. persons, except to certain persons in offshore transactionsin reliance on Regulation S. The CARS™ may not be offered or sold directly or indirectly in India or to, or for the account of, any resident of India.The CARS™ are not transferable except in accordance with the restrictions described under “Transfer Restrictions on the CARS™”.

A copy of this offering memorandum (“Offering Memorandum”) will be delivered to the Registrar of Companies in Mumbai, India, theReserve Bank of India, the Securities and Exchange Board of India, the BSE and the NSE for record purposes only.

Sole Global Coordinator

CitiJoint Bookrunners

Citi JPMorganJuly 9, 2007

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TABLE OF CONTENTSPage

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1The Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Market Price Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20Exchange Rates and Exchange Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Non-Consolidated Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23Selected Reformatted Consolidated Historical Financial and Other Information . . . . . . . . . . . . . . . . . . . . . . 24Selected Reformatted Non-Consolidated Historical Financial and Other Information . . . . . . . . . . . . . . . . . . 27Industry and Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35Directors and Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49The Tata Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56Indian Securities Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58Description of the CARS™ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65Transfer Restrictions on the CARS™ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90Description of the American Depositary Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92Information Relating to the Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101Description of the Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102Foreign Investment and Exchange Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110Government of India Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120Validity of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124Enforceability of Civil Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126Index to the Non-Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1Index to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1

This Offering Memorandum is being furnished by us in connection with an offering exempt from theregistration requirements under the Securities Act solely for the purpose of enabling a prospective investor toconsider the purchase of the CARS™ offered by this Offering Memorandum. This Offering Memorandum ispersonal to each offeree and does not constitute an offer to any other person or to the public generally tosubscribe for or otherwise acquire the CARS™. Distribution of this Offering Memorandum to any other personother than the prospective investor and any person retained to advise such prospective investor with respect to itspurchase is unauthorized, and any disclosure or any of its contents, without our prior written consent, isprohibited. By accepting delivery of this Offering Memorandum, you agree to the foregoing and further agree notto make photocopies of this Offering Memorandum or any documents referred to in this Offering Memorandum.The information contained herein has been provided by us and other sources identified in this OfferingMemorandum, including the Society of Indian Automobile Manufacturers, or SIAM. No representation orwarranty, express or implied, is made by either of the initial purchasers as to the accuracy or completeness ofsuch information, and nothing contained herein is, or shall be relied upon as, a promise or representation byeither of the initial purchasers as to the past or the future.

Notwithstanding anything herein to the contrary, you (and your employees, representatives or other agents)may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of thetransactions described herein and all materials of any kind (including opinions or other tax analyses) that areprovided to you relating to such tax treatment and tax structure.

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All intellectual property rights in and to any Convertible Alternative Reference Securities products, theconcepts and ideas relating to the CARSTM embodied herein and the trademark “CARS” shall remain vested inCitigroup Inc. or its affiliates and all rights are reserved.

We accept full responsibility for the information contained in this Offering Memorandum and, having madeall reasonable enquiries, confirm that this Offering Memorandum contains all information with respect to us(including our subsidiaries), the CARS™, the QSs, the Shares and the ADSs which is material in the context ofthe issue and offering of the CARS™. The statements contained in this Offering Memorandum relating to us(including our subsidiaries), the CARS™, the QSs, the Shares and the ADSs are, in every material respect, trueand accurate and not misleading. The opinions and intentions expressed in this Offering Memorandum withregard to us (including our subsidiaries), the CARS™, the QSs, the Shares and the ADSs are honestly held, havebeen reached after considering all relevant circumstances, are based on information presently available to us andare based on reasonable assumptions. There are no other facts in relation to us (including our subsidiaries), theCARS™, the QSs, the Shares or the ADSs, the omission of which would, in the context of the issue and theoffering of the CARS™, make any statement in this Offering Memorandum misleading in any material respect.Further, we have made all reasonable enquiries to ascertain such facts and to verify the accuracy of all suchinformation and statements. Where information contained in this Offering Memorandum includes extracts fromsummaries and information and data from various published and private sources, we accept responsibility foraccurately reproducing such summaries and data.

Your attention is drawn to certain amendments issued by the Ministry of Finance that provide that certainoverseas corporate bodies (“OCBs”), as defined under applicable regulations in India, that are not eligible toinvest in India, and entities prohibited from buying, selling or dealing in securities by the Securities andExchange Board of India (“SEBI”) shall not be eligible to participate in an offering of foreign currencyconvertible bonds. Each purchaser of the CARS™ is deemed to have acknowledged, represented and agreed thatit is eligible to invest in India under applicable law, including under the Issue of Foreign Currency ConvertibleBonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993, as amended from time totime, and that it has not been prohibited by SEBI from buying, selling or dealing in securities.

No person is authorized to give any information or to make any representation not contained in this OfferingMemorandum and any information or representation not so contained must not be relied upon as having beenauthorized on behalf of us or either of the initial purchasers. The delivery of this Offering Memorandum at anytime does not imply that the information contained in it is correct as at any time subsequent to its date.

The initial purchasers have not separately verified the information contained in this Offering Memorandum.Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility isaccepted by either of the initial purchasers as to the accuracy or completeness of the information contained in thisOffering Memorandum or any other information supplied in connection with the CARS™, the QSs, the Shares orthe ADSs. Each person receiving this Offering Memorandum acknowledges that such person has not relied oneither of the initial purchasers in connection with its investigation of the accuracy of such information or itsinvestment decision and each such person must rely on its own examination of us and the merits and risksinvolved in investing in the CARS™. You should consult your own advisers as needed to make your investmentdecision and determine whether you are legally able to purchase the CARS™ under applicable laws orregulations.

Market data and certain industry forecasts used throughout this Offering Memorandum have been obtainedfrom internal surveys, market research, publicly available information and industry publications. Industrypublications generally state that the information that they contain has been obtained from sources believed to bereliable but that the accuracy and completeness of that information is not guaranteed. Similarly, internal surveys,industry forecasts and market research, while believed to be reliable, have not been independently verified, andneither we nor either of the initial purchasers make any representation as to the accuracy of that information.

THE OFFERING IS BEING MADE IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION UNDER THESECURITIES ACT. EACH PURCHASER OF THE CARS™ WILL BE DEEMED TO HAVE MADE CERTAINACKNOWLEDGMENTS, REPRESENTATIONS AND AGREEMENTS REGARDING THE CARS™ AND THE

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QSs, SHARES OR ADSs ISSUABLE UPON CONVERSION OF THE CARS™ AND THE OFFER, SALE,REOFFER, PLEDGE OR OTHER TRANSFER OF THE CARS™ AND THE QSs, SHARES OR ADSs ISSUABLEUPON CONVERSION OF THE CARS™. SEE “TRANSFER RESTRICTIONS ON THE CARS™”.

In this Offering Memorandum, unless otherwise noted or the context otherwise requires, all financial andother data regarding our business and operations is presented on a non-consolidated basis for Tata MotorsLimited.

In this Offering Memorandum, unless the context otherwise requires, references to “our”, “us” and “we” areto Tata Motors Limited on a non-consolidated basis and references to “you” are to the prospective investors inthe CARS™. References to “US$” and “US dollars” in this Offering Memorandum are to United States dollars,references to “Rs.” and “rupees” are to the currency of India, references to “GBP” are to British pound sterling.We publish our financial statements in rupees. This Offering Memorandum contains translations of certain rupeeamounts into US dollar amounts at specified rates solely for the convenience of the reader. These translationsshould not be construed as representations that the rupee amounts represent such US dollar amounts or could be,or could have been, converted into US dollars at the rates indicated or at all. Unless otherwise indicated, alltranslations from rupee to US dollars have been made on the basis of exchange rates quoted by the FederalReserve Bank of New York on March 30, 2007 of Rs. 43.10 = US$1.00. As of July 6, 2007, the rupee/dollarbuying rate quoted by the Federal Reserve Bank of New York was Rs.40.36 = US$1.00.

References in this Offering Memorandum to light commercial vehicles, or LCVs, medium commercialvehicles, or MCVs, and heavy commercial vehicles, or HCVs, refer to vehicles that have a gross vehicle weight,or GVW, of up to 7.5 metric tonnes, between 7.5 and 16.2 metric tonnes, and over 16.2 metric tonnes,respectively. References in this Offering Memorandum to utility vehicles, or UVs, refer to vehicles that have aseating capacity of seven to 12 persons, excluding the driver. References in this Offering Memorandum to multi-purpose vehicles, or MPVs, refer to van-type vehicles that have a seating capacity of seven to 12 persons,excluding the driver. References in this Offering Memorandum to passenger cars refer to vehicles that have aseating capacity of up to six persons, including the driver; passenger cars are further classified into the followingsegments: mini cars, which have a length of up to 3,400mm; compact cars, which have a length between3,401mm and 4,000mm; mid-size cars, which have length between 4,001mm and 4,500mm; executive cars,which have a length between 4,501mm and 4,700mm; and premium cars and luxury cars, which have a lengthbetween 4,701 and 5,000mm, and above 5,001mm, respectively. “Millimeters” or “mm” are equal to 1/1000 of ameter. A meter is equal to approximately 39.37 inches and a millimeter is equal to approximately 0.039 inch.“Kilograms” or “kg” are each equal to approximately 2.2 pounds, and “metric tonnes” are equal to1,000 kilograms or approximately 2,200 pounds. Unless otherwise stated, comparative and empirical industrydata in this Offering Memorandum have been derived from published reports of SIAM. Our market share datapresented elsewhere in this document relates to domestic sales only.

References in this Offering Memorandum to a particular “fiscal” are to our fiscal year ended or ending onMarch 31 of the indicated year. “Indian GAAP” means accounting principles generally accepted in India. Allfinancial information in this Offering Memorandum has been presented in accordance with Indian GAAP. Alldiscrepancies in the tables included in this Offering Memorandum between the amounts listed and the totalsthereof are due to rounding.

The distribution of this Offering Memorandum and the offering and sale of the CARS™ in certainjurisdictions may be restricted by law. Persons into whose possession this Offering Memorandum comes arerequired by us and the initial purchasers to inform themselves about and to observe any such restrictions. ThisOffering Memorandum does not constitute, and may not be used for or in connection with, an offer or solicitationby anyone in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it isunlawful to make such offer or solicitation. For a description of further restrictions on offers and sales of theCARS™ and distribution of this Offering Memorandum, see “Plan of Distribution”.

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FORWARD-LOOKING STATEMENTS

All statements contained in this Offering Memorandum that are not statements of historical fact constitute“forward-looking statements”. Some of these statements can be identified by forward-looking terms, such as“anticipate”, “believe”, “can”, “could”, “estimate”, “expect”, “intend”, “seek”, “may”, “plan”, “will” and“would” or similar words. However, these words are not the exclusive means of identifying forward-lookingstatements. All statements regarding our expected financial condition and results of operations, business, plansand prospects are forward-looking statements. These forward-looking statements include statements as to ourbusiness strategy, our revenue and profitability, planned projects and other matters discussed in this OfferingMemorandum regarding matters that are not historical fact. These forward-looking statements and any otherprojections contained in this Offering Memorandum (whether made by us or any third party) involve known andunknown risks, uncertainties and other factors that may cause our actual results, performance or achievements tobe materially different from any future results, performance or achievements expressed or implied by suchforward-looking statements or other projections.

The factors that could cause our actual results, performances and achievements to be materially differentfrom any of our forward-looking statements include, among others:

• general political, social and economic conditions, and the competitive environment in India and othermarkets in which we operate and sell our products;

• fluctuations in the currency exchange rate of the rupee to the US dollar and other currencies;

• accidents and natural disasters;

• terms on which we finance our working capital and capital and product development expenditure andinvestment requirements;

• implementation of new projects, including mergers and acquisitions, planned by management;

• contractual arrangements with suppliers;

• government policies, including those specifically regarding the automotive industry, industrial licensing,environmental regulations, safety regulations, import restrictions and duties, excise duties, sales taxes,value added taxes, product range restrictions, diesel and gasoline prices and road network enhancementprojects;

• significant movements in the prices of key inputs such as steel, aluminum, rubber and plastics; and

• other factors beyond our control.

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SUMMARY

The following summary is qualified in its entirety by the more detailed information and our financialstatements that appear elsewhere in this Offering Memorandum. Unless otherwise stated, all financial and otherdata regarding our business and operations presented in this Offering Memorandum is on a non-consolidated basis.Unless otherwise stated, the information presented in this Offering Memorandum reflects the exercise in full of theover-allotment option described herein.

Overview

The Tata Group, founded by Jamsetji Tata in the mid-19th century, is one of India’s largest and mostrespected business conglomerates with 96 operating companies in seven business sectors and revenues of US$48billion in fiscal 2007. With revenues of US$7.4 billion in fiscal 2007, we, Tata Motors, are the second largestcompany in the Tata Group and a leading automotive player in India.

We are also the largest commercial vehicle and second largest passenger vehicle player in terms of unitssold in India during fiscal 2007. We have the widest portfolio of automotive products, ranging from sub-1-ton to40-ton GVW trucks (including pick-ups) and from small, medium, and large buses and coaches to passenger carsand utility vehicles. According to a 2003 report of Verband der Automobilindustrie (VDA), we are the fifthlargest medium and heavy commercial vehicle manufacturer and the second largest manufacturer of buses in theabove 8-ton category in the world.

Our automotive operations include the design, manufacture, assembly and sale of the above mentionedvehicles, related parts and accessories and the financing business for our vehicles.

In fiscal 2005, 2006 and 2007, we had total unit sales volumes of vehicles manufactured in India of 399,566,454,129 and 580,280 vehicles, respectively, of which 369,069, 403,906 and 526,806 vehicles were sold in India,respectively, crossing the half million vehicle sales mark in a year for the first time in our history.

Our overall four-wheel and automotive vehicle market share, as classified by the Society of IndianAutomobile Manufacturers (SIAM) to include cars, utility vehicles and commercial vehicles (trucks, pick-upsand buses), in India in fiscal 2005, 2006 and 2007 was 25.4%, 26.6% and 27.7%, respectively. We had a marketshare in medium and heavy commercial vehicles, or M&HCVs, in India of approximately 65.1%, 62.0% and62.7% for fiscal 2005, 2006 and 2007, respectively, and have a significant presence in the compact and mid-sizecar market.

We believe that we have established a strong position in the Indian automotive industry by launching newproducts, achieving high quality-low cost manufacturing, investing in research and development and maintainingour financial strength. We have also benefited from expansion of our manufacturing and distribution network andthe creation of a highly talented workforce. Our goal is to further widen and revamp our product portfolio,strengthen our position in the Indian market and expand our presence in other select geographies. We acquired a100% stake in Daewoo Commercial Vehicle, Korea in 2004 and a 21% stake in the Spanish bus and coachmanufacturer Hispano Carrocera in 2005. We also entered into joint venture arrangements with Fiat S.p.A in2006 for passenger cars, IVECO of Italy in 2007 for commercial vehicles, Marcopolo S.A. of Brazil in 2006 forbuses and Thonburi Automotive Assembly Plant Co., Thailand in 2006 for pick-ups.

We have a widespread sales and distribution network in India with over 1,200 sales outlets for ourcommercial vehicle and passenger vehicle businesses. We also have a widespread manufacturing footprint inIndia with 3 principal automotive manufacturing facilities in Jamshedpur (East), Pune (West) and Lucknow(North). We have also established a new manufacturing facility in Pantnagar (North) and are in process ofestablishing another 2 facilities at Singhur (East) and Dharwad (South).

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We believe that our technological leadership among Indian automotive companies has enabled us tosuccessfully design, develop and produce our own range of vehicles through in-house research and developmentactivities with assistance from foreign research consultants on a need basis. We have also set up a research anddevelopment facility in the United Kingdom to benefit from the European automotive trends and incorporatethose trends in our vehicles for our customers in India and abroad. In addition, we have also designed andmanufactured a significant portion of our production facilities, assembly lines and machinery.

The automotive industry has emerged as a ‘Sunrise Sector’ of the Indian economy. The Automotive MissionPlan (2006-16) of India envisions India as a destination of choice for design and development of automobiles andrelated parts. Robust economic growth, improvement in infrastructure, growing affluence and low car penetrationpresent years of great opportunity for the Indian automotive industry in general and for us in particular. Pursuingour ambitious goals to create a further dominant position in the Indian market and to be a global automotivemanufacturer with significant presence, we are in a strong position to benefit from the unfolding opportunity inthe Indian and the global automotive industry.

Corporate Information

Our registered address and corporate office is located at Bombay House, 24, Homi Mody Street, Mumbai400 001, India, our telephone number is +91-22-6665-8282 and our website is located at http://www.tatamotors.com.Information contained on our website does not constitute a part of this Offering Memorandum. Our ordinary shares arelisted on the BSE, the NSE, and one other stock exchange in India, namely the Madhya Pradesh stock exchange. Wehave announced our intention to pursue delisting of the Shares from the Madhya Pradesh stock exchange. Our existingADSs are listed on the New York Stock Exchange.

Tata Incorporated serves as our authorized United States representative. The address of Tata Incorporated is3 Park Avenue, 27th Floor, New York, NY 10016, United States of America.

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THE OFFERING

Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Motors Limited, a public company incorporated in theRepublic of India with limited liability.

The CARS™ . . . . . . . . . . . . . . . . . . . . . . . . . . . . Zero Coupon Convertible Alternative Reference Securitiesdue 2012.

The Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . US$450,000,000 initial aggregate principal amount of theCARS™ are being offered outside the United States inreliance on Regulation S under the Securities Act and otherapplicable laws. The CARS™ are not being offered in India.We granted to the initial purchasers an option to purchase upto US$40,000,000 additional aggregate principal amount ofCARS™ at the offering price, solely for the purpose ofcovering over-allotments. This option has been exercised infull and we have so notified the SGX-ST.

Issue Price of the CARS™ . . . . . . . . . . . . . . . . . 100%

Issue Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July 11, 2007

Maturity Date and Final Redemption . . . . . . . . Unless the CARS™ have been previously redeemed,repurchased and cancelled or converted, the Issuer willredeem the CARS™ on July 12, 2012 (the “Maturity Date”)at a price equal to 131.82% of the outstanding principalamount thereof.

Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The CARS™ will not bear any interest.

Status of the CARS™ . . . . . . . . . . . . . . . . . . . . . The CARS™ will be direct, unsecured and unsubordinatedobligations of the Issuer, ranking at least pari passu in rightof payment with all other unsecured and unsubordinated debtof the Issuer.

Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The CARS™ are not rated by any rating agency and theIssuer does not intend to seek a rating for the CARS™.

Indian Taxation . . . . . . . . . . . . . . . . . . . . . . . . . Payments by the Issuer in respect of the CARS™ and alldeliveries of Shares or ADSs made upon conversion of theCARS™ will be made free and clear of, and withoutdeduction or withholding in respect of Indian taxation saveto the extent required by law. Where tax is required to bededucted or withheld, the Issuer will gross up the taxableamount and will be required to account separately to theIndian tax authorities for any withholding taxes applicableon such amounts. The CARS™ (together with the Shares orADSs issuable upon conversion of the CARS™ and theShares represented by such ADSs) will have the benefit ofthe tax concessions available under the provisions ofSection 115AC of the Income Tax Act, 1961 of India and

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The Issue of Foreign Currency Convertible Bonds andOrdinary Shares (through Depositary Receipt Mechanism)Scheme 1993 promulgated by the Government of India (the“Depositary Receipt Scheme”). These tax concessionsinclude withholding in respect of interest and premium onthe CARS™ at a reduced rate of 10% plus an applicablesurcharge and an education cess. Gains realized outside Indiaon the sale or transfer of such CARS™ or ADSs (but not theShares represented by those ADSs) by a holder who is anon-resident of India to another non-resident of India areexempt from Indian capital gains tax. See “Taxation —Indian Taxation of the CARS™”.

Under current Indian laws, no tax is payable by therecipients of dividends on shares of an Indian company,including Shares deliverable upon conversion of the CARS™

and Shares represented by ADSs. However, the Issuer willbe liable to pay distribution tax on dividends paid on theShares (including Shares represented by ADSs) at a rate ofapproximately 17% (inclusive of surcharge and educationcess).

Conversion of the CARS™ . . . . . . . . . . . . . . . . Subject to certain conditions and limitations, each Holderwill have the right during the Conversion Period and theChange of Control Conversion Period (each as definedherein) (or, if the CARS™ shall have been called forredemption, until the seventh day prior to the date fixed forany redemption) to convert its CARS™ (i) in the event therehas been a Qualifying Issue by the time of conversion, intoQSs (ii) in the event that there has been a Qualifying Issuebut we notify the Holders that the CARS™ are no longerconvertible into QSs, into Shares or ADSs, each currentlyrepresenting one Share, at their election, or (iii) in the eventthat there has not been a Qualifying Issue of QSs, at theHolder’s election into Shares or ADSs; provided, however,that such right to convert the CARS™ into QSs, Shares orADSs will be suspended during any Closed Period (asdefined herein), and the Conversion Period and the Changeof Control Conversion Period shall not include any suchClosed Period. See “Description of the CARS™ —Conversion”.

Conversion Period Commencement Date . . . . . October 11, 2011, or, if such date is not a Business Day, thenext following Business Day.

Conversion Price . . . . . . . . . . . . . . . . . . . . . . . . The initial Conversion Price will be Rs.960.96 per Sharewith a fixed rate of exchange on conversion ofRs.40.59 = US$1.00 The Conversion Price will be subject toadjustment in certain circumstances. See “Description of theCARS™ — Conversion” and “— Adjustments”.

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Conversion Price Reset Date . . . . . . . . . . . . . . . The Conversion Price Reset Date shall be the later of (i) theBusiness Day prior to the Conversion PeriodCommencement Date, in the event that there has been aQualifying Issue prior to the Conversion PeriodCommencement Date or (ii) the date an issue and listing ofQSs satisfies all conditions to become a Qualifying Issue.

Conversion Reset Pricing Period . . . . . . . . . . . . The Conversion Reset Pricing Period is the three monthperiod ending on the Conversion Price Reset Date.

Qualifying Issue . . . . . . . . . . . . . . . . . . . . . . . . . Qualifying Issue means the offering and listing of QSs whichin aggregate complies with the rules of a Relevant StockExchange and the following conditions: (a) it is an offer ofQSs for subscription for cash to no fewer than 20institutional investors other than the companies which areAffiliated to us, accompanied by the grant of listing of, orpermission to deal in, the QSs by the Relevant StockExchange and such listing is continuing; (b) the aggregatenumber of Shares underlying or related to the QSs listed andavailable for trading on the Relevant Stock Exchange or onan over-the-counter basis is equal to or greater than 75% ofthe number of Shares which would have been issued in theevent that all of the CARS™ were converted on the day oftheir issue into Shares at the then current Conversion Price;and (c) the Conversion Price, if reset based on the ClosingPrices of the QSs over the three month period after the issueand listing of any such QSs (see “Description of theCARS™ — Conversion — Conversion Right”) and whichwould be applicable in the event of any conversion into QSs,would be greater than the SEBI Floor Price.

Relevant Stock Exchange . . . . . . . . . . . . . . . . . Any one of the London Stock Exchange, the LuxembourgStock Exchange, the SGX-ST, the Tokyo Stock Exchange orany other exchange that may be approved by an IndependentFinancial Institution.

Restrictive Covenants . . . . . . . . . . . . . . . . . . . . The Issuer has agreed to observe certain covenants,including, among other things, limitations on the incurrenceof any Liens (as defined herein) to secure paymentobligations under any Debt Instruments (as defined herein).See “Description of the CARS™ — Certain Covenants”.

Repurchase of CARS™ in the Event ofDelisting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . To the extent permitted by applicable law, unless the

CARS™ have been previously redeemed, repurchased andcancelled or converted in the event of a Delisting (asdescribed herein) of the Shares from the BSE and the NSE,each Holder shall have the right, at such Holder’s option, torequire the Issuer to repurchase all (or any portion of theprincipal amount thereof which is US$100,000 or anyintegral multiple thereof) of such Holder’s CARS™ at a priceequal to the Early Redemption Amount. The date for such

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repurchase shall be set by the Issuer, and shall not be lessthan 30 days nor more than 60 days following the date theIssuer informs the Holders of the Delisting. See “Descriptionof the CARS™ — Repurchase of CARS™ in the Event ofDelisting”.

Repurchase of CARS™ in the Event of Changeof Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . To the extent permitted by applicable law, unless the

CARS™ have been previously redeemed, repurchased andcancelled or converted each Holder shall have the right, atsuch Holder’s option, to require the Issuer to repurchase all(or any portion of the principal amount thereof which isUS$100,000 or any integral multiple thereof) of suchHolder’s CARS™ at a price equal to the Early RedemptionAmount upon the occurrence of a Change of Control (asdefined herein). See “Description of the CARS™ —Repurchase of CARS™ in the Event of Change of Control”.

Redemption at the Option of the Issuer . . . . . . . The CARS™ may be redeemed at the option of the Issuer,and subject to relevant Indian laws and regulations, in wholebut not in part, at any time after October 11, 2011 but priorto the Maturity Date, at the Early Redemption Amount,provided, that prior to the date on which the notice ofredemption is given by us, less than 10% in aggregateprincipal amount of the CARS™ originally issued isoutstanding. See “Description of the CARS™ — Redemptionof CARS™ at Our Option”.

Redemption at Maturity . . . . . . . . . . . . . . . . . . . Unless the CARS™ have been previously redeemed,repurchased and cancelled or converted, the Issuer willredeem the CARS™ at 131.82% of their principal amount onthe Maturity Date.

Redemption for Taxation Reasons . . . . . . . . . . The CARS™ may be redeemed at the option of the Issuer,and subject to relevant Indian laws and regulations, in wholebut not in part, at the Early Redemption Amount, in theevent of certain changes affecting taxes as specified in“Description of the CARS™ — Redemption for TaxationReasons”.

Reserve Bank of India Approval Required forRedemption or Repurchase . . . . . . . . . . . . . . . . Under current Reserve Bank of India (RBI) regulations

applicable to convertible alternative reference securities, weare required to obtain the prior approval of the RBI beforeeffecting any repurchase or redemption of the CARS™ priorto the Maturity Date.

SEBI Floor Price . . . . . . . . . . . . . . . . . . . . . . . . Rs.805.39 per Share, subject to certain adjustment. See“Description of the CARS™ — Adjustments” to the extentpermitted by Indian law and regulation.

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Denomination, Form and Title of CARS™ . . . . The CARS™ will be deliverable only in registered form andonly in denominations of US$100,000 or any integralmultiple thereof. The CARS™ will be represented by onepermanent Global Security in definitive fully registered formwithout interest coupons. Except as described in thisOffering Memorandum, interests in the Global Security willbe shown on, and transferred only through, recordsmaintained by Euroclear Bank S.A./N.V. (“Euroclear”) andClearstream Banking, société anonyme (“ClearstreamLuxembourg”). Except in the limited circumstancesdescribed in this Offering Memorandum, individualcertificates in respect of CARS™ will not be issued inexchange for interests in the Global Security.

Transfer Restrictions on the CARS™ . . . . . . . . The CARS™ represented by the Global Security will bearrelevant Securities Act legends and such CARS™ (or anybeneficial interest therein) may not be transferred except incompliance with the transfer restrictions set forth in suchlegends.

Share Ranking . . . . . . . . . . . . . . . . . . . . . . . . . . Shares (including Shares represented by ADSs) issued uponconversion of the CARS™ will be fully-paid andnon-assessable and will, subject to listing, rank pari passuwith the issued and outstanding Shares on the relevantConversion Date (as defined herein). All such Shares that areissued and outstanding on the record date for any dividendthat the Issuer may declare on the Shares will be entitled tothe full amount of such dividend regardless of the period oftime such Shares have been issued and outstanding. TheseShares will not, however, be entitled to any rights as of anyrecord date that precedes the relevant Conversion Date.

QSs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . QS means a qualifying security being a validly issued andenforceable instrument which may be in the form of: (i) adepositary receipt issued in respect of one Share on termssimilar to those applying to the ADSs but which provide thatholders have no or differential voting rights (in comparisonto the existing Shares) and have no right to withdraw theunderlying Shares from the relevant depositary facilityexcept: (a) upon our insolvency; or (b) in order to allowholders to accept an offer for all of our shares pursuant toIndian delisting regulations; or (c) in order to allow holdersto accept an offer by us to buy back Shares; or (d) otherwiseas set out in the relevant depositary facility; (ii) an equityshare issued by us with differential rights as to dividendsand/or voting (in comparison to the existing Shares),provided that in the case of a share with differential rights asto dividends, the rights to receive dividends with respect tosuch share shall be at least as favorable as the right toreceive dividends with respect to our existing Shares, and

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provided that we obtain an opinion from an IndependentFinancial Institution (as defined herein) that in their opinion,based on the terms of the relevant share, when issued it isreasonably likely to be purchased and sold at prices whichare determined by reference to the Shares; or (iii) adepositary receipt issued in respect of an equity share as setforth in subsection (ii), provided that we obtain an opinionfrom an Independent Financial Institution that in theiropinion, based on the terms of the relevant share anddepositary receipt, when issued it is reasonably likely to bepurchased and sold at prices which are determined byreference to the Shares.

ADSs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Issuer currently has ADSs in issue that are listed on theNew York Stock Exchange and application will be made forany ADSs issued upon conversion of the CARS™ to be listedon the New York Stock Exchange. Each ADS represents oneShare of the Issuer. The ADSs to be issued upon conversionof the CARS™ will be issued pursuant to the DepositAgreement (as defined herein).

Voting Rights of Holders of ADSs . . . . . . . . . . There are limitations on redeposits of Shares that have beenwithdrawn from the ADS deposit facilities and on depositsof Shares acquired in the open market. See “Description ofthe American Depositary Shares — Issuance of ADSs uponDeposit of Shares” and “— Withdrawal of Shares UponCancellation of ADSs”.

Holders of ADSs may exercise voting rights with respect tothe Shares represented by ADSs only in accordance with theprovisions of the Deposit Agreement and Indian law.Holders of ADSs are not entitled to attend or vote atshareholders meetings. A holder of ADSs may withdrawfrom the ADS facility the related underlying Shares and voteas a direct shareholder, but there may not be sufficient timeto do so after the announcement of an upcoming vote. Ifrequested by us, the Depositary will notify holders of ADSsof upcoming votes and arrange to deliver our votingmaterials to holders of ADSs. In such case, the Depositarywill try, insofar as practicable, subject to Indian laws and theprovisions of our Articles of Association, to vote or have itsagents vote the deposited securities as instructed by holdersof ADSs. The Depositary will only vote as instructed and isnot entitled to exercise any voting discretion. If theDepositary does not receive timely instructions from aholder of ADSs, the holder shall be deemed to haveinstructed the Depositary to give a discretionary proxy to aperson designated by us, subject to the conditions set forth inthe Deposit Agreement. If requested by us, the Depositary isrequired to represent all shares underlying the outstanding

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ADSs, regardless whether timely instructions have beenreceived from the holders of such ADSs, for the sole purposeof establishing a quorum at a meeting of shareholders. Thereare limitations on redeposits of withdrawn Shares under theDeposit Agreement. Moreover, registration of transfers ofShares may be refused in certain circumstances. See“Description of the Shares — Voting Rights” and“— Transfer of Shares”, “Description of the AmericanDepositary Shares — Voting Rights” and “Indian SecuritiesMarket — Takeover Code”.

Fungibility of ADSs Issued on Conversion withExisting ADSs . . . . . . . . . . . . . . . . . . . . . . . . . . Except as described above under the captions “— Share

Ranking” and “— ADSs”, the ADSs issued on conversion ofthe CARS™ will be fungible (including with respect totrading and settlement) with the existing ADSs representedby the Master ADR and will trade and settle through thefacilities of DTC under the same security identificationnumbers.

Restriction on Disposition of Securities . . . . . . The CARS™ and the QSs, Shares or ADSs deliverable uponconversion of the CARS have not been, and will not be,registered under the Securities Act. Offers and sales of theCARS™ offered in the offering and the QSs, Shares or ADSsissuable upon conversion of the CARS™ will be subject tocertain restrictions described in “Transfer Restrictions on theCARS™” and “Plan of Distribution”.

Trustee for the CARS™ . . . . . . . . . . . . . . . . . . . Citibank, N.A., London Branch

Paying and Conversion Agent for theCARS™ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Citibank, N.A., London Branch

Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Citigroup Global Markets Deutschland AG & Co., KGaA

Common Depositary for the CARS™ . . . . . . . . Euroclear system and Clearstream Banking, société anonyme

Depositary for the ADSs . . . . . . . . . . . . . . . . . . Citibank, N.A.

Depositary for the Global Security . . . . . . . . . . Citibank, N.A., as common depositary for Euroclear andClearstream, Luxembourg.

Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . The CARS™ and the Indenture (as defined herein) will eachbe governed by the laws of the State of New York. ThePurchase Agreement and the Deposit Agreement aregoverned by New York law.

Further Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . The Issuer may from time to time without the consent of theHolders create and issue further securities having the sameterms and conditions as the CARS™ in all respects so thatsuch further issue shall be consolidated and form a singleseries with the CARS™.

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Listings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Approval into principle has been received for the listing ofthe CARS™ on the SGX-ST. If the listing is approved, theCARS™ will be traded on the SGX-ST in a minimum boardlot size of US$200,000 for so long as the CARS™ are listedon the SGX-ST. The offering and settlement of the CARS™

are not conditioned on obtaining listing on the SGX-ST. Theexisting ADSs are listed on the New York Stock Exchangeand application will be made to have ADSs deliverable uponconversion of the CARS™ listed on the New York StockExchange. We have undertaken to apply to have the Shares(including those that may be represented by ADSs) issuableupon conversion of the CARS™ approved for listing on theBSE, the NSE and any other stock exchanges in India onwhich the Shares are listed from time to time.

Trading Market for the Shares . . . . . . . . . . . . . . The only trading markets for the Shares are the BSE, theNSE and the Madhya Pradesh stock exchange. The Shareshave been listed on the BSE since August 1959 and on theNSE since June 1998. We have announced our intention topursue delisting of the Shares from the Madhya Pradeshstock exchange.

Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . The net proceeds from this offering, after deduction ofunderwriting fees, discounts and commissions but beforededuction of other expenses relating to this offering, areexpected to be approximately US$486.3 million, which weintend to use for capital expenditures, overseas investments,acquisitions and other purposes, as may be permitted underIndian law.

Lock-Up Agreement . . . . . . . . . . . . . . . . . . . . . The Issuer has agreed, subject to certain exceptions, not toissue or offer, sell, contract to sell any Shares or anysecurities convertible, exchangeable or exercisable forShares (including any warrants), for a period of 90 daysfollowing the Closing Date, without the prior written consentof the initial purchasers.

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RISK FACTORS

This Section describes the risks that we currently believe may materially affect our business. You shouldcarefully consider the following, in addition to any forward-looking statements and the cautionary statementscontained elsewhere in this Offering Memorandum and the other information contained in this OfferingMemorandum, before making any investment decision relating to the CARS™ and the QSs, Shares or ADSsdeliverable upon the conversion of the CARS™. The risks described below are not the only ones relevant to us,the CARS™, the Shares, the QSs or the ADSs. Additional risks may be unknown to us, and some risks that we donot currently believe to be material could later turn out to be material. Whilst we would be making allreasonable efforts to mitigate or minimize these risks, one or more of a combination of these risks couldmaterially impact our business, revenues, sales, net assets, results of operations, liquidity and capital resources.

Risks Associated with Our Business and the Indian Automotive Industry

General economic conditions could have a significant adverse impact on our sales and results of operations.

The Indian automotive industry is substantially affected by general economic conditions in India. Thedemand for automobiles in the Indian market is influenced by factors including the growth rate of the Indianeconomy, increase in disposable income among Indian consumers, interest rates and fuel prices. There can be noassurance that the Indian economy will not experience a downturn, and weakening of economic activity. Anincrease in interest rates and/or increases in fuel prices are examples of developments that could lead to a declinein the demand for automobiles in the Indian market, which could significantly affect our sales and future resultsof operations in an adverse manner.

Currency and exchange rate fluctuations could adversely affect our results of operations.

We are sensitive to fluctuations in foreign currency exchange rates. We engage in currency hedging in orderto decrease our foreign exchange exposure and a weakening of the rupee against the dollar or other major foreigncurrencies may have an adverse effect on our cost of borrowing and consequently may increase our financingcosts, which could have a significant adverse impact on our results of operations.

In addition, we have experienced and can be expected to continue to experience foreign exchange losses andgains on obligations denominated in foreign currencies in respect of our borrowings and foreign currency assetsand liabilities due to currency fluctuations. While the rupee appreciation against the dollar in the recent past hascontributed positively to our financial condition, any depreciation in the value of the rupee against the dollar maylead to adverse effects on our financial condition and results of operations during the current fiscal year and infuture periods, partly due to an increase in our dollar and/or Japanese yen denominated debt.

Intensifying competition in the Indian market could materially and adversely affect our sales and results ofoperations.

The Indian automobile industry is highly competitive. We face strong competition in the Indian market fromdomestic as well as foreign automobile manufacturers, and competition from foreign competitors is likely tointensify further in the future. There can be no assurance that we will be able to implement our future strategiesin a way that will mitigate the effects of increased competition in the Indian automotive industry.

Our future success depends on our ability to satisfy changing customer demands by offering innovativeproducts in a timely manner and maintaining such products’ competitiveness.

In the competitive automotive industry, our competitors can gain significant advantage if they are able tooffer products satisfying customer needs earlier than we are able to, which could adversely impact our sales andresults of operations. Unanticipated delays in our proposed expansion plans resulting in delays in capacity

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enhancements could adversely impact our results of operations. In addition, there can be no assurance that themarket acceptance of our future products will meet our expectations, in which case we could be unable to realizethe intended economic benefits of our investments and our results of operations may be adversely affected.

We are subject to risks associated with product liability, warranty and recall.

We are subject to risks and costs associated with product liability, warranty and recall should we supplydefective products, parts, or related after-sales services, which could generate adverse publicity and adverselyaffect our business, results of operations and financial condition.

Underperformance of our distribution channels and supply chains may adversely affect our sales and resultsof operations.

We have selected and developed exclusive dealers across India and a network of distributors and localdealers in select international markets for distribution of our products and we believe that we provide adequateincentives and support to ensure that such dealers perform to our expectations. There can be no assurance,however, that our performance expectations will be met, which could adversely affect our sales and results ofoperations. In addition, while we believe that we have a robust and efficient supply chain, we rely on some keyvendors for some raw materials, parts and components used in the manufacture of our products. Our ability toprocure these supplies in a cost effective and timely manner is subject to various factors, some of which are notalways within our control. While we have not experienced significant problems with our supply chain in the past,that have materially affected our results of operations, any significant problems with our supply chain in thefuture could affect our results of operations in an adverse manner.

Increases in commodity prices may have a material adverse impact on our result of operations.

In fiscal 2005, 2006 and 2007, consumption of raw materials and components formed approximately 64.6%,64.2% and 65.1%, respectively, of our operating revenue net of excise duty. Prices of these commodity itemsused in manufacturing automobiles, including steel, rubber, copper, and zinc, etc are on the rise. While we havebeen pursuing various cost reduction programs to partially offset these price increases, there can be no assurancethat we will be able to recover any future cost increases in commodity products through cost-saving measureselsewhere or that we will be able to increase the selling prices of our products, which could materially andadversely impact our sales and results of operations.

The performance of our subsidiaries and affiliates may adversely affect our results of operations.

We have made and may continue to make capital commitments to our subsidiaries and affiliates, and if thebusiness and operations of subsidiaries and affiliates, to whom we make capital commitments, deteriorate ourresults of operations may be adversely affected in the future.

We are subject to risks associated with growing our business through mergers and acquisitions.

We continuously evaluate growth opportunities through suitable mergers and acquisitions. These involvebusiness risks, including unforeseen contingent risks or latent business liabilities that may only become apparentafter the merger or acquisition is finalized, successful integration and management of the merged/acquired entitywith us, retention of key personnel, joint sales and marketing efforts, management of a larger business anddiversion of management’s attention from other ongoing business concerns. If we are not able to manage theserisks successfully our results of operations could be adversely affected.

We may be adversely affected by labor unrest.

All of our regular employees other than officers and management, are members of labor unions and arecovered by our wage agreements with those labor unions which have different terms (typically three years) atdifferent locations. In general, we consider our labor relations with all of our employees to be good. However, we

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may in the future be subject to labor unrest, which may delay or disrupt our operations in the affected regions,including the acquisition of raw materials and parts, the manufacture, sales and distribution of products and theprovision of services. If work stoppages or lock-outs at our facilities or at the facilities of our major vendorsoccur or continue for a long period of time, our business, financial condition or results of operations may beadversely affected.

Risk Associated with Political and Regulatory Risk

India’s obligations under the World Trade Organization agreement.

India’s obligation under its World Trade Organization agreement could lower the level of relatively hightariffs on imports of components and vehicles particularly with respect to cars in completely built units and/orcompletely knocked down units, which could adversely affect our sales and results of operations.

Extensive environmental and other government regulations in the Indian Automotive sector could increaseour operations costs which in turn could materially and adversely affect our results of operations.

As an automobile company, we are subjected to extensive governmental regulations regarding vehicleemission levels, noise, safety and levels of pollutants generated by our production facilities. These regulations arelikely to become more stringent and the costs to comply with the same may significantly impact our future resultsof operations. Imposition of any additional taxes and levies by the Indian government designed to limit the use ofautomobiles could adversely affect the demand for our products and our results of operations. Regulations in theareas of investments, taxes and levies may also have an impact on Indian securities, including our Shares, QSsand ADSs.

We may be adversely impacted by political instability, wars, terrorism, multinational conflicts, naturaldisasters, fuel shortages/prices, epidemics and labor strikes.

Our products are exported to other geographical markets from India and we plan to expand our internationaloperations, further in the future. As such, we are subject to various risks associated with conducting our businessworldwide and our operations may be subject to political instability within and outside India, wars, terrorism,regional and/or multinational conflicts, natural disasters, fuel shortages, epidemics and labor strikes. Anysignificant or prolonged disruptions or delays in our operations related thereto could adversely impact our resultsof operations.

Compliance with new and changing corporate governance and public disclosure requirements addsuncertainty to our compliance policies and increases our costs of compliance.

Changing laws, regulations and standards relating to accounting, corporate governance and publicdisclosure, including the U.S. Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), and new U.S. Securitiesand Exchange Commission regulations, Securities and Exchange Board of India (“SEBI”) regulations, NYSElisting rules and Indian stock market listing regulations, have increased complexity for us. These new or changedlaws, regulations and standards may lack specificity and are subject to varying interpretations. Their applicationin practice may evolve over time as new guidance is provided by regulatory and governing bodies. This couldresult in continuing uncertainty regarding compliance matters and higher costs of compliance as a result ofongoing revisions to such governance standards.

In particular, our efforts to comply with Section 404 of the Sarbanes-Oxley Act and the related regulationsregarding our required assessment of our internal controls over financial reporting and our independentaccountants’ audit of that assessment requires the commitment of significant financial and managerial resources.We are committed to maintaining high standards of corporate governance and public disclosure, and our effortsto comply with evolving laws, regulations and standards in this regard have resulted, and are likely to continue toresult, in increased general and administrative expenses and a diversion of management time and attention fromrevenue-generating activities to compliance activities.

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Risks Associated with Investments in an Indian Company.

Political changes in the Government in India could delay the further liberalization of the Indian economy andadversely affect economic conditions in India generally and our business in particular.

Substantially our manufacturing and sales and distribution facilities are located in India, and in fiscal 2007,2006 and 2005, approximately 90.2%, 89.4% and 91.7%, respectively, of our operating revenue net of exciseduty were derived from sales within India.

Our business, and the market price and liquidity of our Shares, QSs and ADSs, may be affected by foreignexchange rates and controls, interest rates, changes in government policy, taxation, social and civil unrest andother political, economic or other developments in or affecting India.

Since 1991, successive Indian Governments have pursued policies of economic liberalization, includingsignificantly relaxing restrictions on the private sector. Nevertheless, the roles of the Indian central and stategovernments in the Indian economy as producers, consumers and regulators have remained significant.Consequent to an election in April and May 2004, there was a change in government. While the coalitiongovernment has already committed to a common minimum agenda, there can be no assurance that there will notbe changes in the economic reform, and specific laws and policies affecting automotive companies, foreigninvestment, currency exchange and investment regulations governing India’s capital markets that couldnegatively affect us. Uncertainty regarding possible policy changes immediately after elections has in the pastresulted in significant volatility in price and trading volumes of securities of Indian companies. A significantchange in India’s economic liberalization and deregulation policies could adversely affect business and economicconditions in India generally, and our business in particular, if new restrictions on the private sector areintroduced or if existing restrictions are increased.

Regional conflicts in Asia and other export markets could adversely affect the Indian economy and cause ourbusiness to suffer.

The Asian region has from time to time experienced instances of civil unrest and hostilities amongneighboring countries, and military hostilities and civil unrest in other Asian countries. Events of this nature inthe future could influence the Indian economy and could have a material adverse effect on the market forsecurities of Indian companies, including our Shares, QSs and ADSs, and on the market for our vehicles.

Rights of shareholders under Indian law may be more limited than under the laws of other jurisdictions.

Our Articles of Association, which include regulations applicable to our Board of Directors, and Indian lawgovern our corporate affairs. Legal principles relating to these matters and the validity of corporate procedures,directors’ fiduciary duties and liabilities, and shareholders’ rights may differ from those that would apply to acompany in another jurisdiction. Shareholders’ rights under Indian law may not be as extensive as shareholders’rights under the laws of other countries or jurisdictions. You may have more difficulty in asserting your rights asa shareholder than you would as a shareholder of a corporation organized in another jurisdiction.

The market value of your investment may fluctuate due to the volatility of the Indian securities market.

The Indian stock exchanges have, in the past, experienced substantial fluctuations in the prices of their listedsecurities. The Indian stock exchanges, including the BSE, have experienced problems that, if they continue orrecur, could affect the market price and liquidity of the securities of Indian companies, including our shares.These problems have included temporary exchange closures, broker defaults, settlement delays and strikes bybrokers. In addition, the governing bodies of the Indian stock exchanges have from time to time imposedrestrictions on trading in certain securities, limitations on price movements and margin requirements.Furthermore, from time to time disputes have occurred between listed companies, and stock exchanges and otherregulatory bodies, which in some cases may have had a negative effect on market sentiment.

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There is a lower level of regulation and monitoring of the Indian securities markets and the activities ofinvestors, brokers and other participants than in some other countries. The Securities and Exchange Board ofIndia, or SEBI, received statutory powers in 1992 to assist it in carrying out its responsibility for improvingdisclosure and other regulatory standards for the Indian securities markets. Subsequently, SEBI has prescribedregulations and guidelines in relation to disclosure requirements, insider dealing and other matters relevant to theIndian securities market. There may, however, be less publicly available information about Indian companiesthan is regularly made available by public companies in some other countries.

Investors may have difficulty enforcing judgments against us or our management.

We are a limited liability public company incorporated under the laws of India. Substantially all of ourdirectors and executive officers are residents of India and all or a substantial portion of our assets and the assetsof such persons are located in India. As a result, it may not be possible for investors to (i) effect service ofprocess upon us or such persons in jurisdictions outside of India or (ii) enforce against us or them judgmentsobtained in courts outside of India.

India is not a party to any international treaty in relation to the recognition or enforcement of foreignjudgments. Recognition and enforcement of foreign judgments is provided under Section 13 of the Code of CivilProcedure, 1908, or the Civil Code.

Section 13 and Section 44A of the Civil Code provide that a foreign judgment shall be conclusive as to anymatter thereby directly adjudicated upon except (i) where it has not been pronounced by a court of competentjurisdiction, (ii) where it has not been given on the merits of the case, (iii) where it appears on the face of theproceedings to be founded on an incorrect view of international law or a refusal to recognize the law of India incases where Indian law is applicable, (iv) where the proceedings in which the judgment was obtained wereopposed to natural justice, (v) where it has been obtained by fraud or (vi) where it sustains a claim founded on abreach of any law in force in India.

Section 44A of the Civil Code provides that where a foreign judgment has been rendered by a superior courtin any country or territory outside India which the Government has by notification declared to be a reciprocatingterritory, it may be enforced in India by proceedings in execution as if the judgment had been rendered by therelevant court in India. However, Section 44A of the Civil Code is applicable only to monetary decrees not beingin the nature of any amounts payable in respect of taxes or other charges of a like nature or in respect of a fine orother penalty.

Any judgment of a court in a country that has not been declared by the Government of India to be areciprocating territory for the purpose of Section 44A of the Civil Code may be enforced only by a suit upon thejudgment and not by proceedings in execution. The suit must be brought in India within three years from the dateof the judgment in the same manner as any other suit filed to enforce a civil liability in India. It is unlikely that acourt in India would award damages on the same basis as a foreign court if an action is brought in India.Furthermore, it is unlikely that an Indian court would enforce foreign judgments if it viewed the amount ofdamages awarded as excessive or inconsistent with Indian practice. A party seeking to enforce a foreignjudgment in India is required to obtain approval from the Reserve Bank of India (RBI) to execute such ajudgment or to repatriate outside India any amount recovered.

Significant differences exist between Indian GAAP and other accounting principals, which may be material tothe financial information contained in this Offering Memorandum.

As stated in the report of our auditors included in this Offering Memorandum, the audited financialinformation included in this Offering Memorandum is prepared and presented in conformity with Indian GAAP,consistently applied during the periods stated in those reports, except as otherwise provided therein, and noattempt has been made to reconcile any of the information given in this Offering Memorandum to any other

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principles or to base it on any other standards. Indian GAAP differs from accounting principles and auditingstandards with which prospective investors may be familiar in other countries. Significant differences existbetween Indian GAAP and other accounting principals, which may be material to the financial informationcontained in this Offering Memorandum. We have made no attempt to quantify the effect of any of thosedifferences. In making an investment decision, investors must rely upon their own examination of us, the termsof the offering and the financial information contained in this Offering Memorandum.

Risks Associated with the CARS™, Shares, QSs and ADSs.

An active market for the CARS™ may not develop, which may cause the price of the CARS™ to fall.

There is no existing market for the CARS™, and there can be no assurance regarding the future developmentof a market for the CARS™, the ability of Holders to sell their CARS™ or the price at which Holders may be ableto sell their CARS™.

Although approval in-principle has been received for the listing of the CARS™ on the SGX-ST, noassurance can be given that the CARS™ will be listed on SGX-ST or, if they are, that the CARS™ will continueto be listed for so long as they are outstanding. In addition, the CARS™ could trade at prices that may be lowerthan the initial market value thereof depending on many factors, including prevailing market interest rates, ouroperating results and the market for similar securities. The initial purchasers have no obligation to make a marketin the CARS™. In addition, the market for debt securities in emerging markets has been subject to disruptionsthat have caused substantial volatility in the prices of securities similar to the CARS™. There can be no assurancethat the markets for the CARS™, if any, will not be subject to similar disruptions. Any disruptions in thesemarkets may have an adverse effect on the market price of the CARS™.

Rights to receive payments on the CARS™ are subordinated to our secured indebtedness and are structurallysubordinated to the indebtedness and liabilities of our subsidiaries.

As at March 31, 2007, our long-term debt (including current portion of long-term debt) was Rs.25,535.6million. The CARS™ will be effectively subordinated to any of our secured obligations with respect to the assetsthat secure such obligations. The terms of the CARS™ do not prevent us from incurring additional debt, subjectto meeting certain covenants. See “Description of CARS™ — Certain Covenants”. In addition, the CARS™ willbe structurally subordinated to the existing and future indebtedness and other liabilities and obligations of oursubsidiaries. Claims of creditors of such entities will have priority over the assets of such entities over us or ourcreditors, including the Holders.

Upon a change of control, a delisting of the Shares from the BSE and the NSE or in the case of an Event ofDefault, we may not be in a position to repurchase or repay the CARS™.

Upon a change of control of Tata Motors Limited, a delisting of the Shares from the BSE and the NSE orthe occurrence of an Event of Default (as defined herein) with respect to the CARS™, the Holders may require usto repurchase or repay all (or a portion of) the CARS™. See “Description of the CARS™ — Repurchase ofCARS™ in the Event of Delisting”. We may not be able to repurchase or repay all or any of the CARS™ if therequisite regulatory approval is not received, or if we do not have sufficient cashflow to repurchase the CARS™.

Holders will bear the risk of fluctuations in the price of the Shares or ADSs.

The market price of the CARS™ is expected to be affected by fluctuations in the market price of the Sharesor ADSs. It is impossible to predict whether the price of the Shares or ADSs will rise or fall. Trading prices ofthe Shares or ADSs will be influenced by, among other things, our financial condition, results of operations andpolitical, economic, financial and other factors. Any decline in the price of the Shares or ADSs may have anadverse affect on the market price of the CARS™.

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Fluctuations in the exchange rate between the rupee and the US dollar may have a material adverse effect onthe value of the CARS™ and the QSs, Shares or ADSs deliverable upon conversion of the CARS™,independent of our operating results.

The price of the CARS™ will be quoted in US dollars. The Shares are quoted in rupees on the BSE, the NSEand one other stock exchange in India, namely the Madhya Pradesh stock exchange. The ADSs are quoted in USdollars. The QSs will be quoted in US dollars. Our application for delisting is pending for confirmation with theMadhya Pradesh stock exchange. Any dividends in respect of the Shares will be paid in rupees and subsequentlyconverted into US dollars for distribution to QS or ADS holders. Market prices for the QSs or ADSs may fall ifthe value of the rupee declines against the US dollar. In addition, the dollar amount of any cash dividends orother cash payments to holders of the QSs or ADSs would decline if the value of the rupee declines against theUS dollar. ADS holders who seek to sell in India any Shares represented by ADSs issued upon conversion of theCARS™ or any Shares withdrawn upon surrender of any such ADS, and to convert the rupee proceeds of suchsale into foreign currency and remit such foreign currency from India, will require the approval of the RBI foreach such transaction (unless such Shares are sold on a stock exchange in India on which the Shares are listed). Adelay in obtaining such approval might adversely affect the rate of exchange available for such conversion.

The exchange rate between the rupee and the US dollar has changed substantially in the last two decades andmay substantially fluctuate in the future. On an annual average basis, the rupee declined against the US dollar since1980. The rupee lost approximately 15% of its value relative to the dollar in the three year period ended March 31,2002 but generally appreciated in value against the dollar during fiscal 2003 and fiscal 2004. The rupee, however,depreciated in value during fiscal 2005 and 2006 and ended at an exchange rate of Rs.43.62 = US$1.00 on March31, 2005 and Rs.44.48 = US$1.00 on March 31, 2006, respectively. During fiscal 2007, the rupee once againappreciated against the US dollar, ending at an exchange rate of Rs.43.10 = US$1.00 on March 30, 2007, the lastbusiness day of fiscal 2007. The value of the rupee against the US dollar was Rs.40.36 = US$1.00 as of July 6,2007.

Holders of ADSs may be restricted in their ability to exercise pre-emptive rights under Indian law and therebymay suffer future dilution of their ownership position.

Under the Indian Companies Act 1956, a company incorporated in India must offer its holders of equity sharespre-emptive rights to subscribe and pay for a proportionate number of shares to maintain their existing ownershippercentages prior to the issuance of any new equity shares, unless the pre-emptive rights have been waived byadopting a special resolution passed by 75% of the shareholders present and voting at a general meeting.

U.S. owners of ADSs may not be able to exercise preemptive rights for equity shares underlying the ADSsunless a registration statement under the U.S. Securities Act of 1933, as amended, is effective with respect to therights or an exemption from the registration requirements of the Securities Act is available. Our decision to file aregistration statement will depend on the costs and potential liabilities associated with any given registrationstatement as well as the perceived benefits of enabling the owners of our ADSs to exercise their preemptiverights and any other factors that we deem appropriate to consider at the time the decision must be made. We mayelect not to file a registration statement related to pre-emptive rights otherwise available by law to ourshareholders, and there may not be an available exemption from those registration requirements that wouldenable U.S. owners of ADSs to otherwise participate. In the case of future issuances subject to pre-emptiverights, the new securities may be issued to the Depositary, which may sell the securities for the benefit of theowners of ADSs. The value, if any, the Depositary would receive upon the sale of those securities cannot bepredicted. To the extent that owners of ADSs are unable to exercise pre-emptive rights granted in respect of theequity shares represented by their ADSs, their proportional interests in us would be reduced.

Future issuances or sales of the Shares may significantly affect the trading price of the CARS™, the Shares orthe ADSs and may dilute your holdings.

Any future issuance of Shares could adversely affect the market price of the Shares. In addition, the futureissuance of Shares by us or the disposal of Shares by any of our major shareholders or the perception that such

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issuance or sales may occur may significantly affect the trading price of the CARS™, the Shares, the QSs and theADSs. We have, subject to certain exceptions, agreed to certain restrictions on issuances of Shares or securitiesconvertible, exchangeable or exercisable for Shares until 90 days after the date of this Offering Memorandum.See “Plan of Distribution”. Except for such restrictions, there is no restriction on our ability to issue Shares, andthere can be no assurance that we will not issue Shares.

Holders of ADSs have fewer rights than shareholders and must act through the Depositary to exercise thoserights.

Although holders of ADSs have a right to receive any dividends declared in respect of Shares underlying theADSs, they cannot exercise voting or other direct rights as a shareholder with respect to the Shares underlyingthe ADSs evidenced by ADRs. Citibank, N.A., as depositary is the registered shareholder of the deposited sharesunderlying our ADSs, and therefore only the Depositary can exercise the rights of shareholders in connectionwith the deposited shares. Only if requested by us, the Depositary will notify holders of ADSs of upcoming votesand arrange to deliver our voting materials to holders of ADSs. The Depositary will try, insofar as practicable,subject to Indian laws and the provisions of our Articles of Association, to vote or have its agents vote thedeposited securities as instructed by the holders of ADSs. If voting instructions are received timely by theDepositary from a holder of ADSs which fail to specify the manner in which the Depositary is to vote the sharesunderlying such holder’s ADSs, such holder will be deemed to have instructed the Depositary to vote in favor ofthe items set forth in such voting instructions. If the Depositary has not received timely instructions from a holderof ADSs, the holder shall be deemed to have instructed the Depositary to give a discretionary proxy to a persondesignated by us, subject to the conditions set forth in the deposit agreement. If requested by us, the Depositary isrequired to represent all shares underlying ADSs, regardless whether timely instructions have been received fromthe holders of such ADSs, for the sole purpose of establishing a quorum at a meeting of shareholders.Additionally, in your capacity as an ADS holder, you will not be able to bring a derivative action, examine ouraccounting books and records, or exercise appraisal rights. Registered holders of our shares withdrawn from thedepositary arrangements will be entitled to vote and exercise other direct shareholder rights in accordance withIndian law. However, a holder may not know about a meeting sufficiently in advance to withdraw the underlyingshares in time. Furthermore, a holder of ADSs may not receive voting materials, if we do not instruct theDepositary to distribute such materials, or may not receive such voting materials in time to instruct theDepositary to vote. See “Description of the Shares — Voting Rights” and “— Transfer of Shares”, “Descriptionof the American Depositary Shares — Voting Rights” and “Indian Securities Market — Takeover Code”.

There are currently no QSs outstanding and there is no market for the QSs, and any market which maydevelop for QSs may not be liquid.

There are currently no QSs outstanding. Following the commencement of the Conversion Period onOctober 11, 2011, Holders will have the right to convert CARS™ into QSs if there has been a Qualifying Issue.To constitute a Qualifying Issue of QSs, among other things, a minimum number of QSs will have been issued asprovided in the definition of “Qualifying Issue”. Notwithstanding this, there may not be liquid trading market forQSs which may make it difficult for investors to sell QSs at an acceptable price, or at all. If an active tradingmarket for the QSs were to develop, the QSs could trade at prices that may be lower than their price immediatelyfollowing conversion of the CARS™. Whether or not the QSs will trade at lower prices to the QSs on conversiondepends on many factors, including:

• the Company’s financial condition, financial performance and future prospects;

• the general economic and political conditions and the condition of the industry in which the Companyoperates; and

• the prevailing market for similar securities, principally the existing voting Shares and/or ADSs.

In addition, while application may be made to list the QSs (upon issue of any QSs) on the London StockExchange, the Luxembourg Stock Exchange, the SGX-ST, the Tokyo Stock Exchange or any other exchange thatmay be approved by an Independent Financial Institution, no assurance can be made that such a listing oradmission will be obtained.

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Holders of QSs will have no or differential voting rights (in comparison to the existing Shares).

If QSs are in the form of depositary receipts issued in respect of Shares on terms similar to those applying tothe ADSs, Holders will have no or differential voting rights (in comparison to the existing Shares) and have noright to withdraw the underlying Shares from the relevant depositary facility except upon certain conditions.

If QSs are in the form of non- or differential- voting equity shares issued by us or depositary receipts inrespect of such non- or differential- voting shares, Holders will have differential rights as to voting (incomparison to the existing Shares).

See “Description of the CARS™”.

As a result of Indian Government regulation of foreign ownership the price of the ADSs could decline.

Foreign ownership of Indian securities is regulated and is partially restricted. In addition, there arerestrictions on the deposit of Shares into our ADS facilities. ADSs issued by companies in certain emergingmarkets, including India, may trade at discount to the underlying equity shares, in part because of the restrictionson foreign ownership of the underlying equity shares and in part because ADSs are sometimes perceived to offerless liquidity than underlying shares which can be traded freely in local markets by both local and internationalinvestors. See “Foreign Investment and Exchange Controls”. ADSs could trade at a discount to the market priceof the underlying Shares.

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MARKET PRICE INFORMATION

Our Shares are listed on the Stock Exchange, Mumbai, which is also referred to as the Bombay StockExchange, Mumbai or the BSE, and the National Stock Exchange of India, or NSE. They are also listed andtraded on one other Indian stock exchange, namely the Madhya Pradesh stock exchange, from which we haveapplied for delisting. Our Shares have been listed on the BSE since 1959 and on the NSE since 1998.

Our outstanding ADSs have been listed on the New York Stock Exchange since September 27, 2004.

The table below sets forth, for the periods indicated, (i) the high and low closing prices and the averagevolume of trading activity on the BSE for our Shares and (ii) the high and low closing prices of the ouroutstanding ADSs on the New York Stock Exchange. On July 6, 2007, the closing price of our Shares on theBSE was Rs. 710.60 per Share and the closing price of our ADSs on the New York Stock Exchange wasUS$17.59 per ADS.

ClosingPrice per Share

Average DailyTrading Volume of

Shares on BSEClosing Price per

Existing ADSs

(in thousands of shares)PeriodHigh

PeriodLow

PeriodHigh

PeriodLow

(Rs. per Share) (US$ per ADSs)1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320.75 93.55 1,600.71 — —1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 316.50 129.50 2,063.34 — —2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258.30 68.65 898.54 — —2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112.15 58.85 1,083.04 — —2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169.85 99.55 750.45 — —

First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146.66 99.55 815.15 — —Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157.00 119.35 802.56 — —Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164.65 123.95 653.82 — —Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169.85 129.15 731.37 — —

2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452.30 150.20 594.26 — —First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167.20 150.50 513.89 — —Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202.45 150.20 558.50 — —Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 307.35 199.95 1,155.41 — —Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 452.30 312.90 2,606.97 — —

2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563.25 366.55 2053.27 11.92 8.73First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563.25 316.80 2728.26 — —Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 524.75 366.55 2098.56 — —Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435.85 372.95 2341.17 9.15 8.75Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 512.10 392.60 1050.03 11.92 8.73

2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 659.50 406.20 681.30 14.27 9.25First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 520.10 407.85 879.91 12.06 9.40Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449.25 406.20 532.24 10.38 9.25Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 545.20 426.75 561.71 12.41 9.68Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 659.50 460.80 763.68 14.27 10.44

2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 985.35 617.45 555.79 21.96 13.93First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 939.00 617.45 772.76 21.46 13.93Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 985.35 659.90 620.93 21.96 14.91Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 898.00 658.05 473.04 19.50 14.27Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 911.75 802.20 361.52 20.83 17.92

2007First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 964.55 715.10 303.60 22.10 16.21Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 766.90 641.35 360.06 19.09 15.94Third Quarter (through July 6) . . . . . . . . . . . . . . . . . . . . 710.60 684.05 199.71 17.59 16.64

Source: Bloomberg

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EXCHANGE RATES AND EXCHANGE CONTROLS

The following table sets forth, for the periods indicated, information with respect to the exchange ratebetween the rupee and the US dollar (in rupees per US dollar) based on the noon buying rate for cable transfersas certified for customs purposes by the Federal Reserve Bank of New York. On an average annual basis, therupee consistently declined against the US dollar from 1980 until 2002. In early July 1991, the IndianGovernment adjusted the rupee downward by an aggregate of approximately 20% against the US dollar as part ofan economic package designed to overcome an external payment crisis. In 1994, the rupee was permitted to floatfully for the first time. The exchange rate as of July 6, 2007 was Rs. 40.36 = US$1.00. No representation is madethat the rupee amounts actually represent such US dollar amounts or could have been or could be converted intoUS dollars at the rates indicated, any other rate or at all.

Year Period End Period Average High Low

2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.00 48.63 49.07 47.962003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.55 46.59 48.10 45.292004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.27 45.26 46.45 43.272005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.95 44.00 46.26 43.052006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.11 45.17 46.83 43.892007

January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.07 44.21 44.49 44.07February . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.08 44.02 44.21 43.87March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.10 43.79 44.43 42.78April . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.04 42.02 43.05 40.56May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.36 40.57 41.04 40.14June . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.58 40.59 40.90 40.27July (through July 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.36 40.38 40.42 40.34

Source: Federal Reserve Bank of New York

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USE OF PROCEEDS

The net proceeds from this offering, after deduction of underwriting fees, discounts and commissions, butbefore deduction of other expenses associated with this offering, are estimated to be approximately US$486.3million, which we intend to use for capital expenditures, overseas investments, acquisitions and other purposes,as may be permitted under Indian law.

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NON-CONSOLIDATED CAPITALIZATION

The following table sets forth our non-consolidated capitalization and short-term debt as of March 31, 2007,as adjusted to give effect to the issuance of the CARS™ in the aggregate principal amount of US$490,000,000(including US$40,000,000 aggregate principal amount to be issued in connection with the exercise in full of theover-allotment option described elsewhere in this Offering Memorandum). This table should be read inconjunction with our non-consolidated financial statements, the related notes and the other financial informationcontained elsewhere in this Offering Memorandum.

As at March 31, 2007

Actual As Adjusted

Rs. US$(7) Rs. US$(7)

(amounts in millions)

Short-Term Debt(1)

Total short-term debt (including current portion of long-termdebt) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,942.5 389.6 16,942.5 389.6

Long-Term Debt(1)

Secured and guaranteed debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —Secured and unguaranteed debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,502.0 126.5 5,502.0 126.5Unsecured and unguaranteed debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,646.9 405.8 38,957.0 895.8Unsecured and guaranteed debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —

Total long-term debt(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,148.9 532.3 44,459.0 1,022.3

Shareholders’ FundsTotal share capital:

Ordinary shares, par value Rs.10; 450,000,000 shares authorized,385,373,885 shares subscribed and outstanding(2)(3) . . . . . . . . . . . . 3,854.1 88.6 3,854.1 88.6

Securities premium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,364.0 445.2 19,364.0 445.2Distributable Reserves(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,485.0 1,022.9 44,485.0 1,022.9Undistributable Reserves(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 994.4 22.9 994.4 22.9

Total shareholders’ funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68,697.5 1,579.6 68,697.5 1,579.6

Total capitalization(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91,846.4 2,111.9 113,156.5 2,601.9

(1) Short-term debt and long-term debt consist of loan funds as disclosed in our audited non-consolidated condensed financial statementsincluded elsewhere in this Offering Memorandum.

(2) Net of Rs.0.1 million calls in arrears. Includes Rs.0.5 million share forfeiture amounts.(3) Does not include 21,750,195 ordinary shares issuable upon conversion of convertible notes as at March 31, 2007. As at June 30, 2007,

385,381,536 ordinary shares were issued, subscribed, fully paid-up and outstanding.(4) Distributable reserves comprise Rs.3,182.4 million of Debenture Redemption Reserve, Rs.31,164.3 million of General Reserve and

Rs.10,138.3 million in the Profit and Loss Account.(5) Undistributable Reserves comprise Rs.22.8 million of capital redemption reserve, Rs.0.5 million of amalgamation reserve, Rs.550.5

million of special reserve Rs.259.5 million of revaluation reserve and Rs 161.06 million of Debenture redemption reserve, which will beavailable for distribution only after the redemption of debentures to which it relates.

(6) Total capitalization consists of total long-term debt and total shareholders’ funds.(7) Translation from rupees to US dollars have been made on the basis of an exchange rate of Rs. 43.49 = US$1.00, the closing rate as at

March 30, 2007.

Other than the changes described above, there have been no material changes to our long-term debt sinceMarch 31, 2007 until the date of this Offering Memorandum.

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SELECTED REFORMATTED CONSOLIDATEDHISTORICAL FINANCIAL AND OTHER INFORMATION

The following selected data should be read in conjunction with our audited consolidated financial statementsand schedules thereto included elsewhere in this Offering Memorandum. The selected income statement data andbalance sheet data set forth below have been extracted and/or derived from our consolidated financial statementsand schedules thereto for each year in the three-year period ended March 31, 2007 and as at March 31, 2005,2006 and 2007, which have been prepared in accordance with Indian GAAP.

Solely for the convenience of the reader, the selected data set forth below are presented in a different formatfrom our audited consolidated financial statements. This reformatting generally involves changes in thedescription or classification of certain amounts from those shown in our audited consolidated financialstatements, which are summarized in the footnotes set forth below. Neither the information set forth below northe format in which it is presented should be viewed as comparable to information prepared in accordance withIndian GAAP or other accounting principles.

For the Year Ended March 31,(1)

2005 2006 2007 2007

(in Rs. millions) (in US$ millions)

Income Statement DataNet Revenue(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196,950.9 240,129.7 325,795.9 7,494.7Expenditure:

Raw Materials and Components(3) . . . . . . . . . . . . . . . . . . . . 137,912.3 166,333.4 228,529.1 5,257.1Salaries and Related Costs(4) . . . . . . . . . . . . . . . . . . . . . . . . . 14,339.8 17,831.2 24,155.3 555.7Expenses for Manufacturing, Administration and

Selling(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,155.4 28,899.5 41,158.0 946.9Excise Duty on Stock-in-trade . . . . . . . . . . . . . . . . . . . . . . . 128.9 330.0 775.0 17.8Changes in Stock in Trade and Work in Progress . . . . . . . . . (2,176.5) (2,386.5) (4,112.6) (94.6)Expenditure Transferred to Capital and Other

Accounts(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,673.8) (3,795.8) (7,399.1) (170.2)

170,686.1 207,211.8 283,105.7 6,512.7Profit Before Amortization, Depreciation, Interest,

Exceptional Items and Tax . . . . . . . . . . . . . . . . . . . . . . . . . . 26,264.8 32,917.9 42,690.2 982.0Product development expenditure . . . . . . . . . . . . . . . . . . . . . . . 671.2 717.7 850.2 19.6Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,310.1 6,233.1 6,880.9 158.3Interest (Net)(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,696.6 2,460.1 4,058.1 93.4Amortization of Miscellaneous expenditure in Subsidiaries . . 29.3 0.2 5.2 0.1

Profit for the Year Before Exceptional Items and Tax . . . . . . . 18,557.6 23,506.8 30,895.8 710.6Exceptional Items(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (76.7) (17.0) (14.4) (0.4)

Profit Before Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,480.9 23,489.8 30,881.4 710.2Tax Expense(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,906.2) (6,400.0) (8,832.1) (203.2)

Net Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,574.7 17,089.8 22,049.3 507.0Adjustment of Miscellaneous Expenditure in Subsidiaries . . . (37.8) (25.3) (1.4) *Share of Minority Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (84.8) (222.9) (742.2) (17.1)Share of Profit in respect of Investments in Associate

Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401.3 439.3 394.2 9.1

Profit for the Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,853.4 17,280.9 21,699.9 499.0

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As at March 31,(1)

2005 2006 2007 2007

(in Rs. millions) (in US$ millions)

Balance Sheet DataCurrent Assets:

Cash and Bank balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,973.2 13,864.4 11,542.7 265.5Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,620.4 24,810.4 31,669.0 728.5Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,414.0 13,544.8 17,022.2 391.6Loans and Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,472.7 58,284.0 97,828.3 2,250.5Interest Accrued on investments . . . . . . . . . . . . . . . . . . . . . 61.3 64.9 62.7 1.4

Total Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,541.6 110,568.5 158,124.9 3,637.5Current Liabilities and Provisions . . . . . . . . . . . . . . . . . . . . . . (70,411.7) (78,190.7) (88,654.0) (2,039.3)

Net Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,129.9 32,377.8 69,470.9 1,598.2Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,263.6 12,615.0 11,745.9 270.2Fixed Assets:

Gross Fixed Assets(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,416.2 102,794.9 129,408.3 2,977.0Less Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . 37,593.3 48,435.6 54,266.5 1,248.4

Net Fixed Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,822.9 54,359.3 75,141.8 1,728.6Goodwill (on consolidation) . . . . . . . . . . . . . . . . . . . . . . . . . . 516.2 4,122.1 4,430.1 101.9Miscellaneous Expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . 216.9 139.1 119.3 2.7

Total Assets (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,949.5 103,613.3 160,908.0 3,701.6

Loan Funds:Secured Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,767.0 8,816.2 44,626.5 1,026.5Unsecured Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,375.0 24,975.2 28,392.5 653.2

27,142.0 33,791.4 73,019.0 1,679.7Deferred Tax Liability (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . 6,205.4 6,767.9 8,172.7 188.1Minority Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 630.5 1,739.3 2,499.6 57.5Shareholders’ Funds:

Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,617.9 3,828.7 3,854.1 88.7Reserves and Surplus(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,353.7 57,486.0 73,362.6 1,687.6

Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43,971.6 61,314.7 77,216.7 1,776.3

Total Funds Employed . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,949.5 103,613.3 160,908.0 3,701.6

As at or for the Year Ended March 31,

2005 2006 2007 2007

Other DataAdjusted EBITDA (in Rs. millions/US$ millions)(11) . . . . . . . 24,254.2 29,765.0 40,308.2 927.2Adjusted EBITDA/Net revenues less other income (%)(12) . . . 12.4 12.5 12.4 12.4Adjusted EBITDA/Gross Interest(x)(13) . . . . . . . . . . . . . . . . . . 10.1 9.5 8.3 8.3Earnings Per Share(14)

Basic (Rs./US$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.50 45.86 56.43 1.30Diluted (Rs./US$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.07 43.15 53.54 1.23

Total debt/Adjusted EBITDA(x) . . . . . . . . . . . . . . . . . . . . . . . 1.12 1.14 1.81 1.81Net debt/Total Capital(x)(15) . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.09 0.22 0.42 0.42

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(1) During the periods referred to above, the following significant changes were made in the accounting policies:(a) During fiscal 2005, premium payable on redemption of FCCN has been fully provided considering Accounting Standard — AS 29

“Provisions, Contingent Liabilities and Contingent Assets”, which was issued by the Institute of Chartered Accountants of India andbecame applicable in fiscal 2005, and has been debited to Securities Premium Account (SPA) as compared to our past practice ofproviding premium on a pro-rata basis and debiting to SPA. As a result, the debit to SPA increased by Rs. 2,530.9 million. SPAforms part of Shareholders’ Funds and is included under Reserves and Surplus.

(b) Consequent to the revision of Accounting Standard — AS 15 “Employee Benefits”, which the Company adopted effective April 1,2006, an amount of Rs. 113.0 million (net of tax Rs. 57.3 million) has been adjusted to General Reserve in fiscal 2007 for differenceas per revised AS 15. Refer to Note B (2) (a) of Schedule 14 on page F-82.

(2) Net Revenue comprises Sale of Products and Other Income from operations as shown in Schedule A to the Profit and Loss Account,which is included in our audited consolidated financial statements included elsewhere in this Offering Memorandum, as reduced byexcise duty amounting to Rs.45,614.1 million Rs. 34,942.8 million and Rs.31,435.1 million for fiscal 2007, 2006 and 2005, respectively.

(3) Raw Materials and Components comprises the following items:(a) Purchase of Products for Sale, etc., of Rs. 19,114.9 million, Rs. 13,607.0 million and Rs. 8,624.8 million for fiscal 2007, 2006 and

2005, respectively.(b) Consumption of Raw Materials and Components of Rs. 204,611.0 million, Rs. 148,979.2 million and Rs. 126,267.8 million for

fiscal 2007, 2006 and 2005, respectively.(c) Processing Charges of Rs.4,803.2 million, Rs. 3,747.2 million and Rs. 3,019.7 million for fiscal 2007, 2006 and 2005, respectively.Refer to page F-55 of our audited consolidated financial statements included elsewhere in this Offering Memorandum.

(4) Salaries and Related Costs comprises the following items:(a) Salaries, Wages and Bonus of Rs. 19,480.6 million, Rs. 14,311.2 million and Rs. 11,176.2 million for fiscal 2007, 2006 and 2005,

respectively.(b) Contribution to Provident and other Funds, etc. of Rs. 2,606.9 million, Rs. 1,958.9 million and Rs. 1,663.5 million for fiscal 2007,

2006 and 2005, respectively.(c) Workmen and Staff Welfare Expenses of Rs. 2,067.8 million, Rs. 1,561.1 million and Rs. 1,500.1 million for fiscal 2007, 2006 and

2005, respectively.Refer to page F-55 of our audited consolidated financial statements included elsewhere in this Offering Memorandum.

(5) For details of Expenses for Manufacturing, Administration and Selling expenses refer page F-55 of our audited consolidated financialstatements included elsewhere in this Offering Memorandum.

(6) Consists mainly of deferred revenue expenditure on account of research and development related to development of new products andexpenditure on internally manufactured machines and production devices.

(7) Net Interest expense is comprised of interest increased by discounting charges paid and as reduced by interest transferred to capitalaccount and interest received on bank and other accounts as set forth in Schedule 14 (Note B-1) on page F-81 of our audited consolidatedfinancial statements included elsewhere in this Offering Memorandum.

(8) Exceptional Items:(a) The exceptional charge of Rs. 14.4 millions in the fiscal 2007 comprises of employee separation cost of Rs. 2.6 millions and

Rs. 11.8 millions towards provision for diminution in value of investment.(b) The exceptional charge of Rs. 17.0 millions in the fiscal 2006 pertains to provision for diminution in value of investment.(c) The exceptional charge of Rs. 76.7 millions in the fiscal 2005 comprises of employee separation cost of Rs. 36.7 millions and

Rs. 40.0 millions towards provision for diminution in value of investment.(9) Tax Expense excludes dividend distribution tax.(10) Gross Fixed Assets include Capital Work in Progress of Rs. 25,816.5 million, Rs. 9,744.9 million and Rs. 5,409.9 million for fiscal 2007,

2006 and 2005, respectively.(11) Adjusted EBITDA is Profit before Amortization, Depreciation, Interest, Exceptional Items and Tax as reduced by product development

expenditure of Rs. 850.2 million, Rs. 717.7 million and Rs. 671.2 million and Dividend/Other Income of Rs. 1,531.8 million,Rs. 2,435.2 million and Rs. 1,339.4 million for fiscal 2007, 2006 and 2005, respectively, as set forth in Schedule A to the Profit and LossAccount included in our audited consolidated financial statements included elsewhere in this Offering Memorandum.

(12) Calculated as Adjusted EBITDA divided by Net Revenue less Dividend/Other Income as detailed in Schedule A to our auditedconsolidated financial statements included elsewhere in this Offering Memorandum.

(13) Calculated as Adjusted EBITDA divided by gross interest expenses. Gross interest expenses is interest as increased by discountingcharges paid as set forth on Schedule 14 (Note B-1) on page F-81 of our audited consolidated financial statements included elsewhere inthis Offering Memorandum.

(14) Refer to Schedule 14 (Note B-3) on page F-87 of our audited consolidated financial statements included elsewhere in this OfferingMemorandum.

(15) Net debt has been computed by subtracting cash and bank balance from Total Debt. Total capital is total funds employed withoutconsidering deferred tax liability (net) and after deducting minority interest, Goodwill on consolidation and Miscellaneous Expenditure.

(16) The financial results for the year ended March 31, 2006 include the results of the operations of erstwhile Tata Finance Limited (TFL) forthe period April 1, 2005 to March 31, 2006, of INCAT International Plc. (INCAT) for the period October 3, 2005 to March 31, 2006, ofTata Technologies (Thailand) Limited (TTL Thailand) for the period October 10, 2005 to March 31, 2006, and of Tata Technologies Pte.Limited, Singapore (TTPL Singapore) for the period December 7, 2005 to March 31, 2006. The comparative figures for the year endedMarch 31, 2007 include the results of the operations of each of TFL, INCAT, TTL Thailand and TTPL Singapore for the entire year. Asa result, the financial results for the years ended March 31, 2007, March 31, 2006, and March 31, 2005 are not comparable to this extent.

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SELECTED REFORMATTED NON-CONSOLIDATEDHISTORICAL FINANCIAL AND OTHER INFORMATION

The following selected data should be read in conjunction with our audited non-consolidated financialstatements and schedules thereto included elsewhere in this Offering Memorandum. The selected incomestatement data and balance sheet data set forth below for each year in the three-year period ended March 31,2007 and as at March 31, 2005, 2006 and 2007 have been extracted and/or derived from our non-consolidatedfinancial statements and schedules thereto, which have been prepared in accordance with Indian GAAP.

Solely for the convenience of the reader, the selected data set forth below are presented in a different formatfrom our audited non-consolidated financial statements for the three years ended March 31, 2007. Thisreformatting generally involves changes in the description or classification of certain amounts from those shownin our audited non-consolidated financial statements, which are summarized in the footnotes set forth below.Neither the information set forth below nor the format in which it is presented should be viewed as comparable toinformation prepared in accordance with Indian GAAP or other accounting principles.

For the Year Ended March 31,(1)

2005 2006 2007 2007

(in Rs. millions)(in U.S.$millions)

Income Statement DataNet Revenue(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176,091.1 209,425.7 277,804.3 6,390.7Expenditure

Raw Materials and Components(3) . . . . . . . . . . . . . . . . . . . . . . . 124,851.4 148,895.6 201,987.2 4,646.6Salaries and Related Costs(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,433.8 11,471.7 13,678.3 314.6Expenses for Manufacturing, Administration and Selling(5) . . . 21,011.7 25,746.6 35,057.1 806.4Excise Duty on Stock-in-trade . . . . . . . . . . . . . . . . . . . . . . . . . . 84.1 321.8 759.9 17.5Changes in Stock in Trade and Work in Progress . . . . . . . . . . . (1,440.0) (2,569.1) (3,496.8) (80.3)Expenditure Transferred to Capital and Other Accounts(6) . . . . (2,181.3) (3,088.5) (5,770.5) (132.7)

152,759.7 180,778.1 242,215.2 5,572.1Profit Before Depreciation, Interest, Exceptional Items and

Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,331.4 28,647.6 35,589.1 818.6Product Development Expenditure . . . . . . . . . . . . . . . . . . . . . . . 671.2 737.8 850.2 19.5Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,501.6 5,209.4 5,862.9 134.8Interest (Net)(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,541.5 2,263.5 3,130.7 72.0

Profit for the Year Before Exceptional Items and Tax . . . . . . . 16,617.1 20,436.9 25,745.3 592.3Exceptional Items(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (98.1) 96.9 (13.5) (0.4)

Profit Before Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,519.0 20,533.8 25,731.8 591.9Tax Expense(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,149.5) (5,245.0) (6,597.2) (151.8)

Net Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,369.5 15,288.8 19,134.6 440.1

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As at March 31,(1)

2005 2006 2007 2007

(in Rs. millions)(in U.S.$millions)

Balance Sheet DataCurrent Assets:

Cash and bank balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,050.4 11,194.3 8,267.6 190.2Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,013.6 20,122.4 25,009.5 575.3Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,985.8 7,166.0 7,821.8 179.9Loans and Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,492.6 56,333.8 60,259.9 1,386.3Interest accrued on investments . . . . . . . . . . . . . . . . . . . . . . . . . 61.2 61.6 59.4 1.4

Total Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69,603.6 94,878.1 101,418.2 2,333.1Current Liabilities and Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . (64,150.0) (69,418.6) (73,577.7) (1,692.6)

Net Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,453.6 25,459.5 27,840.5 640.5Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,120.6 20,151.5 24,770.0 570.0Fixed Assets

Gross Fixed Assets(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,507.9 89,227.4 112,891.2 2,596.9Less Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . 34,542.8 44,015.1 48,945.4 1,126.0

Net Fixed Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,965.1 45,212.3 63,945.8 1,470.9Miscellaneous Expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181.6 141.2 100.9 2.3

Total Assets (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,720.9 90,964.5 116,657.2 2,683.7

Loan Funds:Secured Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,898.1 8,227.6 20,220.4 465.2Unsecured Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,056.1 21,140.8 19,871.0 457.1

24,954.2 29,368.4 40,091.4 922.3Deferred Tax Liability (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,652.8 6,225.4 7,868.3 181.0Shareholders’ Funds:

Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,617.9 3,828.7 3,854.1 88.7Reserves and Surplus(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,496.0 51,542.0 64,843.4 1,491.7

Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,113.9 55,370.7 68,697.5 1,580.4

Total Funds Employed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,720.9 90,964.5 116,657.2 2,683.7

As at or for the Year Ended March 31,

2005 2006 2007 2007

Other DataAdjusted EBITDA (in Rs. millions/US$ millions)(11) . . . . . . . . . . . 20,999.3 25,019.0 32,287.0 742.7Adjusted EBITDA/Net revenue less other income (%)(12) . . . . . . . 12.0 12.1 11.7 11.7Adjusted EBITDA/Gross Interest (x)(13) . . . . . . . . . . . . . . . . . . . . . 9.5 8.4 8.3 8.3Earnings Per Share(14)

Basic (Rs./US$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.38 40.57 49.76 1.14Diluted (Rs./US$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.23 38.20 47.24 1.09

Total debt/Adjusted EBITDA(x) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.19 1.17 1.24 1.24Net debt/Total Capital(x)(15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.07 0.21 0.29 0.29

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(1) During the periods referred to above, the following significant changes were made in accounting policies :(a) During fiscal 2005, premium payable on redemption of FCCN has been fully provided considering Accounting Standard — AS 29

“Provisions, Contingent Liabilities and Contingent Assets”, which was issued by the Institute of Chartered Accountants of India andbecame applicable in fiscal 2005, and has been debited to Securities Premium Account (SPA) as compared to our past practice ofproviding premium on a pro-rata basis and debiting to SPA. As a result, the debit to SPA increased by Rs. 2,530.9 million. SPAforms part of Shareholders’ Funds and is included under Reserves and Surplus.

(b) Consequent to the revision of Accounting Standard — AS 15 “Employee Benefits”, which the Company adopted effective April 1,2006, an amount of Rs. 141.9 million (net of tax Rs. 72.1 million) has been adjusted to General Reserve in fiscal 2007 for differenceas per revised AS 15. Refer to Note B (5) of Schedule 14 on page F-35.

(2) Net Revenue comprises Sale of Products, Other Income from operations and Dividend and other income as shown in schedule A to theProfit and Loss Account, which is included in the Company’s audited non-consolidated financial statements included elsewhere in thisOffering Memorandum, as reduced by the excise duty amounting Rs.43,494.5 millions, Rs. 33,479.5 millions and Rs.30,359.8 millionsfor fiscal 2007, 2006 and 2005, respectively.

(3) Raw Materials and Components comprises the following items:(a) Purchase of Products for Sale, etc., of Rs. 14,592.0 millions, Rs. 9,987.4 millions and Rs. 6,692.3 millions for fiscal 2007, 2006 and

2005, respectively.(b) Consumption of Raw Materials and Components of Rs. 179,157.3 millions, Rs.132,651.2 millions and Rs. 112,602.5 millions for

fiscal 2007, 2006 and 2005, respectively.(c) Processing Charges of Rs. 8,237.9 millions, Rs. 6,257.0 millions, and Rs. 5,556.6 millions for fiscal 2007, 2006 and 2005

respectively.Refer page F-7 of the Company’s audited non-consolidated financial statements included elsewhere in this Offering Memorandum.

(4) Salaries and Related Costs comprises the following items:(a) Salaries, Wages and Bonus of Rs. 10,386.8 millions, Rs. 8,837.2 millions and Rs. 8,008.8 millions for fiscal 2007, 2006 and 2005,

respectively.(b) Contribution to Provident and other funds of Rs. 1,765.1 millions, Rs. 1,392.9 millions and Rs. 1,182.3 millions for fiscal 2007,

2006 and 2005, respectively.(c) Workmen and Staff Welfare Expenses of Rs. 1,526.4 millions, Rs. 1,241.6 millions and Rs. 1,242.7 millions for fiscal 2007, 2006

and 2005, respectively.Refer page F-7 of the Company’s audited non-consolidated financial statements included elsewhere in this Offering Memorandum.

(5) For details of Expenses for Manufacturing, Administration and Selling refer page F-7 of the Company’s audited non-consolidatedfinancial statements included elsewhere in this Offering Memorandum.

(6) Consists mainly of deferred revenue expenditure on account of research and development related to development of new products andexpenditure on internally manufactured machines and production devices.

(7) Net Interest expense is comprised of interest on debentures and fixed loans and other interest as reduced by interest transferred to capitalaccount and interest received on bank and other accounts and increased by discounting charges paid as set forth in Schedule -14 (NoteB-4) on page F-34 of the Company’s audited non-consolidated financial statements included elsewhere in this Offering Memorandum.

(8) Exceptional Items:(a) The exceptional charge of Rs. 13.5 millions in fiscal 2007 is comprised of provision for diminution in value of investments Rs. 10.9

millions and employee separation cost of Rs. 2.6 millions.(b) The exceptional gain in fiscal 2006 is comprised of write back of provision for diminution in value of investments (net) Rs. 96.9

millions made in earlier year.(c) The exceptional charge of Rs. 98.1 millions in fiscal 2005 is comprised of provision for diminution in value of investments (net)

Rs. 96.7 millions and employee separation cost of Rs. 1.4 millions.(9) Tax expense does not include dividend distribution tax.(10) Gross Fixed Assets include Capital Work in Progress Rs. 25,133.2 millions, Rs. 9,511.9 millions, Rs. 5,388.4 millions for fiscal 2007,

2006 and 2005, respectively.(11) Adjusted EBITDA is Profit before Depreciation, Interest, Exceptional items and Tax as reduced by Product Development Expenditure of

Rs. 850.2 millions, Rs. 737.8 millions and Rs. 671.2 millions for fiscal 2007, 2006 and 2005, respectively, Dividend and Other Income ofRs. 2,451.9 millions, Rs. 2,890.8 millions and Rs. 1,660.9 millions for fiscal 2007, 2006 and 2005, respectively as set forth in ScheduleA to the Profit and Loss Account on page F-6 of the Company’s audited non-consolidated financial statements included elsewhere in thisOffering Memorandum.

(12) Calculated as Adjusted EBITDA divided by Net Revenue less Dividend and Other Income as detailed in Schedule A to the Company’saudited non-consolidated financial statements included elsewhere in this Offering Memorandum.

(13) Calculated as Adjusted EBITDA divided by gross interest expenses. Gross interest expenses is interest on debentures and Fixed Loansplus other Interest and increased by discounting charges paid as set forth on Schedule 14 (Note B-4) on page F-34 of the Company’saudited non-consolidated financial statements included elsewhere in this Offering Memorandum.

(14) Refer to Schedule 14 (Note B-7) on Page F-38 of the Company’s audited non-consolidated financial statements included elsewhere inthis Offering Memorandum.

(15) Net debt has been computed by subtracting cash and bank balances from Total Debt. Total capital is total funds employed withoutconsidering deferred tax liability (net) and after deducting Miscellaneous Expenditure.

(16) The financial results for the years ended March 31, 2006 and March 31, 2007 include the results of the operations of erstwhile TataFinance Limited (TFL), Telco Dadajee Dhackjee Ltd (TDDL) and Suryodaya Capital Finance (Bombay) Ltd (SCFL). The comparativefigures for the year ended March 31, 2005 do not include the results of the operations of TFL, TDDL and SCFL. As a result, the financialresults for the years ended March 31, 2006 and March 31, 2007 are not comparable to this extent to the financial results for the yearended March 31, 2005.

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INDUSTRY AND REGULATION

The information presented in this section has been extracted from publicly available documents, includingmarket research reports and industry publications that have not been prepared or independently verified by us,either of the initial purchasers or any of our or its respective affiliates or advisors.

Industry

The Indian Economy

Real GDP grew by 9.4% in fiscal 2007 compared to 9% growth in fiscal 2006 according to the Center forMonitoring Indian Economy or CMIE (Monthly Review of Indian Economy — June 2007). The industrial sectorand services sectors grew by 10.9% and 11%, respectively, during fiscal 2007, compared to 9.6% and 9.8% infiscal 2006. Industrial growth was mainly driven by the manufacturing sector, which registered 12.3% growthduring fiscal 2007 as against 9.1% growth registered in fiscal 2006. The agricultural sector grew by 2.7% duringfiscal 2007, compared to 6% during fiscal 2005.

On a quarterly basis, GDP of the Indian economy grew 9.6% in the first quarter, 10.2% in the secondquarter, 8.7% in the third quarter and 9.1% in the last quarter of fiscal 2007 according to CMIE.

The Indian wholesale price index grew by 5.4% during fiscal 2007 against 4.4% growth recorded during theprevious fiscal year.

In an aggressive move to contain inflation within 5 to 5.5%, RBI increased the repo rate by 1.25% and CRRby 1.5% during 2007. Consequently, there was a substantial increase in interest rates in the economy.

Road Infrastructure

Driving conditions in India are generally rugged due to the poor quality of road infrastructure. This hashindered the expansion of the road transport sector and the automotive industry. The government is taking stepsto improve the road infrastructure in the country. The 5,846 kilometer Golden Quadrilateral, which is a part ofthe ongoing road development program in India, was 95% completed as of February 2007. A substantial impactof the road development on the economy is already noticeable. In addition to Phases I, II and III of the NationalHighway Development Programme (NHDP), the incumbent government has announced Phase IV of NHDP,which includes the expansion to two lanes of 41,000 kilometers of highways not covered under the first threeplans. The project commenced during fiscal 2006 and is targeted to be completed by fiscal 2015. Further roaddevelopment would make the benefits of faster movement of goods and people accessible to a larger portion ofthe Indian population.

The Indian Automotive Market

India’s 50-year old automotive industry has a prominent place in the Indian economy. With its integralrelationship to several key segments of the Indian economy, the Indian automobile industry affects many otherimportant sectors of the Indian economy and is one of the main drivers of India’s economic growth. The Indianauto industry is one of the largest industrial sectors in India, with a turnover that contributes to roughly 5% ofIndia’s gross domestic product. The Indian automobile industry contributes nearly 17% to total indirect taxes andprovides direct and indirect employment to over two million and ten million people respectively.

The Indian automotive industry plays a pivotal role in the country’s rapid economic and industrialdevelopment, with its wide variety of passenger and commercial vehicles. Until the mid-1990’s, the auto sectorin India had been a relatively protected industry with limits on the entry of foreign companies through importtariffs. Today, as part of a broader move to liberalize its economy, India has opened up the sector to foreign

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direct investments and has since progressively relaxed trade barriers. Since the liberalization of the Indian autosector the industry has experienced rapid development. Today, India is the world’s second largest manufacturerof two wheelers, fifth largest manufacturer of commercial vehicles and the largest manufacturer of tractors in theworld. India is also among a few countries in the world that have indigenously developed a passenger car.

The Society of Indian Automobile Manufacturers, or SIAM, currently represents 38 vehicle and vehicularengine manufacturers in India. India’s auto market is one of the most competitive markets amongst the globalmarkets, as lower overall costs have made it an attractive assembly ground for overseas manufacturers.

During fiscal 2007, the Indian automobile industry production grew by 13.6% to nearly 11 million vehicles.Of these, nearly 76% were two wheelers and over 5% were three wheelers. 1.5 million passenger vehicles, utilityvehicles and multi purpose vans were produced in fiscal 2007, representing 14% of vehicles produced. Inaddition, nearly 0.5 million commercial vehicles were manufactured, constituting 4.7% of total vehicleproduction. The International Organization of Motor Vehicle Manufacturers, or OICA, ranked India as 11th inpassenger cars production in 2005. Presently, car penetration in India is estimated to be low at 7 cars per 1,000persons and that is expected to increase in coming years.

During fiscal 2007, nearly 10 million automobiles were sold in India, an increase of 13.5% over theprevious fiscal year, and 1 million automobiles were exported from India, an increase of 25.4% over the previousfiscal year. The Indian automotive industry, after experiencing a slowdown in growth rate last year, bouncedback this year with a growth of 21.4% to post strong volumes in all segments. Rising input costs and retailincentives continued to put pressure on industry margins.

Domestic passenger vehicle sales reached an all-time high of nearly 1.38 million units during fiscal 2007,with a growth of about 20.7% after the modest growth rate of 7.7% in the previous fiscal year. The segment wasfavorably impacted by a reduction of the excise duty on small cars in the previous year’s union budget (from24% to 16% for cars of up to 4 meters in length and with engine displacement of less than 1200 c.c. for petroland 1500 c.c for diesel) and increased consumer spending. Total passenger car exports of over 198,000 unitswere also at an all-time high with a growth rate of 13% over the previous fiscal year.

Domestic commercial vehicle sales also reached an all-time high of over 0.46 million units during fiscal2007, with an impressive growth rate of 33% from the previous fiscal year, buoyed by increased industrialactivity and continued investment in road infrastructure. Inflationary concerns during the year have prompted anincrease in interest rates, which impacted commercial vehicles sales in the last few months of the current fiscalyear.

According to SIAM, Indian automotive manufactures sold, in the domestic and export markets,approximately 106,000 vehicles (M&HCVs, LCVs, UVs and passenter cars) in 1980. This tripled toapproximately 355,000 vehicles in the year ended March 31, 1991 and rose approximately fifteen fold toapproximately 1,576,000 vehicles in the year ended March 31, 2005. Since then, this number has risen toapproximately 1,710,000 vehicles in the year ended March 31, 2006 and approximately 2,095,800 vehicles forthe year ended March 31, 2007.

Regulation

Indian Automotive Sector

India’s automotive industry was established in the 1950s through various co-operation arrangements with,and direct investments by, a number of American and European automotive manufacturers. Prior to that, vehiclekits were imported into and assembled in India. The commercial vehicle manufacturing sector achieved a highrate of growth during India’s economic expansion in the 1960s and 1970s. Rail transport bottlenecks led tohigher demand for road transport and this sector was permitted to grow with the minimum intervention of the

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government. Major domestic commercial vehicle manufacturers invested in expanding production facilities andproduct development, which resulted in an efficient and relatively technologically advanced commercial vehicleindustry, albeit with restrictions on capacity expansions due to the licensing regime in operation at that time.

In the passenger car sector, two models produced by Hindustan Motors Limited and Premier AutomobilesLimited, respectively, dominated the market until the mid 1980s. Passenger cars were deemed to be luxuryproducts and were subject to very high multiple taxation and price controls. In addition, industrial licensing andexchange control regulations forced domestic car manufacturers to embark on low-volume, high-cost indigenousand in-house component production programs. Demand for passenger cars exceeded supply, but the domesticpassenger car industry remained protected by the prohibition on car imports and remained technologically behindglobal standards. However, the establishment of Maruti Udyog Limited, or Maruti, a joint venture between theSuzuki Motor Company of Japan and the Government of India in the mid-1980s paved the way for expansion ofthe automobile sector in India in terms of increase in supply and improvement in product quality and design.Maruti has since become the leading player in the Indian passenger car market. It was not until the IndianGovernment deregulated and liberalized the automotive market in the early 1990s that the country’s passengercar market showed substantial growth. Nonetheless, India continues to have a substantially lower number ofpassenger vehicles per capita than most developed countries and a number of developing countries.

Restrictive automotive vehicle import policies and high import duties on vehicles assembled from kits aswell as vehicle components have effectively protected domestic manufacturers from foreign competition.Although the Indian government has reduced import duties on vehicles and components in recent years, rates stillremain relatively high. See “— Import Regulations and Duties” below. Consequently, domestic manufacturershave historically dominated the automotive industry in India, although a number of domestic manufacturers havesought to improve product quality by entering into joint ventures, technology transfer agreements or licensingagreements with foreign vehicle and component manufacturers.

The industry has, historically, also been subject to high excise duty rates, and even today cars and UVs aresubject to the highest excise rates with the exception of small cars. See “— Excise Duty”. Fluctuations in thesetaxes directly impact retail sales prices and, consequently, the level of demand. Sales tax in various states hasbeen recently rationalized.

Unlike more developed countries, the automotive industry in India until the late 1980’s had not been subjectto stringent emission or vehicle safety regulations, but this trend is changing with Bharat Stage III (equivalent toEuro III) emissions norms now in force in major Indian cities. See “— Emission and Safety” below.

Due to the absence of any laws regarding the age of vehicles (except in the National Capital Region, orNCR, of Delhi and the State of Maharashtra), automotive (both commercial as well as passenger) vehicles inIndia are typically kept in use much longer than in more developed countries. Commercial vehicles are alsosubject to overload abuse.

Since 1980, India’s automotive industry has experienced rapid structural transformation and growth.Progressive easing of import controls, reduction in governmental restrictions on product categories and therationalization of excise duties (including the introduction of modified value added tax, or MODVAT, andcentral value added tax, or CENVAT, from fiscal 2001 and Value Added Tax (VAT) in 21 states from April 1,2005), together with increased foreign investment and technical assistance has helped create a wider range ofproducts and greater competition. The passenger vehicle market has experienced significant growth over the lastfew years with almost all foreign direct investment in the automobile industry directed to this market.

The global automotive industry has undergone radical change in recent times. There has been significantconsolidation, both amongst vehicle manufacturers and component vendors with a view to achieving economiesof scale, product synergies and strong brand presence. By contrast, there has been little or no consolidation ineither vehicle or component manufacturing in India. The sizes of domestic automotive manufacturers, especiallyfor passenger vehicles, are small compared to global standards. Consequently, economies of scale inmanufacturing have generally eluded Indian manufacturers of automotive vehicles and automotive components.

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The component industry, which until recently was to a large extent reserved for the small-scale sector, continuesto be fragmented, with a number of enterprises with limited funds and technology, though this situation hasimproved in recent years. The Indian automotive industry has, therefore, differed from the global model, but asentry barriers in India are lowered, we believe that both vehicle and component manufacturers are likely toconsolidate their operations to achieve the levels of competitiveness and scale economies closer to those in majorinternational markets. Globally known branded products, supported by high levels of promotional spending, arelikely to win a significant share of the domestic market for all vehicles, particularly passenger vehicles.

Emission and Safety

In 1992, the government of India issued emission and safety standards, which were further tightened inApril 1996 under the Indian Motor Vehicle Act. Currently Bharat Stage III norms (equivalent to Euro III norms)are in force for four wheelers in 11 cities in India and Bharat Stage II norms (equivalent to Euro II norms) are inforce in rest of India. Our vehicles comply with these norms. The next change in emission regulations is currentlyexpected to be implemented by fiscal 2010, when the 11 major cities currently subject to Bharat Stage III normsare expected to move to Bharat Stage IV norms (equivalent to Euro IV norms) and rest of India to Bharat StageIII norms.

Our vehicle exports to Europe comply with Euro IV norms, and we believe our vehicles also comply withthe various safety regulations in effect in the other international markets we operate in. We are also working onmeeting all the regulations which we believe are likely to come into force in various markets in future.

The Indian automobile industry is progressively harmonizing its safety regulations with Internationalstandards in order to facilitate sustained growth of the Indian automobile industry as well as to make India a largeexporter of automobiles.

India has a well established regulatory framework administered by the Indian Ministry of Shipping, RoadTransport and Highways. The ministry issues notifications under the Central Motor Vehicles Rules and theMotor Vehicles Act. Chapter V of the Central Motor Vehicles Rules, 1989 deals with construction, equipmentand maintenance of vehicles. Vehicles being manufactured in the country have to comply with relevant Indianstandards and automotive industry standards. The Indian Ministry of Shipping, Road Transport and Highwaysfinalized a road map on automobile safety standards in January 2002. The road map is based on current trafficconditions, traffic density, driving habits and road user behavior in India and is generally aimed at increasingsafety requirements for vehicles under consideration for Indian markets.

Excise Duty

In the Indian Union Budget for fiscal 2007, the Government of India has reduced the Excise duty on smallcars from 24% to 16%. Small cars are defined to mean cars of length not exceeding 4,000 mm and with an enginecapacity not exceeding 1,500 cc for cars with diesel engines and not exceeding 1,200 cc for cars with gasolineengines.

Value Added Tax

Value Added Tax (VAT) was implemented throughout India, with the exception of a few states, on April 1,2005. VAT enables set-off from sales tax paid on inputs by traders and manufacturers against the sales taxcollected by them on behalf of the government, thereby eliminating the cascading effect of taxation. Two mainbrackets of 4% and 12.5%, along with special brackets of 0%, 1% and 20%, have been announced for variouscategories of goods and commodities sold in the country. Central Sales Tax, however, continues to exist,although it is proposed to be abolished in a phased manner. Since its implementation, VAT has had a prositiveimpact on us.

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Import Regulations and Duties

Automobiles and automotive components can, generally, be imported into India without a license from theIndian government subject to their meeting Indian standards and regulations as specified by designated testingagencies. Recent government liberalization policies have led to a reduction in import duties on vehicles andcertain automotive parts.

Insurance Coverage

The Indian insurance industry is predominantly state-owned and insurance tariffs are regulated by the IndianInsurance Regulatory and Development Authority. We have insurance coverage that we consider reasonablysufficient to cover all normal risks associated with our operations and that we believe is in accordance withindustry standards in India. We have obtained Business Interruption (Loss of Profit) cover. We have alsoobtained coverage for product liability for some of our vehicle models in several countries to which we exportvehicles. Moreover, we have taken insurance coverage on directors and officers’ liability to minimize risksassociated with product liability and international litigation.

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BUSINESS

Our History

We were incorporated on September 1, 1945 as a public limited liability company under the IndianCompanies Act VII of 1913 as Tata Locomotive and Engineering Company Limited. Our name was changed toTata Engineering and Locomotive Company Limited on September 24, 1960 and to Tata Motors Limited onJuly 29, 2003. We commenced operations as a steam locomotive manufacturer. This business was discontinuedin 1971. Since 1954, we have been manufacturing automotive vehicles. This business commenced with themanufacture of commercial vehicles under financial and technical collaboration with Daimler-Benz AG (nowDaimlerChrysler AG) of Germany. This agreement ended in 1969. Since then, we have been developing andmanufacturing all our automotive vehicles in-house. We produced only commercial vehicles until 1991, when westarted producing passenger vehicles.

Our most significant achievement in this field has been the design and development of India’s first, andcurrently only, fully indigenous contemporary compact car, the Indica. The launch of the Indica in fiscal 1998and its upgraded V2 version in fiscal 2001 was followed by a second offering, the Indigo, in the mid-size carsegment in fiscal 2002 and its etate version in fiscal 2004.

We have the widest portfolio of automotive products among Indian automotive vehicle manufacturers,ranging from sub-1-ton to 40-ton GVW trucks (including pick-ups) and from small, medium, and large buses andcoaches to passenger cars and utility vehicles.

Our automotive operations inlcude the design, manufacture, assembly and sale of the above mentionedproducts, related parts and accessories and the financing business for our vehicles.

We have also expanded our international operations through mergers and acquisitions involving non-Indiancompanies. In 2004, we acquired the Daewoo Commercial Vehicles Company (now renamed as Tata DaewooCommercial Vehicle Company Limited), South Korea’s second largest truck maker. TDCV has launched severalnew products, such as the Tata Novus M&HCV. In fiscal 2005, we acquired a 21% stake in Hispano CarroceraS.A., or Hispano, a well known Spanish bus and coach manufacturer and we have an option to acquire theremaining stake. Hispano’s operations are being expanded into other markets. In addition, in June 2006, wesigned a memorandum of understanding with the Fiat group to establish an industrial joint venture in India tomanufacture passenger vehicles, engines and transmissions for the Indian and overseas markets; we have alsobeen distributing and marketing Fiat branded cars in India since March 2006. In May 2006, we entered into ajoint venture agreement with Brazil-based Marcopolo S.A., or Marcopolo, a global leader in building bodiesfor buses and coaches, to manufacture and assemble fully built buses and coaches in India, wherein we have a51% ownership with the balance held by Marcopolo. In December 2006, we entered into a 70:30 joint venturewith Thonburi Automotive Assembly Plant Co., Thailand, to manufacture pick-ups in Thailand. The joint venturewill facilitate our efforts to address the Thailand market, which is the second largest pick-up market in the world,and other potential markets in that region.

Sales and Distribution of Vehicles

Our sales and distribution network in India is comprised of over 1,200 sales outlets for our passenger andcommercial vehicles business. These are managed through our 8 regional offices, 24 area offices and 19 regionalsales offices. Most of our sales outlets are exclusive sales outlets. We have a presence at over 2,000 customertouch points in India, including after sales outlets. We are in the process of deploying a Siebel customer relationsmanagement system at all of our dealerships and offices across the country, which is one of the largestdeployments of that system in the Indian automotive sector. Being implemented in phases since 2003, the

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combined online Customer Relationship Management — Dealer Management initiative now supports over15,000 users, within the company and amongst its channel partners in India and abroad. We believe that this willgive us a significant advantage over our competitors.

We also provide financing services to our purchasers through our dealers, who act as our agents, andthrough our branch network. For fiscal 2006 and 2007, approximately 24% and 31%, respectively, of our vehiclesales volumes in India, were made through financing arrangements where our vehicles financing arms providedthe credit. Total consolidated vehicle finance receivables (including those of our subsidiaries) outstanding as atMarch 31, 2006 and 2007 amounted to Rs.46,607.6 million and Rs.81,545.1 million, respectively, of whichRs.1,325.6 million and Rs.1,809.4 million, respectively, were considered doubtful.

We use a network of service centers on highways and a toll-free customer assistance center to provide24-hour on-road maintenance (including replacement of parts) to vehicle owners. We believe that the reach ofour sales, service and maintenance network provides us with a significant advantage over our competitors.

Research and Development

Our research and development activities focus on product development, environmental technologies andvehicle safety through our Engineering Research Centre, or ERC, established in 1966, which is one of the fewgovernment recognized in-house automotive research and development centers in India.

One of the most significant achievements of ERC has been the design and development of our compact carthe Tata Indica, which is India’s only indigenously developed compact car. The ERC also designed our mid-sizecar the Tata Indigo, which was launched in 2002 and has been the market leader in the entry mid-size marketcategory in India.

We strengthened our position in the Indian commercial vehicle through the introduction of an improvedrange (EX series) of light, medium and heavy trucks and buses and India’s first Mini truck, the Tata Ace, whichwas developed in-house and was introduced in the Indian domestic market in 2005.

At present, we are working on developing a truck which we expect would open various internationalmarkets for us. Our acquisition of TDCV is expected to provide us significant advantage in its developmentprocess. On similar lines, in our passenger vehicle business, we are developing a low cost car for the Indianmarket. We believe that there will be significant demand for such a passenger vehicle.

In addition, our research and development activities also focus on developing vehicles running onalternative fuels, including CNG, liquefied petroleum gas, and bio-diesel. We currently have over 40 staff busesrunning on bio-diesel at one of our manufacturing plants. We are pursuing alternatives fuel options such asethanol blending for our products and development of vehicles fuelled by hydrogen and compressed air.Initiatives in the area of vehicle electronics such as engine management systems, in-vehicle network architecture,tele-matics for communication and tracking and other emerging technological areas are also being pursued whichcould be deployed on our future range of vehicles.

During fiscal 2006, we established our wholly owned subsidiary, TMETC, in the United Kingdom toaugment the abilities of our Engineering Research Centre which we believe will provide us with access toleading-edge technologies and can support the product development activities which we currently plan toundertake for the future in order to sustain and enhance our position in the increasingly competitive globalmarkets.

We are also widening the scope of our research and development activities from in-house product andtechnology development to managing the research and development process across various internal and externalagencies, including our research and development centers in Korea, Spain and the United Kingdom, as well as atvarious aggregate parts suppliers and outsourcing partners.

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We are the only automotive company in India which has a modern crash test facility for testing its newproducts for passenger safety. We also have a hemi-anechoic chamber testing facility for developing vehicleswith lower noise and vibration levels and an engine emissions testing facility to develop products meetinginternational standards.

Our product design and development center is equipped with computer-aided design, manufacture andengineering tools, with sophisticated hardware, software, and other information technology infrastructure,designed to create a digital product development environment and virtual testing and validation, resulting infaster product development cycle-time and data management. Rapid prototype development systems, testingcycle simulators, advanced emission test laboratories and styling studios are also a part of our productdevelopment infrastructure and are regularly used in product development.

Over the years, we have devoted significant resources towards our research and development activities. Ourtotal expenditure on research and development including capitalized expenditure during fiscal years 2005, 2006and 2007 was Rs.3,933 million, Rs.4,761 million and Rs.7,969 million respectively.

Competition

We face competition from various domestic and foreign automotive manufacturers in the Indian automotivemarket. Many foreign automotive manufacturers have increased or are expected to increase their participation inthe Indian market through technology transfers, joint ventures or subsidiaries.

We have designed our products to suit the specific requirements of the Indian market based on specificcustomer needs such as safety, driving comfort, fuel efficiency and durability. We believe that our vehicles aresuited to the general conditions of Indian roads, local climate and they comply with applicable environmentalregulations currently in effect. We also offer a wide range of optional configurations to meet the specific needs ofour customers. We intend to revamp our product portfolio in order to meet the increasing customer expectation ofowning “world class” products.

Seasonality

Demand for our vehicles in the Indian market is subject to seasonal variations. Demand generally peaksbetween January and March, although there is a decrease in demand in February just before release of the IndianFiscal Budget. Demand is usually lean from April to July and picks up again in festival season from Septemberonwards with a decline in December due to year end.

Facilities

We currently operate three principal automotive manufacturing facilities. The first facility was establishedin 1945 at Jamshedpur in the State of Jharkhand in eastern India. We set up a second facility in 1966 (withproduction commencing in 1976) at Pune, in the State of Maharashtra in western India, and a third in 1985 (withproduction commencing in 1992) at Lucknow, in the State of Uttar Pradesh in northern India. During fiscal 2007,we worked towards setting up a new manufacturing plant in Uttarakhand. The Jamshedpur, Pune and Lucknowmanufacturing facilities have been accredited with ISO/TS 16949:2000(E) certification. We are in the process ofsetting up a plant in each of Singur in West Bengal and Dharwad in Karnataka. We have also set up research anddevelopment facilities in the United Kingdom.

Installed Capacity

Our total vehicle production capacity in India as of March 31, 2007 determined on the basis of twoproduction shifts per day and including capacity for the manufacture of replacement parts, was 682,000 unitsannually.

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The following table shows our installed capacity as at March 31, 2007, and production levels by plant andproduct type in fiscal 2005, 2006 and 2007:

Fiscal Year ended March 31,

InstalledCapacity(1)

Production (Units)

2005 2006 2007

JamshedpurMedium and Heavy Commercial Vehicles . . . . . . . . . . . . . . . . . . . . . . 96,000 71,023 69,891 98,227PuneMedium and Heavy Commercial Vehicles, Light Commercial

Vehicles, Utility Vehicles, Passenger Cars . . . . . . . . . . . . . . . . . . . . 556,000 311,269 366,468 458,324LucknowMedium and Heavy Commercial Vehicles, Light Commercial

Vehicles, Utility Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,000 18,649 19,963 28,235

(1) On double shift basis including capacity for manufacture of replacement parts.

Components and Raw Materials

The principal raw materials and components required by us for use in our vehicles are steel sheets andplates, castings, forgings and items such as tyres, batteries, electrical items and rubber and plastic parts. The rawmaterials, components and consumables that are domestically sourced, include steel (sheet-metal, forgings andcastings), tyres and tubes, batteries, fuel injection systems, air-oil filters, consumables (paints, oils, thinner,welding consumables, chemicals, adhesives and sealants) and fuels. We also require aggregates like axles,engines, gear boxes and cabs for our vehicles, which are manufactured by our subsidiaries and affiliates.

We have undertaken an e-commerce initiative through the development of a business-to-business site withthe assistance of our subsidiary, TTL, for electronic interchange of data with our suppliers. This has enabled us tohave real time information exchange and processing to manage our supply chain effectively. We use externalagencies as third party logistic providers. This has resulted in space and cost saving by transferring a part of ourinventory to a third party.

As part of our strategy to become a low-cost vehicle manufacturer, we have undertaken various initiatives toreduce our fixed and variable costs including an e-sourcing initiative started in 2002 through which we procuresome supplies through reverse auctions. We have established a procedure for ensuring quality control ofoutsourced components. Products purchased from approved sources undergo a supplier quality improvementprocess. We also have a program for assisting vendors from whom we purchase raw materials or components tomaintain quality. Each vendor is reviewed on a quarterly basis on parameters of quality, cost and delivery.Preference is given to vendors with QS-9000 certification. We also maintain a stringent quality assuranceprogram that includes random testing of production samples, frequent re-calibration of production equipment andanalysis of post-production vehicle performance and ongoing dialogue with workers to reduce production errors.Further, in April 2003, we established a Strategic Sourcing Group to consolidate, strategize and monitor oursupply chain activities with respect to major items of purchase as well as major inputs of technology andservices. The Strategic Sourcing Group is responsible for recommending for the approval of the ManagementCommittee the long-term strategy and purchase decision for these items, negotiation and relationship withvendors with regard to these items, formulating and overseeing our purchasing policies, norms in respect of allitems, evolving guidelines for vendor quality improvement, vendor rating and performance monitoring andundertaking company-wide initiatives such as e-sourcing and supply chain management/policies with respect tovehicle spare parts. We are also exploring opportunities for global sourcing of parts and components from lowercost countries, and have embarked on a vendor management program that includes vendor base rationalization,vendor quality improvement and vendor satisfaction surveys.

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Suppliers

We have an extensive supply chain for procuring various components. We are also outsourcing many ofmanufacturing processes and activities to various suppliers. In such cases, we provide training to outsidesuppliers who design and manufacture the required tooling and fixtures.

Tata AutoComp Systems Ltd, or TACO, an affiliate of the Company manufactures auto components andencourages the entry of internationally acclaimed auto component manufacturers into India by setting up jointventures with them. Some of these joint ventures include: Tata Johnson Controls Limited for seats, Knorr BremseCV Systems for commercial vehicle air brakes, Tata Yazaki Autocomp Limited for wiring harnesses, JBMSangwoo Limited for pressed components and Tata Toyo Radiators Limited for radiator assemblies. These jointventures supply auto components for our products.

We have embarked upon a vendor management program that includes vendor base rationalization, vendorquality improvement and vendor satisfaction surveys. As part of driving continuous improvement inprocurement, we have integrated our system for electronic interchange of data with our suppliers with the ERP.This has facilitated real time information exchange and processing to manage our supply chain more effectively.

We import some components that are either not available in the domestic market or when equivalentdomestically-available components do not meet our quality standards. We also import products to take advantageof lower prices in foreign markets, such as special steels, wheel rims and power steering assemblies. Thefollowing table shows the values of imported and indigenous raw material and components consumed by us:

For the Fiscal Year ended March 31,

2005 2006 2007

Rs.million %

Rs.million %

Rs.million %

Imported (at rupee cost) . . . . . . . . . . . . . . . . . . . . . . . . . . 2,599 2.3 6,160 4.6 6,967 3.9Indigenously obtained . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110,004 97.7 126,491 95.4 172,190 96.1

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112,603 100.0 132,651 100.0 179,157 100.0

Our Strategy

We believe that we have established a strong position in the Indian automobile industry by launching newproducts, high quality-low cost manufacturing, investing in research and development and maintaining ourfinancial strength. We have also benefited from the expansion of our manufacturing and distribution network andthe creation of a highly talented workforce. Our goal is to continue to strengthen our position in the domesticmarket, maintain our operational excellence and grow our international business in select countries throughorganic as well as inorganic means. Our strategy to achieve these goals consist of the following elements:

Leveraging our capabilities: We believe we have an extensive range of products in commercial vehicles(for both goods and passenger transport) as well as passenger vehicles. We have plans to leverage this broadproduct base further with our strong brand recognition in India, our superior understanding of local consumerpreferences, our well developed in-house engineering capabilities and our extensive distribution network.

We believe that our in-house product development capability, our subsidiary TDCV in South Korea, ourassociation with Hispano in Spain, our joint venture with Marcopolo of Brazil in India and with Thonburi inThailand and our relationship with Fiat will enable us to expand our product range and extend our geographicalreach. For example, in fiscal 2006, we introduced the Tata ACE, a four wheeler mini-truck with a 0.7 tonpayload, that we believe has created a new category in the Indian commercial vehicle market. We had to morethan triple the capacity for the product within 24 months from the launch and we are currently increasing ourproduction capacity for this vehicle through a new plant at Uttarakhand to meet growing demand. We are alsocurrently developing an additional new truck platform.

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Pursuing a similar strategy, in our passenger vehicle business, we are developing a low cost car for theIndian market, as we believe that there will be a significant demand for such a passenger vehicle.

In addition to these products under development, we believe that our product development initiatives mayenable us to improve our existing product portfolio. We are expanding our existing manufacturing facilities andare also establishing new manufacturing facilities to cater to the growing demand for our products. We are alsocurrently expanding the reach of our sales and service network.

Mitigating cyclicality: The automobile industry is impacted by cyclicality, which is more pronounced inthe commercial vehicle category. To mitigate the impact of cyclicality faced by our medium and heavy trucksbusiness, we plan to continue to strengthen our operations in the light commercial vehicles, buses and passengercar categories. We also plan to continue to strengthen our non-vehicle business, such as spare part sales, annualmaintenance contracts, sales of aggregates for non-vehicle businesses, reconditioning of aggregates, and sale ofcastings, forgings, production aids and tooling and fixtures to reduce the impact of the cyclicality.

Expanding our international business: We believe that expanding our operations into other selectgeographic areas, both through organic and inorganic means, may also reduce the impact of cyclicality in theIndian market, as the cyclicality of these markets may not coincide with the cyclicality of the Indian market. Thisstrategy also provides us an opportunity to grow in markets with similar characteristics to the Indian market. Ourinternational business strategy has already resulted in the continuous growth of our international operations overthe previous three fiscal years. For example, in South Africa, within three years of a focused entry, we havebecome the third largest manufacturer in the commercial vehicle category.

Reducing costs and breakeven points: While expanding our business, we plan to continue to sustain andenhance our cost advantage. Since fiscal 2001, we have made significant reductions in our cost base, which hashad an impact on our results of operations and contributed to our return to profitability in the previous five fiscalyears. We are working with Ariba Inc. for e-sourcing and reverse auctions. We initiated the second phase of ourcost reduction program in fiscal 2006, which we expect to complete over a period of three years. We continue toplace an emphasis on the reduction of material costs, production costs, overhead and other general costs bypursuing value engineering and manufacturing cycle time reduction and stringent working capital controls. Weplan to continue to adopt international and local operational and management best practices to achieve continuedcost reductions and management efficiencies. We believe that productivity improvements and operationalefficiencies will help us to lower our break-even levels and thus improve our results of operations.

Continuing Focus on High Quality and Enhancing Customer Satisfaction: One of our principal goals isto achieve international quality standards for our entire line products and services and we are pursuing variousquality improvement programs, both internally and at our suppliers’ premises.

Our extensive sales and service network has also enabled us to provide quality customer service in a timelyfashion. We are deploying the Siebel based customer relationship management system across our sales andservice network, whereby we expect to improve our responsiveness to market and customer service needs. Ourcombined online Customer Relationship Management — Dealer Management initiative, which has beenimplemented in phases since 2003, now supports over 15,000 users within the Company and amongst its channelpartners in India and abroad.

Enhancing Capabilities Through the Adoption of Superior Processes: The Tata Group, of which we area part, aims at improving the quality of life through leadership in various sectors of national economicsignificance. In pursuit of this goal, the Tata Group has institutionalized an approach called the Tata BusinessExcellence Model, or TBEM, which has been formulated on the lines of the Malcolm Baldridge National QualityAward to enable it to drive performance and attain higher levels of efficiency both in its businesses and indischarging its social responsibility. The model aims to nurture core values and concepts embodied in variousfocus areas such as leadership, strategic planning, customers, markets and human resources to be translated to

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operational performance. Our adoption and implementation of this model seeks to ensure that our business can beconducted through superior processes in the future. We have deployed a balance score card (BSC) managementsystem, developed by Dr. Robert Kaplan, of the Harvard Business School, and Dr. David Norton, formeasurement based management and feedback. We have also deployed a new product introduction process forsystematic product development and a product lifecycle management system for effective product datamanagement across our organization. On the human resources front, we have adopted various processes toenhance the skills and competencies of our employees. We have also enhanced our performance managementsystem with appropriate mechanisms to recognize talent and sustain our leadership base. We believe these willenhance our way of doing business, given the dynamic and demanding global business environment.

Customer Financing: With financing increasingly becoming a critical factor in vehicle purchases and therising aspirations of consumers in India, we intend to significantly expand our vehicle financing activities toenhance our vehicle sales. Our subsidiary TMLFSL will lead our financing operations.

Continuing to Invest in Technology and Technical Skills: We believe we are one of the mosttechnologically advanced indigenous vehicle manufacturers in India. Over the years, we have enhanced ourtechnological strengths through extensive internal research and development activities as well as through theassistance of foreign research consultants from time to time. Our research and development resources, whichinclude those at our subsidiaries, like TMETC, TDCV and TTL and our associate companies, like HispanoCarrocera, further increase our capabilities in product design, manufacturing and quality control. We considertechnological leadership to be a significant factor in continued success, and therefore intend to continue to devotesignificant resources to upgrade our technological base.

Maintaining Financial Strength: We have embarked on Economic Value Added driven projectevaluation and capital investments aiming to ensure that we will be able to recover portions of our cost of capitalin the event of an economic downturn and to generate earnings in excess of our cost of capital during periods ofeconomic growth.

Leveraging Unified Tata Brand Equity: We recognize the need for enhancing our brand recognition inhighly competitive markets in which we compete with internationally recognized brands. We believe the Tatabrand name is associated by Indian customers with reliability, trust and value. We will continue to promote theTata brand in India, as well as in various international markets where we plan to increase our presence.

Business Overview

The Indian economy witnessed an accelerated GDP growth of 9.2% in fiscal 2007 as compared to 7.5% infiscal 2005 and 9% in fiscal 2006. Economic growth, road and infrastructure development, sustained freightavailability and buoyant freight rates had a positive impact on commercial vehicle sales. The passenger vehiclesales were favorably impacted by a reduction in excise duty on small cars, growth in disposable income andlaunch of new models. The domestic commercial and passenger vehicle sales witnessed a 23.7% growth duringfiscal 2007, in spite of increase in consumer interest rates, tightening of liquidity position in the last quarter andpeaking of fuel prices in the first few months of the fiscal with a gradual decline during the year. Vehicle exportscontinued to grow and witnessed a 14.8% growth over last year.

With a growth of 28%, we outperformed the industry and recorded our highest ever sales of 580,280(334,238 commercial; 246,042 passenger) vehicles. Our exports witnessed a growth of 6.5% to 53,474 units.

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We increased our overall market share in four-wheelers to 27.7% by launching new products and variants,strengthening our marketing activities and expanding our distribution network.

For the Fiscal Year ended March 31,

Industry Sales(including Exports)

Our Sales(including Exports)

Our Market Share(including Exports)

2006(Units)

2007(Units)

Growth(%)

2006(Units)

2007(Units)

Growth(%)

2006(%)

2007(%)

Commercial Vehicles . . . . . . . 391,641 517,648 32.2 245,022 334,238 36.4 62.6 64.6Passenger Vehicles . . . . . . . . . 1,318,648 1,578,176 19.7 209,107 246,042 17.7 15.9 15.6

Total: . . . . . . . . . . . . . . . 1,710,289 2,095,824 22.5 454,129 580,280 27.8 26.6 27.7

Source: SIAM report and internal analysis

Industry Structure and Developments

Commercial Vehicles

After witnessing a continuous decline in the growth rates in the last two fiscal years, the commercial vehicleindustry witnessed an impressive 33.3% growth in fiscal 2007 in sales due to robust economic growth, increasedindustrial activity and continued development of better road infrastructure. Restrictions on overloading andincreased demand from construction and mining activity had a favorable impact on M&HCV segment whichgrew by 32.8%. The LCV segment recorded even a higher growth rate of 33.9% due to growth in the goodsredistribution segment, which was primarily led by our last mile goods’ distribution vehicle, the TATA Ace. Theindustry’s domestic performance in fiscal 2006 and fiscal 2007 and our corresponding performance is tabulatedbelow:

For the Fiscal Year ended March 31,

Industry Sales(Domestic)

Our Sales(Domestic)

Our Market Share(Domestic)

2006(Units)

2007(Units)

Growth(%)

2006(Units)

2007(Units)

Growth(%)

2006(%)

2007(%)

M&HCVs . . . . . . . . . . . . . . . . . . . . 207,472 275,600 32.8 128,610 172,842 34.4 62.0 62.7LCVs . . . . . . . . . . . . . . . . . . . . . . . 143,569 192,282 33.9 86,226 125,744 45.8 60.1 65.4

Total CVs: . . . . . . . . . . . . . . 351,041 467,882 33.3 214,836 298,596 39.0 61.2 63.8

Source: SIAM report and internal analysis

With a 39% growth in fiscal 2007, we achieved a sale of 298,586 commercial vehicles in the domesticmarket and increased our market share by 2.6% to 63.8%, the highest in the last 6 years. In the M&HCVsegment, we achieved a sale of 172,842 units and increased our market share to 62.7%. In the LCV segment,continued impressive performance by our mini truck, the TATA Ace, helped us to outperform the industry,achieve our highest ever sale of 125,744 units and increased our market share by 5.3% to 65.4%.

Passenger Vehicles

The Indian passenger vehicle industry grew by 20.7% in fiscal 2007 to an all-time high of nearly1.38 million vehicles. The high growth could be attributed to the lowering of excise duty on small cars in theprevious fiscal year’s Union Budget, economic growth leading to sustained increase in disposable income andlaunch of new models/variants. The hardening of the interest rates from the third quarter of fiscal 2007 onwardshad a slowing down impact on the industry towards the end of the year.

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The industry’s domestic performance in fiscal 2006 and fiscal 2007 and our corresponding performance istabulated below:

For the Fiscal Year ended March 31,

Industry Sales(Domestic)

Our Sales(Domestic)

Our MarketShare

(Domestic)

2006(Units)

2007(Units)

Growth(%)

2006(units)

2007(units)

Growth(%)

2006(%)

2007(%)

Small Cars (Mini and Compact) . . 662,094 832,161 25.7 111,772* 146,018* 30.6 16.9 17.5Mid-Size Cars . . . . . . . . . . . . . . . . 213,862 206,431 (3,5) 39,388 34,310 (12.9) 18.4 16.6UVs . . . . . . . . . . . . . . . . . . . . . . . . 194,502 220,199 13.2 37,910 47,892 26.3 19.5 21.7

Total Passenger Vehicles: . . . . . . 1,143,076# 1,379,698# 20.7 189,070 228,220 20.7 16.5 16.5

* Including Fiat Branded Vehicles.# Inclusive of all segments.

Source: SIAM report and internal analysis

Despite increased competition, we have maintained our position as the second largest manufacturer ofpassengers vehicles in the Indian market with a share of 16.5%.

Small cars, accounting for approximately 60% of the total industry, grew by nearly 26% to 832,000 vehiclesin fiscal 2007 and is now comprised of 10 competing models. Our TATA Indica sales grew by nearly 31% and itsmarket share grew from 16.9% in the previous year to 17.4%. Along with Fiat’s sales, we were able to achieve ajoint market share of 17.5%. We grew our presence appreciably in the petrol segment and were able to defendour diesel segment leadership despite new offerings from our competition.

The entry mid-size segment continued to decline for the second year running with a negative growth of27%. Due to a lesser decline in our sales of the Indigo range, we increased our market share in the entry mid-sizesegment to 38% in fiscal 2007 from 33% in the previous fiscal year. Along with Fiat, we were able to achieve ajoint market share of 38.2%. We opened a new niche with the launch of our long wheel base Indigo XL — that ofa premium stretch sedan — with high end features previously available only in very premium executive saloons,while price positioning it in the upper midsize segment.

The Utility Vehicle segment witnessed a 13.2% growth to over 220,000 units in fiscal 2007. Our UtilityVehicle sales grew by 26.3% to 47,892 units in fiscal 2007 and we increased our share in this segment to 21.7%from 19.5% in the previous fiscal year. TATA Safari sales grew by 237% to a record high of 15,816 units basedon price re-positioning of the range effected mainly through a focused cost reduction effort on the platform.

International Business

We are expanding our international export operations, which have been ongoing since 1961.

Our exports of vehicles manufactured in India increased by 6.5% in fiscal 2007 to 53,474 units from 50,223units exported in fiscal 2006.

Our commercial and passenger vehicles are being marketed in several countries in Europe, Africa, theMiddle East, Australia, South East Asia and South Asia.

In fiscal 2007, our top five export destinations accounted for approximately 65% and 87% of our exports ofcommercial vehicles and passenger vehicles respectively. South Africa remained our largest export destination forthe commercial vehicles as well as passenger vehicles. Other key markets were the Middle East, western Africa,Turkey and western Europe. We are strengthening our position in the geographic areas we are currently operating inand exploring possibilities of entering new markets with similar market characteristics to the Indian market.

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Tata MotorFinance — Customer Financing Initiatives

Our vehicle financing division and our wholly owned subsidiary, TML Financial Services Limited(incorporated on June 1, 2006), operate under the brand name “TataMotorFinance” (“TMF”). TMF financed165,376 new vehicles in fiscal 2007, a growth of 71.8% as compared to 96,247 in the previous fiscal year. Withdisbursals of Rs.94.15 billion, a growth of 71.8% over Rs.54.79 billion in the previous year, TMF has emerged asthe third largest vehicle financier in the domestic market.

During the year, TMF extended support to our vehicle sales by financing 31.4% of our domestic sales,compared to 23.8% in the previous year. Given this growth, TMF is on course to become a strong captivefinancing arm to support the vehicle sales business as well as to de-risk the cyclical revenue stream of ourautomotive business. The extensive network of TMF will also complement the dealer network of vehicle sales,thus augmenting our reach.

In the Commercial Vehicle financing segment, TMF achieved a market share of 37.7%, with totaldisbursements for fiscal 2007 of Rs.61.22 billion (previous year Rs. 36.93 billion), recording a 66% growth TMFfinanced 100,088 units, an increase of 63% over the previous fiscal year. The Passenger car financing arm ofTMF continued to grow at a compound annual growth rate of 70%, thus supporting our Passenger Car sales byfinancing 28.8% of our total domestic sales. During fiscal 2007, TMF financed 65,288 units, disbursing Rs.20.68billion and posting a growth of 79% over the previous fiscal year. The Construction Equipment finance grew by292% in fiscal 2007, or Rs.6.63 billion against Rs.2.26 billion in the previous fiscal year, recording a compoundannual growth rate of 164% and emerging as the leading financer to Telco Construction Equipment Co. Limited,one of our subsidiaries, with an aggregate market share of 32% (as compared to 22% in fiscal 2006).

Subsidiary Companies

For fiscal 2007, our subsidiaries, on an aggregate basis, have significantly improved their financialperformance and profitability. A brief profile of our material subsidiary companies and their main financialparameters for fiscal 2007, is given below:

Tata Daewoo Commercial Vehicle Company Limited, Korea (TDCV), is our 100% owned subsidiary.TDCV is in the business of manufacture and sale of heavy commercial vehicles. During fiscal 2007, TDCVwitnessed 46% growth in its total CV volumes to 8630 units and improved its market share by 8.5% to 26.1%.Also during fiscal 2007, TDCV’s heavy vehicle exports constituted two thirds of South Korea’s total heavycommercial vehicle exports. TDCV recorded a turnover in fiscal 2007 of KRW 493.66 billion (Rs.22,488.1million) which was higher by 35% compared to KRW 364.94 billion (Rs.16,466.6 million) in fiscal 2006. TheProfit before Tax at KRW 29.26 billion (Rs.1,333.1 million) registered an increase of 63% compared to KRW17.94 billion (Rs.809.7 million) in fiscal 2006. After providing for tax, the profit was KRW 21.39 billion(Rs.974.6 million) against KRW 13.46 billion (Rs.607.5 million) in the previous fiscal year, an increase of 59%.TDCV declared a maiden dividend of 20% on Common Shares for fiscal 2007. KRW has been translated torupees at the average exchange rates prevailing in the respective fiscal years.

Telco Construction Equipment Company Limited (Telcon) is engaged in the business of manufacturingand sale of construction equipment and allied services in which we have a 60% holding with the balance 40%being held by Hitachi Construction Machinery Company Limited, Japan. With the increase in economic activity,especially in the infrastructure sector, Telcon recorded its best performance to date, having sold 5360 machinesin fiscal 2007 (3674 machines in fiscal 2006) with a gross revenue of Rs.18,141.6 million in fiscal 2007 (ascompared to Rs.12,894.9 million in the previous fiscal year), a profit after tax of Rs.1,838.6 million in fiscal2007 (as compared to Rs.868.4 million), which represents an increase of 112% over the previous fiscal year, anda dividend of Rs.4/per share in fiscal 2007 (as compared to Rs.2.50 per share in the previous fiscal year).

Tata Technologies Limited (TTL) is our 84.76%-owned subsidiary. Through its operating companies,INCAT and Tata Technologies iKS, the Tata Technologies group provides specialized Engineering & Design

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Services (E&D), Product Lifecycle Management (PLM) and product-centric IT services to leadingmanufacturers. It responds to customers’ needs through its 17 subsidiary companies having operations in 45cities across 12 countries on three continents and through its offshore development centers in India and Thailand.Its customers are among the world’s premier automotive, aerospace and consumer durable manufacturers.

INCAT, founded in 1989 and acquired by Tata Technologies in October 2005, is the world’s leadingindependent provider of E&D, Product & Information Lifecycle Management, Enterprise Solutions and PlantAutomation. INCAT focuses on enabling manufacturers to improve revenue and profit by realizing superiorproducts. INCAT’s services include product design, analysis and production engineering, Knowledge BasedEngineering, PLM, Enterprise Resource Planning and Customer Relationship Management systems. INCAT alsodistributes, implements and supports PLM products from leading solution providers in the world such as DassaultSystèms, UGS and Autodesk. With a combined global work force of more than 3,000 employees, INCAT hasoperations in the United States (Novi, Michigan), Germany (Stuttgart) and India (Pune).

Tata Technologies iKS is a global leader in engineering knowledge transformation technology. For over 15years, iKS has enabled engineering knowledge transformation through ‘i get it’, the only web application in theworld offering 100,000 hours of engineering knowledge for AutoCAD, INVENTOR, Solid Works, Solid Edge,UG/NX, Teamcenter, COSMOS Works and CATIA on a single delivery platform application.

TTL had 17 subsidiary companies as at March 31, 2007. A few companies out of these subsidiaries arebeing wound up, liquidated or merged even as various restructuring initiatives are being taken with the objectiveof bringing in operating and tax efficiencies by sharpening the focus on its services and product business, fixingterritorial responsibility for top and bottom line growth and establishing a global delivery centre supporting theoverall business.

The consolidated revenue of the TTL Group in fiscal 2007 was Rs.9,605.3 million in fiscal 2007, anincrease of 76% as compared to Rs.5,450.0 million in the previous fiscal year. The profit before tax wasRs. 246.5 million as compared to Rs.194.1 million in the previous fiscal year, recording a growth of 27%.

TML Financial Services Limited (TMLFSL), our wholly-owned subsidiary, was incorporated on June 1,2006 with the objective of becoming a preferred financier for our customers and our channel partners bycapturing customer spending over the vehicle life-cycle and by extending value added products, combiningfinancing offerings with insurance, fleet management, operating leases, re-finance and other products related tovehicles sold by us. TMLFSL is registered with RBI as a Systemically Important Non-Deposit taking NBFC andis classified as an Asset Finance Company. TMLFSL commenced operations in September 2006, and for theperiod ended March 31, 2007, it made disbursements close to Rs.40,000 million recording a profit after tax ofRs.127.9 million. TMLFSL has a paid-up capital of Rs.4,500 million and a net worth of Rs.5,605.4 million.

Intellectual Property

We have 120 trademarks registered in India and approximately 91 trademark applications which arecurrently pending registration. In addition to this, our significant trademarks are registered, or are in the processof being registered, in nearly 117 countries. We currently hold approximately 1020 of these registrationsworldwide. The registrations mainly include trademarks for each of our vehicle models. Further, we also use the“Tata” brand, which has been licensed to us by Tata Sons Limited. See “The Tata Group”. As part of ouracquisition of TDCV, we have the perpetual and exclusive use of the “Daewoo” brand and trademarks in Koreaand overseas markets for the product range of TDCV.

India is a member of the World Trade Organization. In compliance with its obligations under the Agreementon Trade Related Aspects of Intellectual Property, or TRIPS, India grants statutory protection to various forms ofintellectual property, including patents, copyrights, industrial designs and trademarks. The Trade Marks Act,1999 and the Copyright Act, 1957, as amended, which are currently in force in India, are TRIPS compliant. ThePatents Act, 2002, as amended, to the extent that it relates to our business and operations, provides adequateproduct and process patent protection in India in accordance with its obligations under TRIPS. The United States

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has placed India on its “priority watch list” under Section 301 of TRIPS for failing to provide adequate levels ofprotection for intellectual property rights. Although we have never experienced any material difficulties inprotecting our brands and other intellectual property in India, the protection and enforcement of intellectualproperty rights in India has not been and may not be as effective as in the United States.

We currently own 14 patents and have 50 patent applications pending registration in India and one in theUnited Kingdom. These patents are mostly in relation to devices which enable efficient functioning, such asenergy saving devices. Our most significant patent, which is currently in the process of being registered, is aportable device for measurement of head impact points in a vehicle.

In addition to the above, we also have various copyright and Internet domain name registrations.

In varying degrees, all of our trademarks, brands or patents are important to us. In particular, the expirationor termination of the Tata brand could materially affect our business.

Capital and Product Development Expenditures

Our cash outflow on account of capital expenditure aggregated Rs.8,175 million, Rs.11,235 million andRs.24,612 million during fiscal 2005, 2006 and 2007, respectively. Our capital expenditure during the past threeyears has been related mostly to design and development of new products and variants, capacity expansion fornew and existing products to meet the market demand and investments towards improving quality, reliability andproductivity that are aimed at operational efficiency.

We intend to continue to invest in our business units and research and development over the next severalyears for improving our existing product range and developing new products and platforms to build and expandour presence in the passenger vehicle and commercial vehicle categories to strengthen our position in India andgrowing our presence in the select international markets.

As a part of this future growth strategy, we plan to spend around Rs.120 billion in the next three to fourfiscal years toward product development, capital expenditure in capacity enhancement, plant renewal andmodernization and to pursue other growth opportunities. These expenditures are expected to be funded largelythrough cash generated from operations, existing investible surplus in the form of cash and cash equivalents,investment securities and other external financing sources. In fiscal 2006, we obtained a resolution from ourshareholders permitting the Board to raise a maximum of Rs.30 billion in equity or equity-related instruments, ifrequired, and also raise our borrowing limits to Rs.100 billion, to fund capital expenditure. In fiscal 2007, weobtained shareholders’ consent to a resolution, superseding the above resolution, to increase the borrowing limitto Rs.120 billion.

Employees

We consider our human capital as a critical factor to our success. Under the aegis of the Tata Group, wehave drawn up a comprehensive human resource strategy that addresses key aspects of human resourcedevelopment such as:

• Code of conduct and fair business practices.

• A fair and objective performance management system linked to the performance of the businesses whichidentifies and differentiates high performers while offering separation avenues for non-performers.

• Creation of a common pool of talented managers across the Tata Group with a view to increasing theirmobility through inter-company job rotation.

• Evolution of performance based compensation packages to attract and retain talent within the Tata Group.

• Development of comprehensive training programs to impart and continuously upgrade the industry/function specific skills.

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In line with the Human Resource strategy, we, in turn, have recently implemented various initiatives in order tobuild better organizational capability that we believe will enable us to sustain competitiveness in the global marketplace. Our people practices and employee engagement has enabled us to improve our position among the Top 25‘Best Employers’ in India over the last three years. This has also been aided through continuous benchmarking ofinternal HR processes to support the Company’s journey towards becoming a global player.

Our human resources focus is to attract talent, retain the better and advance the best.

Some of the initiatives to meet this objective include:

• Massive recruitment across the country to meet the requirements of the expansion plans

• Extensive process mapping exercise to benchmark and align the human resource processes with globalbest practices

• Introduction of a globally benchmarked employee engagement survey

• Succession planning through identification of second level of managers for all units, locations, functions.

• Implementation of a “Fast Track Selection Scheme”, which is a system for identifying potential talent inthe areas of general, commercial and operations management and offering them opportunities for growthwithin the organization. Our human resources team has been invited to replicate this system in other Tatacompanies.

• “Talent Management Scheme” which includes identification of high performers and high potentialsthrough various routes like PMS and Development Centres. Subsequent to the identification process weprovide them with challenging assignments for faster development.

• Introduction of performance rating based salary review and quality linked variable payment forsupervisory category of employees.

Other initiatives include:

• Extensive brand building initiatives at university campuses to increase recruiting from premiumuniversities

• Introduction of an employee self service portal and employee help desk for the benefit of employees.

We employed approximately 22,014, 22,349 and 22,349 permanent employees as of March 31, 2005, 2006 and2007, respectively.

Subsidiaries and Associates

We had the following subsidiaries as at March 31, 2007:

Name of Subsidiary Country of Incorporation

Percentage Ownership(including Subsidiary

Interest)

Sheba Properties Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India 100.00%Concorde Motors (India) Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . India 100.00%Telco Construction Equipment Co. Ltd. . . . . . . . . . . . . . . . . . . . . . . India 60.00%Tata Technologies Ltd. & its subsidiaries(1) . . . . . . . . . . . . . . . . . . . India 84.76%HV Axles Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India 100.00%HV Transmissions Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India 100.00%TAL Manufacturing Solutions Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . India 100.00%Tata Motors Insurance Services Ltd. . . . . . . . . . . . . . . . . . . . . . . . . India 100.00%Tata Daewoo Commercial Vehicle Co. Ltd . . . . . . . . . . . . . . . . . . . Republic of Korea 100.00%TML Financial Services Ltd. (w.e.f. June 1, 2006) . . . . . . . . . . . . . India 100.00%Tata Marcopolo Motors Ltd. (w.e.f. September 20, 2006) . . . . . . . . India 51.00%Tata Motors (Thailand) Ltd. (w.e.f. February 28, 2007) . . . . . . . . . . Thailand 70.00%Tata Motors European Technical Centre Plc . . . . . . . . . . . . . . . . . . United Kingdom 100.00%

(1) For details of our holding percentages in various subsidiaries of Tata Technologies refer to Note 1 (c) on page F-68.

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In addition, we had the following associates as at March 31, 2007:

Name of Associate Country of Incorporation

Percentage Ownership(including Subsidiary

Interest)

NITA Company Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bangladesh 40.00%Tata Cummins Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India 50.00%Tata AutoComp Systems Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India 50.00%Tata Precision Industries Pte. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . Singapore 49.99%Hispano Carrocera S.A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Spain 21.00%TSR Darashaw Ltd. (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India 26.00%Tata Securities Pvt. Ltd.(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India 29.34%Telcon Ecoroad Resurface Pvt. Ltd.(2) . . . . . . . . . . . . . . . . . . . . . . . . India 21.60%

(1) As a result of the merger of Tata Finance Limited with us, these companies became our associates from April 1, 2005.(2) Associate of Telco Construction Equipment Co. Ltd. (“Telcon”).

Legal Proceedings

We are involved in legal proceedings in various states in India, both as plaintiff and as defendant. In respectof claims against us below Rs.50 million, the majority of cases pertain to motor accident claims (involvingvehicles that were damaged in accidents while being transferred from our manufacturing plants to regional salesoffices) and consumer complaints. Some of these cases relate to replacement of parts of vehicles and/orcompensation for deficiencies in the services by us or our dealers. We believe that none of these claims or actionsindividually or in the aggregate will have a material adverse effect on our business, financial condition or resultsof operations.

Claims against us not acknowledged as debts and other claims for which we may be contingently liable, asat March 31, 2007, are described in Note 8 to Note 12 to Schedule 14 on page F-33 included elsewhere in thisOffering Memorandum.

We believe that none of the contingencies either individually or in the aggregate, would have a materialadverse effect on our financial condition, results of operations or cash flows.

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DIRECTORS AND MANAGEMENT

Directors

Under our Articles of Association, the number of our Directors cannot be less than three nor more than 15.As at June 30, 2007 there were 10 Directors, including a nominee Director of Tata Steel. Our Board of Directors,or the Board, has the power to appoint Managing Directors and Executive Directors.

Our Articles of Association provide that the Board of Directors of Tata Steel Limited, or Tata Steel, whichwith its subsidiary owns, as of March 31, 2007, 8.62% of our ordinary shares, has the right to nominate oneDirector (the Steel Director) to the Board. Dr. J.J. Irani is the current nominee Director of Tata Steel.

In addition, our Articles of Association provide that our debenture holders have the right to nominate oneDirector (the Debenture Director) if the trust deeds relating to outstanding debentures require the holders tonominate a Director. Currently there is no Debenture Director. Also, the Articles provide that pursuant to theterms of loan agreements with certain financial institutions in India, those institutions have the right to nominatetwo Directors (each, the Financial Institutions Director) to the Board. Currently there is no Financial InstitutionsDirector.

The Directors may be appointed by the Board of Directors or by a General Meeting of the shareholders. TheBoard may appoint any person as an Additional Director, but such a Director must retire at the next AnnualGeneral Meeting unless re-elected by the shareholders after complying with the provisions of the Companies Act.A casual vacancy caused on the Board due to death or resignation of a sitting member can be filled by the Board;but such a person can remain in office only for the unexpired term of the person in whose place he was appointedand on the expiry of the term he will retire unless re-elected by the shareholders. The Board may appoint anAlternate Director in accordance with the provisions of the Companies Act to act for a Director during hisabsence, which period of absence shall not be less than three months. Currently there is no Alternate Director.

Two-thirds of the total number of Directors on the Board are subject to retirement by rotation, and of suchDirectors one third must retire every year. The Directors to retire are those who have been the longest in office.Our Directors are not required to hold any of our ordinary shares by way of qualification shares. In July 2005appointed Mr. Ravi Kant as our Managing Director, who is responsible for and oversees our day to dayoperations. Mr. P.P. Kadle, our Executive Director, heads the Corporate Affairs, Finance and InformationTechnology functions and Mr. P.M. Telang, our Executive Director, heads the Commercial Vehicle Business.Appropriate powers have been delegated to them to perform their functions. The Managing Director’s andExecutive Director’s appointment is for a term of five years.

As of March 31, 2007, our Directors and Executive Officers, in their sole and joint names, held beneficiallyan aggregate of 72,372 shares (approximately 0.02% of our issued share capital). In addition, as of March 31,2007, certain of our Directors held as trustees for various non-affiliated trusts an aggregate of 354,976 shares(representing approximately 0.09% of our issued share capital).

The following table provides information about our Directors and Executive Officers as at July 9, 2007.

Name Position Year Appointed as Director

Ratan N. Tata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chairman 1981N.A. Soonawala . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director 1989J.J. Irani . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director 1993V.R. Mehta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director 1998R. Gopalakrishnan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director 1998N.N. Wadia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director 1998S. M. Palia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director 2006Ravi Kant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CEO & Managing Director 2000Praveen P. Kadle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Executive Director & CFO 2001Prakash M. Telang . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Executive Director 2007

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Biographies

Mr. Ratan N. Tata (Chairman). Mr. Ratan N. Tata holds a B.Sc. (Architecture) degree from CornellUniversity, USA and has completed the Advanced Management Program at Harvard University, USA. He joinedthe Tata Group in 1962 and is the Chairman of the Tata group of companies and Tata Sons Limited, the holdingcompany for the majority of the Tata group of companies. Mr. Tata is associated with various organizations inIndia and abroad. He is the Chairman of the Government of India’s Investment Commission and a member ofPrime Minister’s Council on Trade and Industry, the National Hydrogen Energy Board and the NationalManufacturing Competitiveness Council. He also serves on the International Investment Council, South Africa,the International Business Advisory Council of the British Government, the Asia-Pacific Advisory Committee tothe Board of Directors of the New York Stock Exchange and the International Advisory Boards of the MitsubishiCorporation, the American International Group and JP Morgan Chase. Mr. Tata has been on our Board sinceAugust 1981 and has spent more than 14 years in an executive capacity and is actively involved with productdevelopment and other business strategies pursued by us.

Mr. N.A. Soonawala. Mr. N.A. Soonawala is an honors graduate in commerce from the University ofBombay and a Chartered Accountant from the Institute of Chartered Accountants of India. He has wide exposurein the field of finance, including having previously worked with ICICI, Washington. He joined Tata SonsLimited in 1968 and was a finance director until June 2000. He is on the boards of various Tata group companiesand committees as Director. Mr. Soonawala has been on our Board since May 1989.

Dr. J.J. Irani. Dr. Jamshed Irani obtained a B.Sc. degree from Science College, Nagpur in 1956 with a GoldMedal in Geology and a M.Sc. (Geology) degree from the Nagpur University in 1958, both with first class. Healso obtained M.Met. and Ph.D. degrees from the University of Sheffield, UK, in 1960 and 1963 respectively,with a Gold Medal for the Ph.D. Thesis. In 1993, the University of Sheffield conferred upon him the HonoraryDegree of “Doctor of Metallurgy”. Dr. Irani was conferred an honorary knighthood in 1997 by the Queen ofEngland for his contribution towards strengthening the Indo-British Partnership. He is also on the boards ofvarious Tata companies and has been on our Board as a Tata Steel Nominee since June 1993.

Mr. V.R. Mehta. Mr. V.R. Mehta holds a B.E. (Honours) degree from the University of Rajasthan.Mr. Mehta has considerable financial and project evaluation expertise, both at national and international levels.Mr. Mehta worked as a senior expert for the Asian Development Bank and earlier held a senior level positionwith the Indian federal Ministries of Railways, Shipping and Transport. He played a key role in financialrevamping and rationalization processes of major ports in India and has participated in important diplomaticmissions and has represented India in International Conferences. Mr. Mehta is on the Board of other companiesin his individual capacity or a nominee of financial institutions or foreign companies. Mr. Mehta joined ourBoard in June 1998 as a Financial Institutions nominee. In September 2005, Unit Trust of India withdrew theirnomination of Mr. Mehta as Financial Institution Director, though he continues to be on the Board in hisindividual capacity.

Mr. R. Gopalakrishnan. Mr. R. Gopalakrishnan holds a Bachelor’s degree in Science and a B.Tech(Electronics) degree from the Indian Institute of Technology (IIT), Kharagpur. He is also an Executive Directorof Tata Sons Limited and a member of the Group Executive Office of Tata Sons Limited, besides being on theBoards of various Tata companies. Prior to joining the Tata group in August 1998, he was the Vice-Chairman ofHindustan Lever Limited. With effect from January 2001, Mr. Gopalakrishnan has, together with the Chairmanand Executive Director(s), the responsibility of overseeing our operations. Mr. Gopalakrishnan has been aDirector on our Board since December 1998.

Mr. N.N. Wadia. Educated in the UK, Mr. N.N. Wadia is the Chairman of Bombay Dyeing &Manufacturing Company Limited and heads the Wadia Group. He is also the Chairman/Trustee of variouscharitable institutions and non-profit organizations. Mr. Wadia has been on our Board since December 1998.

Mr. S. M. Palia. Mr. Palia is a graduate, both in Commerce and Law with CAIIB and AIB (London) degreein banking. Mr. Palia was a banker by profession prior to retiring. From 1964-1989, he worked for the Industrial

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Development Bank of India, where he held a number of positions, including that of an Executive Director. Hehas also acted as an advisor to the Industrial Bank of Yemen and the Industrial Bank of Sudan, under WorldBank assistance programmes. In addition, he was the Managing Director of Kerala Industrial and TechnicalConsultancy Organisation Limited, a company set up to provide consultancy services to micro, small andmedium enterprises. Mr. Palia is on the Boards of various companies in the industrial and financial servicesectors and is also actively involved as a trustee in various non-governmental organizations and trusts. He wasappointed on our Board with effect from May 19, 2006. Mr. Palia is also the financial expert on the AuditCommittee.

Mr. Ravi Kant. Mr. Kant holds a Bachelor of Technology degree from the IIT, Kharagpur and a Masters inScience in management techniques from Aston University, Birmingham, UK. Mr. Kant has wide and variedexperience in the manufacturing and marketing field, particularly in the automobile industry. Prior to joining us,he was with Philips India Limited as Director of Consumers Electronics business and prior to that with LML Ltd.as Senior Executive Director (Marketing) and Titan Watches Limited as Vice President (Sales & Marketing).Mr. Kant was also employed with Kinetic Engineering Limited, Hindustan Aluminum Company Limited andHawkins Cookers Limited. Mr. Kant had been an Executive Director since May 2000, responsible formanufacturing and marketing of commercial vehicles and manufacturing of utility vehicles and was appointed asour Managing Director on July 29, 2005. Mr. Kant is the CEO of the Company.

Mr. P.P. Kadle. Mr. P.P. Kadle is an Honours Graduate in Commerce and Accountancy from MumbaiUniversity. He is also a member of the Institute of Chartered Accountants of India, the Institute of Cost andWorks Accountants of India and the Institute of Company Secretaries of India. He has gathered wide experiencewith well-known Indian companies in the fields of management, accountancy, law, finance and treasury. Prior tojoining us as Vice-President (Finance), Mr. Kadle was with Tata-IBM Ltd as their Chief Financial Officer. InOctober 2001, Mr. Kadle was appointed as an Executive Director. He is responsible for Finance, HumanResources and Corporate Affairs and is the CFO of the Company.

Mr. Prakesh Telang. Mr. Prakesh Telang holds a Bachelor’s Degree in Mechanical Engineering and anMBA from IIM, Ahmedabad. Mr. Telang has over three decades of functional expertise in the automotiveindustry and machinery manufacturing. After spending the first three years of his career with M/s Larsen &Toubro, he joined the House of Tatas through the prestigious TAS (Tata Administrative Service) cadre. Sincejoining Tata Motors Limited, he has been responsible for product development, manufacturing, sales andmarketing functions of the Strategic Business unit of Light & Small Commercial Vehicles. Mr. Telang has beenappointed as Executive Director (Commercial Vehicles) of the Company effective May 18, 2007.

There is no family relationship between any of our Directors or Executive Officers.

Executive Officers

Set out below are our current executive officers, and details of the year they joined us:

Name Position Year of Joining

Mr. R. Kant . . . . . . . . . . . . . . . . . . . Managing Director 1999Mr. P.P. Kadle . . . . . . . . . . . . . . . . Executive Director 1996Mr. P.M. Telang . . . . . . . . . . . . . . . Executive Director 1972Mr. A.P. Arya . . . . . . . . . . . . . . . . . President (Jamshedpur, Lucknow) 1996Mr. R. Dube . . . . . . . . . . . . . . . . . . President 1998Mr. S. Mani . . . . . . . . . . . . . . . . . . . Vice President (Sales & Marketing — CVBU) 2000Mr. K C Girotra . . . . . . . . . . . . . . . Vice President (Lucknow Works & FBV) 1981Mr. C. Ramakrishnan . . . . . . . . . . . Vice President 1980Mr. R.S. Thakur . . . . . . . . . . . . . . . Vice President (Finance) 1972Mr. P.Y. Gurav . . . . . . . . . . . . . . . . Vice President (Corporate Finance, Accounting & Taxation) 2001Dr. S. J. Tambe . . . . . . . . . . . . . . . . Vice President (Human Resources) 2005Mr. H.K. Sethna . . . . . . . . . . . . . . . Company Secretary 1995

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Compensation

The following table provides the annual compensation paid to our Directors for the fiscal year endedMarch 31, 2007.

Name Position Remuneration (1) (in Rupees)

Ratan N. Tata(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chairman 5,245,000N.A. Soonawala . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director 3,645,000J.J. Irani . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director 1,520,000J.K. Setna . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director 650,000V.R. Mehta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director 4,505,000R. Gopalakrishnan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director 2,530,000N.N. Wadia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director 745,000S.A. Naik . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director 2,530,000S.M. Palia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Director 1,840,000Ravi Kant(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Managing Director & CEO 24,051,000P.P. Kadle(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Executive Director & CFO 21,682,000

Apart from the above, the Managing and Executive Directors are also eligible to receive special retirement benefits at the discretion of theBoard on their retirement, which include housing, monthly pension and medical benefits. Our Executive Directors are entitled to six months’salary as severance fees upon termination of their contracts by us.

(1) Includes salary, allowance, taxable value of perquisites, commission and our contribution to provident fund and superannuation fund forExecutive Directors and sitting fees and commission for Non-Executive Directors.

(2) The above does not include retirement benefits provided for Mr. Tata for his tenure in an executive capacity, of Rs. 1.64 million as atMarch 31, 2007.

(3) Rounded to nearest thousands of rupees and includes retirement benefits other than provision for paid leave and gratuity.

Committees

The Audit Committee is comprised of the following two independent directors: V.R. Mehta, Chairman,and S.M. Palia. The scope of the Audit Committee includes:

• Reviewing the quarterly financial statements before submission to the Board, focusing primarily on:

• any changes in accounting policies and practices and reasons for any such change;

• major accounting entries involving estimates based on an exercise of judgment by management;

• qualifications in draft audit reports;

• significant adjustments arising out of audits;

• compliance with accounting standards;

• analysis of the effects of alternative GAAP methods on the financial statements;

• compliance with listing and other legal requirements concerning financial statements;

• disclosure of related party transactions;

• review of the Annual Management Discussion and Analysis of Financial Condition Report, Results ofOperations Report and the Directors’ Responsibility Statement;

• overseeing our financial reporting process and the disclosure of our financial information, includingearnings press releases, to ensure that the financial statements are correct, sufficient and credible; and

• disclosures made under the CEO and CFO certification to the Board and investors.

• Reviewing with the management, external auditor and internal auditor the adequacy of our internal controlsystems and recommending improvements to the management.

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• Recommending the appointment/removal of the statutory auditor, fixing audit fees and approvingnon-audit, consulting services provided by the firms of statutory auditors to us and our subsidiaries;evaluating auditors performance, qualifications and independence.

• Reviewing the adequacy of the internal audit function, including the structure of the internal auditdepartment, coverage and frequency of internal audits, appointment, removal, performance and terms ofremuneration of the chief internal auditor.

• Discussing with the internal auditor and senior management, significant internal audit findings andfollow-up thereon.

• Reviewing the findings of any internal investigation by the internal auditor into matters involvingsuspected fraud or irregularity or a failure of internal control systems of a material nature and reportingany such matters to the Board.

• Discussing with the external auditor before the audit commences the nature and scope of such audit, aswell as conducting post-audit discussions to ascertain any area of concern.

• Reviewing our financial and risk management policies.

• Reviewing the effectiveness of the system for monitoring compliance with laws and regulations.

• Initiating investigations into the reasons for substantial defaults in payments to the depositors, debentureholders, shareholders (in case of nonpayment of declared dividends) and creditors.

• Reviewing the functioning of the Whistle-Blower mechanism, which is an extension of the Tata Code ofConduct.

• Reviewing the financial statements and investments made by our subsidiary companies.

The Audit Committee has also adopted policies for the approval of services to be rendered by ourindependent statutory auditor and its affiliates to us and our subsidiaries for ensuring such auditor’sindependence and objectivity. Said policies and our Whistle-Blower policy have also been extended to oursubsidiaries.

The Remuneration Committee is empowered to review the remuneration of whole-time directors,retirement benefits to be paid to them and dealing with matters pertaining to Employees’ Stock Option Scheme.

We have not issued any stock options to our directors/employees. The Remuneration Committee iscomprised of three independent and two non-executive Directors, namely N.N. Wadia, Chairman, Ratan N. Tata,N.A. Soonawala and V.R. Mehta.

The Investor Grievance Committee oversees the redressing of investors’ complaints pertaining tosecurities transfers, interest/dividend payments, non-receipt of annual reports, issue of duplicate certificates andother miscellaneous complaints. Its scope also includes delegation of powers to our executives of us or the sharetransfer agents to process share transfers and other investor-related matters. The Investor Grievance Committee iscomprised of R. Gopalakrishnan, Ravi Kant and P.P. Kadle.

The Executive Committee of the Board came into effect from July 25, 2006, upon the dissolution of theFinance Committee and the Committee of the Board. The Executive Committee of the Board reviews revenueand capital expenditure budgets, long-term business strategy, our organizational structure, raising of finance,property related issues, review and sale of investments and the allotment of securities within established limits.The Executive Committee also discusses matters pertaining to litigation, acquisitions and divestment, newbusiness forays and donations. The Executive Committee is comprised of Ratan N. Tata, Chairman, N.A.Soonawala, J.J. Irani, R. Gopalakrishnan, N.N. Wadia, Ravi Kant, Managing Director, and P.P. Kadle, ExecutiveDirector (Finance & Corporate Affairs).

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The Ethics and Compliance Committee sets forth policies relating to the implementation of the Tata Codeof Conduct for Prevention of Insider Trading and takes on record the monthly reports and dealings in securitiesby the “Specified Persons”. It also implements appropriate action in respect of violations of the Tata Code ofConduct. The Ethics and Compliance Committee is comprised of R. Gopalakrishnan. Praveen P. Kadle,Executive Director, has been appointed as the Compliance Officer under the said Code.

The Nominations Committee of the Board was constituted on July 25, 2006 with the objective ofidentifying independent directors to be appointed on the Board from time to time to refresh the constitution of theBoard from time to time. The Nominations Committee is comprised of Mr. N.N. Wadia, Chairman, Mr. Ratan N.Tata, Mr. N.A. Soonawala and Mr. S.M. Palia.

Apart from the Committees described above, the Board of Directors also constitutes Committee(s) ofDirectors with specific terms of reference as it may deem fit.

Share Ownership

We are a widely held, listed company with approximately 234,629 shareholders of record.

To our knowledge, as of March 31, 2007, the following persons beneficially owned more than 5% of our385,373,885 Ordinary Shares outstanding at that time:

Name of Shareholder Holding Percentage

Tata Sons Limited and subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84,988,908 22.05Citibank N.A., as Depositary(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,294,157 10.97Tata Steel Ltd. and subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,226,383 8.62DaimlerChrysler AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,596,476 6.64Life Insurance Corporation of India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,519,685 6.10

(1) Citibank, N.A., as depositary for our ADRs, was the holder on record on March 31, 2007 of 42,294,157 shares on behalf of the beneficialowners of deposited shares.

Since March 31, 2001, our largest shareholder, Tata Sons Limited (together with its subsidiaries) hassubstantially increased its shareholding in us from 14.31% to 22.05% as of March 31, 2007. Our second largestshareholder, Tata Steel Ltd. (together with its subsidiaries) has substantially increased its shareholdings, but itspercentage shareholding has decreased slightly from 9.42% as of March 31, 2001 to 8.62% as of March 31, 2007,as a result of our new issuances of shares. DaimlerChrysler AG has kept its shareholdings steady, but itspercentage shareholding has declined from 10.0% as of March 31, 2001 to 6.64% as of March 31, 2007 as aresult of our new issuances of shares. Record holdings of Citibank N.A., as Depositary for our ADRs, increasedfrom 7.47% as of March 31, 2001 to 10.97% as of March 31, 2007 because of the two-way fungibility ofDepositary Receipts. Life Insurance Corporation of India has decreased its shareholding and has seen itsshareholding percentage decline from 9.32% as of March 31, 2001 to 6.10% as of March 31, 2007 as a result ofthis decrease as well as our new issuances of shares.

According to our register of shareholders and register of beneficial shareholders, as of March 31, 2007, therewere 248 record holders of our shares with addresses in the United States, whose shareholdings representedapproximately 0.05% of our outstanding Ordinary Shares on that date, excluding any of our shares held byUnited States residents in the form of depositary shares. Because some of these shares were held by brokers orother nominees, the number of record holders with addresses in the United States may be fewer than the numberof beneficial owners in the United States.

The total permitted holding of Foreign Institutional Investors, or FIIs, in the paid up share capital of thecompany has been increased to 35% by a resolution passed by the shareholders of the Company on January 22,2004. The holding of FIIs in the Company as of March 31, 2007, was approximately 19.84%. See “ForeignInvestment and Exchange Controls — Investment by Foreign Institutional Investors” for further details.

None of our Shares of common stock entitles the holder to any preferential voting rights.

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Under the Takeover Regulations of India, any person who acquires more than 5%, 10%, 14%, 54% or 74%of our Shares or who is entitled to exercise voting rights with respect to more than 5%, 10%, 14%, 54% or 74%of our Shares must file a report concerning the shareholding or the voting rights with us and the stock exchangeson which our ordinary shares are traded. Similar disclosures would be applicable under the Insider TradingRegulations of India with respect to any person who acquires more than 5% of our Shares or voting rights withrespect to the Shares. Any increases or decreases in the shareholding of such person by 2% or more of our sharecapital must also be disclosed. Furthermore, under our listing agreement with the stock exchanges where ourShares are listed, we are required to periodically disclose to such stock exchanges the name and percentage ofShares held by persons or entities that hold more than 1% of our Shares. For the purposes of the above reportingand takeover requirements under our listing agreements, Shares withdrawn from our ADS facility will beincluded as part of a person’s shareholding in us.

To our knowledge, we are not, directly or indirectly, owned or controlled by any other corporation or by anygovernment or by any other natural or legal persons severally or jointly. We are not aware of any arrangementsthe operation of which may at a later time result in our change of control.

Related Party Transactions

We have undertaken in the past, and are likely to in the future undertake, transactions with related parties.Except with respect to the guarantee of certain obligations of certain of our subsidiaries and associates and otherTata Group companies to enable them to secure financing from financial institutions on more favorable terms, itis our policy generally not to enter into transactions with our subsidiaries or associates and other Tata Groupcompanies unless the terms thereof are no less favorable to us than those which could be obtained by us on anarm’s length basis from an unrelated third party.

We purchase materials, supplies and services from numerous suppliers throughout the world in the ordinarycourse of business, including from our subsidiaries, affiliates and firms with which certain members of our boardof directors are interested. We purchased materials, supplies (including capital goods), fixed assets and servicesfrom these entities in the amount of Rs. 28,803.3 million in fiscal 2007. We also sell our products, fixed assetsand services to our affiliates and firms with which certain members of our board of directors are interested. Wesold products, fixed assets and services to these entities in the amount of Rs. 8,212.7 million in fiscal 2007. Webelieve all of these purchase and sale transactions were arm’s-length transactions, none of which were material toour overall operations. For details of our related party transactions with our subsidiaries and associates, seeSchedule 14 on pages F-29 through F-31 of our audited non-consolidated financial statements included elsewherein this Offering Memorandum.

We regularly have trade accounts and other receivables from, and accounts payable to, our subsidiaries,affiliates and firms with which certain members of our board of directors are interested. We had outstandingtrade accounts and other receivables payable by these entities in the amount of Rs. 4,175.1 million as ofMarch 31, 2007. We had accounts payable to these entities in the amount of Rs. 2,649.6 million as of March 31,2007.

From time to time, we provide short to medium-term loans to our subsidiaries and affiliates, as well as loansunder a loan program established by us and our subsidiaries and affiliates to assist executives and directors withthe purchase of housing. We believe that each of these loans was entered into in the ordinary course of business.

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THE TATA GROUP

We are the second largest company in the diversified Tata Group in terms of fiscal 2007 revenues, and webenefit from being identified with the Tata brand and the Tata Group of companies.

The Tata Group is based substantially in India and had combined revenues of approximately US$48 billionfor the year ended March 31, 2007.

The Tata Group is highly diversified and the activities of the group are categorized under seven businesssectors, namely, engineering, materials, energy, chemicals, consumer products, services and communications andinformation systems. These companies do not constitute a “group” under Indian law.

The Tata Group has its origins in the trading business founded by Jamsetji Tata in 1874 that was developedand expanded in furtherance of his ideals by his two sons, Sir Dorabji Tata and Sir Ratan Tata, following theirfather’s death in 1904. The family interests subsequently vested largely in the Sir Ratan Tata Trust, the SirDorabji Tata Trust and related trusts. These trusts were established for philanthropic and charitable purposes andtogether owned a substantial majority of the shares of Tata Sons Limited, the principal holding company of theTata Group.

By 1970, the Tata Group had expanded from the trading company established in the nineteenth century toencompass a number of major industrial and commercial enterprises including The Indian Hotels CompanyLimited (1902), The Tata Iron and Steel Company Limited (Tata Steel) (1907), The Tata Power CompanyLimited (1910), Tata Chemicals Limited (1939), Tata Motors Limited (1945), Voltas Limited (1954), and TataTea Limited (1962). The Tata Group also promoted India’s first airline, Tata Airlines, which later became AirIndia (India’s national carrier), as well as India’s largest general insurance company, New India AssuranceCompany Limited, both of which were subsequently taken over by the Government as part of the Government’snationalization program. Tata Consultancy Services (TCS), a division of Tata Sons Ltd., is Asia’s leadingsoftware services provider and the first Indian software firm to exceed sales of US$1 billion. In recent times, theTata Group has also invested in several telephony and telecommunication ventures, including acquiring a portionof the Indian Government’s equity stake in the state owned Videsh Sanchar Nigam Limited, or VSNL.

Most of the Tata Group companies are leaders in their respective business segments. We are the leadingautomotive vehicle manufacturing company in India in terms of revenues. Tata Steel, another flagship companyof the group, is the oldest and the largest private sector integrated steel plant in operation in the country. TataChemicals is one of the world’s largest producers of synthetic soda ash and Tata Tea is the largest integrated teacompany in the country. Tata Power is the largest power generating supplier in the private sector. Indian Hotelsruns the largest hotel chain in the country. Titan Watches, which is a relatively new entrant, has emerged as theleader in the domestic watch market and is currently the sixth largest brand manufactured in the world. VSNL isthe leading international long distance telecommunications service provider in India.

We have for many years been a licensed user of the “Tata” brand owned by Tata Sons Limited, and thushave both gained from the use of the Tata brand as well as helped to sustain its brand equity. Since 1991 manymultinational corporations with well-established global brands have entered the Indian market. In response, theTata Group decided to institute a new corporate identity program in order to re-position itself to compete in aglobal environment. The new corporate identity is licensed to Tata Group companies, including us, for use withtheir respective products and services. A substantial ongoing investment is planned to develop and promote astrong, well-recognized and common brand equity, which is intended to represent for the consumer a level ofquality, service and reliability associated with products and services offered by Tata companies. To furtherprotect and enhance the Tata brand equity, a code of conduct has been adopted by some of the Tata companiesthat have access to the larger resources and services of the Tata Group. To implement these plans, Tata SonsLimited has undertaken a program by which consenting Tata companies are required to pay a subscription fee toparticipate in and gain from the new Tata Group identity. We believe that we benefit from association with the

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new Tata Group identity and, accordingly, have agreed to pay an annual subscription fee to Tata Sons Limitedfrom fiscal 1998 which is equal to 0.25% of our annual net revenue (defined as our net revenue exclusive ofexcise duties and other governmental taxes and non-operating income), provided that the subscription fee doesnot exceed 5% of our annual profit before tax (defined as our profit after interest and depreciation but beforeincome tax). However, for the fiscal years ended March 31, 2006 and 2007, we paid an amount less than 0.25%of our annual net revenue, as described above, as mutually agreed between Tata Sons and us. These calculationsare made with reference to our non-consolidated Indian GAAP financial statements. Pursuant to our licensingagreement with Tata Sons Limited, we have also undertaken certain obligations for the promotion and protectionof the new Tata Group identity licensed to us under the agreement. The agreement can be terminated by writtenagreement between the parties, by Tata Sons Limited upon our breach of the agreement and our failure to remedythe same, or by Tata Sons Limited upon providing six months notice for reasons to be recorded in writing. Theagreement can also be terminated by Tata Sons Limited upon the occurrence of certain specified events,including liquidation. Because we are the largest company in the Tata Group in terms of fiscal 2007 revenues andfurther because we believe that our growing international reputation brings benefits to the Tata brand, weconsider it very unlikely that we would ever be unable to use the Tata brand in relation to our products andservices.

The Tata Group companies have sought to continue to follow the ideals of ethics and integrity originallyestablished by the founder of the Tata Group and his successors. To further protect and enhance the Tata brandequity, these values and principles have been articulated in the Tata code of conduct, which has been adopted bymost of the Tata companies that have access to the larger resources and services of the Tata Group. Thesecompanies have endeavored to maintain high standards of management efficiency and to promote thecommercial success of Indian enterprises. The Tata Group has made a significant contribution toward nationalcauses through promotion of public institutions in the field of science, such as the Indian Institute of Science andthe Tata Institute of Fundamental Research, and in the field of social services through the Tata Institute of SocialSciences, the Tata Memorial Hospital and the National Center of the Performing Arts. Tata trusts are among thelargest charitable foundations in the country.

In addition, the Tata Group companies have sought to formulate and follow a coherent approach to variousmatters of importance in Indian business life. These include a refusal to adopt any particular political alignment,and espousal of causes that benefit society generally as well as the commercial interests of Tata Groupcompanies.

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INDIAN SECURITIES MARKET

The information in this section has been extracted from publicly available documents from various sources,including officially prepared materials from the Securities and Exchange Board of India, the Bombay StockExchange Limited, Mumbai and the National Stock Exchange of India Limited and has not been prepared orindependently verified by us or the managers or any of their respective affiliates or advisors.

India has a long history of organized securities trading. In 1875, the first stock exchange was established inMumbai.

Stock Exchange Regulations

India’s stock exchanges are regulated primarily by SEBI, as well as by the Government of India actingthrough the Ministry of Finance (the “MOF”), the Stock Exchange Division, under the Securities Contracts(Regulation) Act, 1956 (the “SCRA”), and the Securities Contracts (Regulation) Rules, 1957 (the “SCRR”). TheSCRR, along with the rules, by-laws and regulations of the respective stock exchanges, regulate the recognitionof stock exchanges, the qualifications for membership thereof and the manner in which contracts are entered intoand enforced between members.

The Securities and Exchange Board of India Act, 1992 (the “SEBI Act”), provided for the establishment ofthe SEBI to protect the interests of investors in securities and to promote the development of, and to regulate, thesecurities market and for matters connected therewith or incidental hereto. The SEBI Act granted the SEBIpowers to regulate the business of Indian securities markets, including stock exchanges and other financialintermediaries, promote and monitor self-regulatory organisations, prohibit fraudulent and unfair trade practicesand insider trading, and regulate substantial acquisitions of shares and takeovers of companies. SEBI has alsoissued guidelines concerning minimum disclosure requirements by public companies, rules and regulationsconcerning investor protection, insider trading, substantial acquisitions of shares and takeovers of companies,buybacks of securities, employee stock option schemes, stockbrokers, merchant bankers, underwriters, mutualfunds, foreign institutional investors, debenture trustees, credit rating agencies and other capital marketparticipants.

Listing

The listing of securities on a recognized Indian stock exchange is regulated by the Companies Act, theSCRA, the SCRR and the listing agreement of the respective stock exchange, or the Listing Agreement. Underthe standard terms of the Listing Agreement, the governing body of each stock exchange is empowered tosuspend trading of or dealing in a listed security for breach of our obligations under such agreement, subject toour receiving prior notice of the intent of the exchange. In the event that a suspension of a company’s securitiescontinues for a period in excess of three months, the company may appeal to SEBI to set aside the suspension.SEBI has the power to veto stock exchange decisions in this regard.

A listed company can be delisted under the provisions of the SEBI (Delisting of Securities) Guidelines,2003, which govern voluntary and compulsory delisting of shares of Indian companies from the stock exchanges.SEBI has power to amend listing agreements and bye-laws of stock exchanges in India. Any amendment of thebye-laws by the stock exchanges requires the prior approval of SEBI. A company may be delisted though avoluntary delisting sought by the promoters of the said company or a compulsory delisting by the stock exchangeor due to any acquisition of shares of the said company or a scheme or arrangement, or consolidation of holdingsby the person in control pursuant to which the public shareholding in the company falls below the minimumlimits specified by the relevant stock exchange or the listing agreements that may result in delisting of securities.A company may voluntarily delist from the stock exchange where its securities are listed provided that an exitopportunity has been given to the investors at an exit price determined in accordance with a specified formula.Such exit opportunity need not be given in cases where securities continue to be listed on a stock exchangehaving nationwide trading terminals. The procedure for compulsory delisting also requires the company to makean exit offer to the shareholders in accordance with the above-mentioned guidelines.

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In order to restrict abnormal price volatility in any particular stock, the SEBI has instructed stock exchangesto apply daily circuit breakers which do not allow transactions beyond certain price volatility. An index-basedmarket-wide (equity and equity derivatives) circuit breaker system has been implemented and additionally thereare currently in place varying individual scrip wise bands. The Indian Stock Exchanges can also exercise thepower to suspend trading during periods of market volatility. Margin requirements are imposed by stockexchanges that are required to be paid by stockbrokers. There are no such circuit breakers in respect of ourShares.

Public Issuance of Securities and Disclosures under the Companies Act and Securities Regulations

Under the Companies Act, a public offering of securities in India must be made by means of a prospectus,which must contain information specified in the Companies Act and the SEBI (Disclosure and InvestorProtection) Guidelines, 2000, as amended and be filed with the Registrar of Companies having jurisdiction overthe place where a company’s registered office is situated which, in our case, is currently the Registrar ofCompanies, Mumbai. A company’s directors and promoters may be subject to civil and criminal liability formisrepresentation in a prospectus. The Companies Act along with certain guidelines issued by the SEBI also setsforth procedures for the acceptance of subscriptions and the allotment of securities among subscribers andestablishes maximum commission rates for the sale of securities.

Public limited companies are required under the Companies Act and SEBI guidelines to prepare, file withthe Registrar of Companies and circulate to their shareholders audited annual accounts that comply with theCompanies Act’s disclosure requirements and other regulations governing their manner of presentation. Inaddition, a listed company is subject to continuing disclosure requirements pursuant to the terms of its listingagreement with the relevant stock exchange. The companies are also required to publish unaudited financialstatements albeit subject to a limited review by the companies auditors), on a quarterly basis and are required toinform stock exchanges immediately regarding any stock-price sensitive information.

The Companies Act further allows buybacks of securities, issuance of shares for a consideration other thancash in certain circumstances and mandatory compliance with accounting standards issued by the Institute ofChartered Accountants of India, or the ICAI.

The ICAI and the SEBI have implemented changes which require Indian companies to account for deferredtaxation, to consolidate their accounts (subsidiaries only), to provide segment-wise reporting and disclosure ofrelated party transactions from April 1, 2001 and accounting for investments in associated companies and jointventures in consolidated accounts and interim financial reporting from April 1, 2002.

As of April 1, 2003, accounting of intangible assets is also regulated by accounting standards set by theICAI and, as at April 1, 2004, accounting standards regulate accounting for impairment of assets.

Indian Stock Exchanges

There are now 23 stock exchanges in India. Most of the stock exchanges have their governing board for self-regulation. The BSE and NSE together hold a dominant position among the stock exchanges in terms of numberof listed companies, market capitalization and trading activity.

The stock exchanges in India operate on a trading day plus two, or T+2 settlement system. At the end of theT+2 period, obligations are settled with buyers of securities paying for and receiving securities, while sellerstransfer and receive payment for securities. For example, trades executed on a Monday would typically be settledon a Wednesday. The SEBI proposes to move to a T+1 settlement system. In order to mitigate risk arising out ofthe transactions entered into by the members of various stock exchanges either on their own account or on behalfof their clients, the Stock Exchanges have designed risk management procedures, which include compulsoryprescribed margins on the individual broker members, based on their outstanding exposure in the market, as wellas stock-specific margins from the members.

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To restrict abnormal price volatility, SEBI has instructed stock exchanges to apply the following price bandscalculated at the previous day’s closing price (there are no restrictions on price movements of index stocks):

Market Wide Circuit Breakers. Market wide circuit breakers are applied to the market for movement by10% and 20% for two prescribed market indices: the BSE Sensex for the BSE and the Nifty for the NSE (the“NSE Nifty”). If any of these circuit breaker thresholds are reached, trading in all equity and equity derivativesmarkets nationwide is halted.

Price Bands. Price bands are circuit filters of 20% movements either up or down, and are applied to mostsecurities traded in the markets, excluding securities included in the BSE Sensex and the NSE Nifty andderivatives products.

BSE

Established in 1875, the BSE is the oldest stock exchange in India. It is the first stock exchange in India tohave obtained permanent recognition in 1956 from the Government of India under the Securities Contracts(Regulation) Act, 1956.

It has evolved over the years into its present status as the primary stock exchange of India. The BSE hasswitched over to an on-line trading network since May 1995 and has today expanded this network to over 400cities in India. As of May 31, 2007, the BSE had 930 members, comprising 178 individual members, 730 Indiancompanies and 22 foreign institutional investors. Only a member of the BSE has the right to trade in stocks listedon the BSE. As at May 31, 2007, there were 4,833 listed companies whose securities were trading on the BSE.The average daily turnover of the BSE was Rs.47.1 billion in May 2007.

NSE

The NSE was established by financial institutions and banks to provide nationwide on-line satellite-linkedscreen-based trading facilities with market makers and electronic clearing and settlement for securities includinggovernment securities, debentures, public sector bonds and units. Deliveries for trades executed “on-market” areexchanged through the National Securities Clearing Corporation Limited. On its recognition as a stock exchangeunder the Securities Contracts (Regulation) Act, 1956 in April 1993, the NSE commenced operations in thewholesale debt market segment in June 1994. The capital market (equities) segment commenced operations inNovember 1994 and operations in the derivatives segment commenced June 2000. NSE trading terminals arenow situated in 1490 locations across India.

The market capitalization (capital market) of the NSE was approximately Rs.39.4 trillion as at June 26, 2007.

Takeover Code

Disclosure and mandatory bid obligations for listed Indian companies under Indian law are governed by theSecurities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997(“Takeover Code”) which prescribes certain thresholds or trigger points that give rise to these obligations, asapplicable. The Takeover Code is under constant review by the SEBI and was last amended on May 26, 2006.Since the Company is an Indian listed company, the provisions of the Takeover Code will apply to acquisition ofits shares.

The principal features of the Takeover Code are as follows:

• Any acquirer (defined as a person who, directly or indirectly, acquires or agrees to acquire shares orvoting rights in a company or acquires or agrees to acquire control over a company, either by himself orwith any person acting in concert) who acquires shares or voting rights that would entitle the acquirer to

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more than 5%, 10%, 14%, 54% and 74% of the shares or voting rights, as the case may be, in a companyis required to disclose the aggregate of his shareholding or voting rights in that company to the companyand to each of the stock exchanges on which the company’s shares are listed within two days of (i) thereceipt of allotment information or (ii) the acquisition of shares or voting rights, as the case may be. Theterm “shares” is defined under the Takeover Code to mean “ordinary shares or any other security whichentitles a person to acquire shares with voting rights”. A person who holds more than 15% of the shares orvoting rights in any company is required to make annual disclosure of his holdings to that company within21 days of the financial year (commencing on April 1 and ending on March 31). The company is requiredto disclose the same to each of the stock exchanges on which the company’s shares are listed.

• Further, a person who holds 15% or more but less than 55% of the shares or voting rights in any companyis required to disclose any purchase or sale of shares exceeding (in aggregate) 2% of the share capital ofthe company to the company and to each of the stock exchanges where the shares of the company arelisted within two days of (i) the receipt of allotment information or (ii) the sale or acquisition or disposalof shares or voting rights. Promoters or persons in control of a company are also required to make periodicdisclosure of shares or voting rights held by them along with persons acting in concert, in the samemanner as above, annually within 21 days of the end of the financial year as well as from the record datefor entitlement to a dividend.

• An acquirer who, along with persons acting in concert, acquires 15% or more of the shares or voting rightsof a company would be required to make a public announcement to acquire a further minimum 20% of theshares of the company. Such offer has to be made to all public shareholders of the company (defined asholders of shareholdings held by persons other than the promoter (as defined under the Takeover Code)).

• An acquirer who, together with persons acting in concert with him, holds 15% or more but less than 55%of the shares or voting rights in a company cannot acquire additional shares or voting rights that wouldentitle him to exercise more than 5% of the voting rights in any financial year ending on March 31 unlesssuch acquirer makes a public announcement offering to acquire a further minimum 20% of the shares orvoting rights which it does not already own in the company.

• Any acquisition of shares or voting rights by an acquirer who, together with persons acting in concert,holds 55% or more but less than 75% of the shares or voting rights in a company (or, where the companyconcerned had obtained the initial listing of its shares by making an offer of at least 10% of the issue sizeto the public pursuant to Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957 (“SCRR”),less than 90% of the shares or voting rights in the company) would require such an acquirer to make anopen offer to acquire a minimum of 20% of the shares or voting rights which it does not already own inthe company. However, if an acquisition made pursuant to an open offer results in the public shareholdingin the target company being reduced below the minimum level required under the listing agreement withthe stock exchanges, the acquirer would be required to take steps to facilitate compliance by the targetcompany with the relevant provisions of the listing agreement with the stock exchanges, within the timeperiod prescribed therein.

• In addition, regardless of whether there has been any acquisition of shares or voting rights in a company,an acquirer cannot directly or indirectly acquire control over a company (for example, by way of acquiringthe right to appoint a majority of the directors or to control the management or the policy decisions of thecompany) unless such acquirer makes a public announcement offering to acquire a minimum of 20% ofthe shares from the shares or voting rights which it does not already own in the company.

• The open offer for the acquisition of a further minimum of 20% of shares of the company or such otherpercentage as prescribed under the Takeover Code has to be made by way of a public announcementwhich must be made within four working days of entering into an agreement for the acquisition of, ordecision to acquire directly, shares or voting rights exceeding the relevant percentages of shareholding inthe company and/or control over the company.

• Unless otherwise provided in the Takeover Code, an acquirer who seeks to acquire any shares or votingrights whereby the public shareholding in the company would be reduced to a level below the limit

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specified in the listing agreement with the stock exchange for the purpose of continuous listing mayacquire such shares or voting rights only in accordance with the regulations prescribed for delisting ofsecurities by the SEBI.

The Takeover Code sets out the contents of the required public announcement as well as the minimum offerprice. The minimum offer price depends on whether the shares of the company are “frequently” or “infrequently”traded (as defined by the Takeover Code). If the shares are frequently traded, then the minimum offer pricewould be the highest of:

• the negotiated price under the agreement for the acquisition of shares in the company;

• the highest price paid by the acquirer or persons acting in concert with him for any acquisitions, includingthrough an allotment in a public, preferential or rights issue, during the 26-week period prior to the date ofpublic announcement; and

• the average of the weekly high and low of the closing prices of the shares of the company quoted on thestock exchange where the shares of the company are most frequently traded during the 26-week periodprior to the date of public announcement, or the average of the daily high and low of the closing prices ofthe shares as quoted on the stock exchange where the shares of the company are most frequently tradedduring the two weeks preceding the date of public announcement, whichever is higher.

The Takeover Code permits conditional offers and provides specific guidelines for the gradual acquisition ofshares or voting rights. Specific obligations of the acquirer and the board of directors of the target company in theoffer process have also been set out. Acquirers making a public offer are also required to deposit into an escrowaccount a prescribed percentage of the total consideration, which amount will be forfeited in the event that theacquirer does not fulfill its obligations. In addition, the Takeover Code introduces the “chain principle” by whichindirect acquisition by virtue of an acquisition of companies, whether listed or unlisted, whether in India orabroad, of a company listed in India will oblige the acquirer to make a public offer to the shareholders of eachsuch Indian company that is indirectly acquired.

The public open offer provisions of the Takeover Code do not apply, among other things, to certain specifiedacquisitions, including the acquisition of shares: (i) by allotment in a public and rights issue subject to thefulfillment of certain conditions; (ii) pursuant to an underwriting agreement; (iii) by registered stockbrokers in theordinary course of business on behalf of clients; (iv) in unlisted companies (unless such acquisition results in anindirect acquisition of shares in excess of 15% in a listed company); (v) pursuant to a scheme of reconstruction orarrangement including amalgamation or merger or demerger under any law or regulation, Indian or foreign;(vi) pursuant to an inter se transfer between promoters or group companies, subject to certain conditions;(vii) pursuant to a scheme under the Sick Industrial Companies (Special Provisions) Act, 1985 (“SICA”). TheTakeover Code does not apply to acquisitions in the ordinary course of business by public financial institutionseither on their own account or as pledgee. An application may also be filed with the SEBI seeking exemption fromthe requirements of the Takeover Code. The obligation to make an open offer also does not arise in case ofacquisition of depositary receipts so long as they are not converted into shares carrying voting rights.

Minimum Level of Public Shareholding

In order to ensure availability of floating stock of listed companies, the SEBI has recently notifiedamendments to the Listing Agreement. All listed companies are required to ensure that their minimum level ofpublic shareholding remains at or above 25%. This requirement does not apply to those companies who at thetime of their initial listing had offered at least 10% of the issue size to the public pursuant to Rule 19(2)(6) of theSCRR, nor to companies that have reached a size of 20,000,000 or more in terms of the number of listed sharesand Rs. 10,000 million or more in terms of market capitalization. However such listed companies are required tomaintain the minimum level of public shareholding at 10% of the total number of issued ordinary shares of aclass or kind for the purposes of listing. Failure to comply with this clause in the Listing Agreement requires thelisted company to delist its shares pursuant to the terms of the SEBI Delisting Guidelines and may result in penalaction being taken against the listed company pursuant to the Securities and Exchange Board of India Act, 1992.

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Insider Trading Regulations

The SEBI (Prohibition of Insider Trading) Regulations, 1992, or the Insider Trading Regulations, have beennotified by SEBI to prohibit and penalize insider trading in India. The Insider Trading Regulations prohibit“insider” dealings in the securities of a company on the basis of “unpublished price sensitive information,”communication of such information or the counsel or procurement of any other person to deal in securities on thebasis of such information. The terms “unpublished” and “price sensitive information” are defined in the InsiderTrading Regulations. The insider is also prohibited from communicating, counseling or procuring, directly orindirectly, any unpublished price sensitive information to any other person who while in possession of suchunpublished price sensitive information and is prohibited from dealing in securities while in possession of suchinformation. The Insider Trading Regulations further provide that no company shall deal in the securities ofanother company or associate of that other company while in possession of any unpublished price sensitiveinformation. SEBI has amended the Insider Trading Regulations to provide certain defences to the prohibition oncompanies in possession of unpublished price-sensitive information dealing in securities.

The Insider Trading Regulations make it compulsory for listed companies and certain other entitiesassociated with the securities market to establish an internal code of conduct to prevent insider trading and also toregulate disclosure of unpublished price-sensitive information within such entities so as to minimise misuse ofsuch information. To this end, the Insider Trading Regulations provide a model code of conduct. Further, theInsider Trading Regulations specify a model code of corporate disclosure practices to prevent insider tradingwhich must be implemented by all listed companies.

The Insider Trading Regulations require any person who holds more than 5% shares or voting rights in anylisted company to disclose to the company, the number of shares or voting rights held by such person, onbecoming such holder, within four working days of:

• the receipt of intimation of allotment of shares; or

• the acquisition of shares or voting rights, as the case may be.

On a continuing basis, any person who holds more than 5% shares or voting rights in any listed company isrequired to disclose to the company, the number of shares or voting rights held by him and change inshareholding or voting rights, even if such change results in shareholding falling below 5%, if there has beenchange in such holdings from the last disclosure made, provided such change exceeds 2% of total shareholding orvoting rights in the company. Such disclosure is required to be made within four working days of:

• the receipt of intimation of allotment of shares; or

• the acquisition or sale of shares or voting rights, as the case may be.

Derivatives (Futures And Options)

Trading in derivatives is governed by the SCRA and the SEBI Act. The SCRA was amended in February2000 and derivative contracts were included within the term “securities”, as defined by the SCRA. Trading inderivatives in India takes place either on separate and independent derivatives exchanges or on a separatesegment of an existing stock exchange. The derivative exchange or derivative segment of a stock exchangefunctions as a self regulatory organization under the supervision of the SEBI. Derivatives products have beenintroduced in a phased manner in India, starting with futures contracts in June 2000 and index options, stockoptions and stock futures in June 2000, July 2001 and November 2001, respectively.

Depositories

In August 1996, the Indian Parliament enacted the Depositories Act, 1996 which provides a legal frameworkfor the establishment of depositories to record ownership details and effectuate transfers in book-entry form. The

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SEBI framed the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996which provide for, inter alia, the registration of depositories and participants, the rights and obligations of thedepositories, participants, the issuer companies and the beneficial owners, creation of pledge of securities held indematerialised form, and procedure for dematerialisation of shares held in physical form. The depository systemhas significantly improved the operations of the Indian securities markets.

Trading of securities in book-entry form commenced towards the end of 1996. In January 1998, the SEBInotified scrips of various companies for compulsory dematerialized trading by certain categories of investorssuch as foreign institutional investors and other institutional investors. The SEBI has subsequently significantlyincreased the number of scrips in which dematerialized trading is compulsory for all investors.

Under guidelines issued by the SEBI, a company shall give the option to subscribers/shareholders to receivethe security certificates and hold securities in dematerialised form with a depositary. However, even in the caseof scrips notified for compulsory dematerialized trading, investors, other than institutional investors, arepermitted to trade in physical shares on transactions outside the stock exchange where there are no requirementsof reporting such transactions to the stock exchange, and on transactions on the stock exchange involving lots ofless than 500 securities.

Transfers of shares in book-entry form require both the seller and the purchaser of the equity shares toestablish accounts with depositary participants registered with the depositaries established under the DepositoriesAct. Charges for opening an account with a depositary participant, transaction charges for each trade andcustodian charges for securities held in each account vary depending upon the practice of each depositaryparticipant and have to be borne by the accountholder. Upon delivery, the shares shall be registered in the nameof the relevant depositary on the issuer’s books and this depositary shall enter the name of the investor in itsrecords as the beneficial owner. The transfer of beneficial ownership shall be effected through the records of thedepositary. The beneficial owner shall be entitled to all rights and benefits and be subject to all liabilities inrespect of his securities held by a depositary.

The Companies Act provides that Indian companies making any initial public offerings of securities for orin excess of Rs.100 million should issue the securities in dematerialized form.

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DESCRIPTION OF THE CARS™

The CARS™ will be issued under an Indenture, to be dated as of July 11, 2007 (the “Indenture”), to beexecuted among us, Citibank, N.A., London Branch, as Trustee Paying and Transfer Agent and ConversionAgent, and Citigroup Global Markets Deutschland AG & Co. KGaA, as Registrar. Copies of the Indenture andthe CARS™ are available for inspection during normal business hours at the offices of the Trustee, at 14th Floor,Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB. Following is a summary of certainprovisions of the CARS™ and the Indenture and is subject to, and is qualified in its entirety by reference to, theprovisions of the CARS™ and the Indenture, including the definitions of certain terms therein. Wheneverparticular sections or defined terms of the Indenture not otherwise defined herein are referred to, such sections ordefined terms are incorporated herein by reference. Copies of the Indenture will be available to any prospectiveHolder on or after the Original Issue Date (as defined herein) at the corporate office of the Trustee during normalbusiness hours.

Certain Definitions

Set forth below is a summary of certain of the defined terms used in the covenants and other provisions ofthe Indenture and the CARS™. Reference is made to the Indenture and the CARS™ for the full definition of allsuch terms, as well as any other capitalized terms used herein for which no definition is provided. Allcalculations relating to financial statement data or amounts derived from our accounting records relate to ournon-consolidated financial statements and non-consolidated accounting records.

“Accounting Principles” means accounting principles generally accepted in India.

“Affiliate” means, with respect to any Person (the “Specified Person”), any Person other than the SpecifiedPerson directly or indirectly controlling, controlled by or under direct or indirect common control with, theSpecified Person. For purposes of this definition, the term “control” when used with respect to any Person meansthe possession, directly or indirectly, of the power to direct or cause the direction of the management and policiesof such Person, whether through the ownership of voting securities or by contract or otherwise.

“Authorized Newspaper” means (i) a leading English language newspaper having general circulation inEurope (which is expected to be the Financial Times, London Edition) and (ii) so long as the CARS™ are listedon the Singapore Exchange Securities Trading Limited (the “SGX-ST”) and the rules of that exchange so require,The Strait Times or any other leading newspaper having general circulation in Singapore.

“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day onwhich banking institutions in London, England, The City of New York, United States or Mumbai, India (or, ifapplicable, in the city where the relevant Paying, Transfer or Conversion Agent is located), are authorized orobligated by law or executive order to close.

“Capital Stock” means, with respect to any Person, any and all shares, ownership interests, participation orother equivalents (however designated), including all common or ordinary stock and all preferred stock, of suchPerson.

“Certificated Securities” means the individual certificated CARS™ executed and delivered by us andauthenticated by the Registrar or the Paying Agent on its behalf, which may be delivered in exchange for theGlobal Security in the circumstances described in “— Individual Securities”.

“Closed Period” has the meaning specified in “— Conversion — Conversion Right”.

“Closing Price” means for any Trading Day (i) with respect to the QSs, the price determined by theIndependent Financial Institution as being the average of the daily selling price for an QS, (ii) with respect to theShares, the closing sales price of such Shares on the BSE on such day or, if no reported sales take place on such

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day, the average of the reported closing bid and offered prices, in either case as reported by the BSE for such day,(iii) with respect to our Capital Stock (other than the Shares and QSs), the closing bid price for such CapitalStock (other than our Shares and QSs) on any securities exchange or quotation system selected by us on whichsuch Capital Stock (other than the Shares and QSs) are quoted or traded (each a “Selected Exchange”) and(iv) with respect to the ADSs, the closing sales price of the ADSs on the New York Stock Exchange on such dayor, if no reported sales take place on such day, the average of the reported closing bid and offered prices, in eithercase as reported by the New York Stock Exchange for such day.

“Conversion Period Commencement Date” mean October 11, 2011, or if such date is not a Business Day,the next following Business Day.

“Conversion Price” means the initial Conversion Price set forth on the cover of this Offering Memorandum,as adjusted in the manner provided in “— Adjustments”.

“Conversion Price Reset Date” means the later of (i) the Business Day prior to the Conversion PeriodCommencement Date, in the event that there has been a Qualifying Issue prior to the Conversion PeriodCommencement Date or (ii) the date an issue and listing of QSs satisfies all conditions to become a QualifyingIssue.

“Conversion Reset Pricing Period” means the three month period ending on the Conversion Price ResetDate.

“Debt Instruments” means bonds, debentures, CARS™ or other similar securities of ours or any other Personwhich both:

(a) are by their terms payable, or confer a right to receive payment, in, or by reference to, any currencyother than rupees, or which are denominated in rupees and more than 50% of the aggregate principalamount thereof is initially distributed outside India by or with our authorization; and

(b) are for the time being quoted, listed, ordinarily dealt in or traded on any stock exchange orover-the-counter or other similar securities market outside India.

“Default” means any condition or event that, with the giving of notice or lapse of time or both, wouldbecome an Event of Default.

“Early Redemption Amount” means an amount that would result in a gross yield on the CARS™ of 5.60 %per annum through to the Redemption Date (computed on a semi-annual equivalent basis for the CARS™).

“Fair Market Value” means with respect to any asset, the price that could be negotiated in an arm’s lengthfree market transaction, for cash, between a willing buyer and a willing seller, neither of which is under pressureor compulsion to complete the transaction.

“Holder” means the person in whose name a CARS™ is registered in the register of CARS™.

“Indebtedness” means any obligation for the payment or repayment of money borrowed which has a finalmaturity of one year or more from its date of incurrence or issuance.

“Independent Financial Institution” means an investment bank of international repute independent to us orany of our Affiliates selected and appointed by us and approved in writing by the Trustee with all expenses ofsuch investment bank to be borne by us.

“Lien” means any pledge, mortgage, lien, charge, hypothecation, encumbrance or other security interest.

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“Market Value” means (i) in the case of the Shares, the average of the Closing Prices of the Shares for themost recent 30 consecutive Trading Days on the BSE, (ii) in the case of Capital Stock (other than the Shares andQSs) that is listed on a Selected Exchange, the average of the Closing Prices of such Capital Stock (other than theShares and QSs) for the most recent 30 consecutive Trading Days, (iii) in the case of ADSs, the average of theClosing Prices of the ADSs for the most recent 30 consecutive Trading Days on the NYSE and (iv) if the marketvalue cannot be determined pursuant to the procedures above, the market value determined by an IndependentFinancial Institution.

“Material Subsidiary” means, at any particular time, a Subsidiary:

(a) whose total assets or gross revenues are equal to or greater than 15% of our total assets or grossrevenues, as the case may be; or

(b) to which is transferred all or substantially all the assets and undertaking of a Subsidiary whichimmediately prior to such transfer is a Material Subsidiary.

Any determination as to whether a Subsidiary is a Material Subsidiary will be made by reference to the thenlatest audited accounts of such Subsidiary and us.

“Person” means any individual, limited liability company, corporation, company, firm, partnership, jointventure, tribunal, undertaking, association, organization, trust, government or political subdivision or agency orinstrumentality of a state or any other entity or organization, in each case whether or not being a separate legalentity.

“QS” means a qualifying security being a validly issued and enforceable instrument which may be in theform of:

(i) a depositary receipt issued in respect of one Share on terms similar to those applying to the ADSs butwhich provide that holders have no or differential voting rights (in comparison to the existing Shares)and have no right to withdraw the underlying Shares from the relevant depositary facility except:(a) upon our insolvency; or (b) in order to allow holders to accept an offer for all of our sharespursuant to Indian delisting regulations; or (c) in order to allow holders to accept an offer by us to buyback Shares; or (d) otherwise as set out in the relevant depositary facility;

(ii) an equity share issued by us with differential rights as to dividends and/or voting (in comparison tothe existing Shares), provided that in the case of a share with differential rights as to dividends, therights to receive dividends with respect to such share shall be at least as favorable as the right toreceive dividends with respect to our existing Shares, and provided that we obtain an opinion from anIndependent Financial Institution that in their opinion, based on the terms of the relevant share, whenissued it is reasonably likely to be purchased and sold at prices which are determined by reference tothe Shares; or

(iii) a depositary receipt issued in respect of an equity share as set forth in subsection (ii), provided that weobtain an opinion from an Independent Financial Institution that in their opinion, based on the termsof the relevant share and depositary receipt, when issued it is reasonably likely to be purchased andsold at prices which are determined by reference to the Shares.

“Qualifying Issue” means the offering and listing of QSs which in aggregate complies with the rules of aRelevant Stock Exchange and the following conditions:

(a) it is an offer of QSs for subscription for cash to no fewer that 20 institutional investors other than thecompanies which are Affiliated to us, accompanied by the grant of listing of, or permission to deal in,the QSs by the Relevant Stock Exchange and such listing is continuing;

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(b) the aggregate number of Shares underlying or related to the QSs listed and available for trading on theRelevant Stock Exchange or on an over-the-counter basis is equal to or greater than 75% of the numberof Shares which would have been issued in the event that all of the CARS™ were converted on the dayof their issue into Shares at the then current Conversion Price; and

(c) the Conversion Price, if reset based on the Closing Prices of the QSs over the three month period afterthe issue and listing of any such QSs (see “— Conversion — Conversion Right”) and which would beapplicable in the event of any conversion into QSs, would be greater than the SEBI Floor Price.

“Redemption Date” means, with respect to any CARS™, (i) the date fixed for redemption of such CARS™

pursuant to a notice of redemption given by us in accordance with the provisions of the Indenture or (ii) theMaturity Date of such CARS™ if such CARS™ has not been redeemed, repurchased and cancelled or convertedin accordance with its terms prior to the Maturity Date.

“Relevant Stock Exchange” means any one of the London Stock Exchange, the Luxembourg StockExchange, the SGX-ST, the Tokyo Stock Exchange or any other exchange that may be approved by anIndependent Financial Institution.

“SEBI Floor Price” means Rs.805.39 per Share, subject to adjustment in the manner provided in“— Adjustments”, to the extent permitted by Indian law and regulation.

“Shares” means our ordinary shares, par value Rs.10 per share.

“Subsidiary” means, at any particular time, (i) any company more than 50% of the nominal value of whoseequity share capital is then beneficially owned by us and/or by one or more of our Subsidiaries or (ii) anycompany, the composition of the board of directors of which is controlled (within the meaning of the CompaniesAct, 1956 of India, as amended) by us.

“Taxing Authority” means any government or political subdivision or any authority or agency thereof,having the legal power and authority to levy a mandatorily payable charge, assessment or tax.

“Trading Day” means (i) with respect to the QSs, a Business Day when QSs are able to be traded or quoted,provided, however, that, if no transaction price or closing bid and offered prices are publicly available in respectof the QSs then the Independent Financial Institution will at the request of the Trustee (at our cost) requestquotations from international investment banks for the sale of QSs or otherwise will determine (without havingany obligation to purchase QSs) the applicable sale price of the QSs on such Trading Day , (ii) with respect to theShares, a day when the BSE is open for business; provided, however, that, if no transaction price or closing bidand offered prices are reported by the BSE in respect of the Shares for one or more Trading Days, such day ordays will be disregarded in any relevant calculation and will be deemed not to have existed when ascertainingany period of consecutive Trading Days, (iii) with respect to our Capital Stock (other than Shares and QSs), a dayon which the Selected Exchange is open for trading or quotation; provided, however, if no bid price is reportedby the Selected Exchange in respect of such Capital Stock (other than Shares and QSs) for one or more TradingDays, such day or days will be disregarded in any relevant calculation and will be deemed not to have existedwhen ascertaining any period of Consecutive Trading Days, (iv) with respect to the ADSs, a day on which theNYSE is open for trading or quotation; provided, however, that, if no transaction price or closing bid and offeredprices are reported by the NYSE in respect of the ADSs for one or more Trading Days, such day or days will bedisregarded in any relevant calculation and will be deemed not to have existed when ascertaining any period ofconsecutive Trading Days and (v) with respect to the CARS™, a day when the SGX-ST is open for business.

“Voting Stock” means any class or classes of Capital Stock (other than QSs) pursuant to which the holdersthereof have the general voting power under ordinary circumstances to elect members of the board of directors,managers or trustees of any Person (irrespective of whether or not, at the time, stock of any other class or classesshall have, or might have voting power by reason of the happening of any contingency).

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General

Except in the limited circumstances set forth under “— Individual Securities”, the CARS™ will only beissued in book-entry form. Accordingly, the following description of the CARS™ which makes reference toCertificated Securities should be read in conjunction with the information set forth under “— CARS™;Denomination, Delivery and Form”.

The aggregate principal amount of CARS™ to be issued on July 11, 2007 (the “Original Issue Date”) will belimited to US$490,000,000. The CARS™ will be redeemed on July 12, 2012 (the “Maturity Date”) unlesspreviously redeemed, repurchased and cancelled, or converted pursuant to the terms thereof and of the Indenture.The CARS™ will not bear any interest.

Payments of principal of the CARS™ will be made to the registered holder thereof in immediately availablefunds. Any payments of principal of the CARS™ scheduled to be made on a date that is not a Business Day neednot be made on such date, but may be made on the next succeeding Business Day with the same force and effectas if made on such date.

Each CARS™ will be convertible, subject to certain limitations and compliance with certain conditions andprocedures (see “— Conversion — Conversion Right” and “— Procedures; Conversion Notice; Taxes andDuties”) (i) in the event that there has been a Qualifying Issue of QSs, into QSs, or (ii) in the event that there hasbeen a Qualifying Issue of QSs but we notify Holders that CARS™ are no longer convertible into QSs, intoShares or ADSs (each ADS currently representing one Share) at their election or (iii) in the event that there hasnot been a Qualifying Issue of QSs, at the Holder’s election into Shares or ADSs. A Holder may convert hisCARS™ on any Business Day during the period (the “Conversion Period”) commencing on the ConversionPeriod Commencement Date and ending at the close of business in the location of the applicable ConversionAgent on June 12, 2012 (30 days prior to the Maturity Date) or, if such CARS™ shall have been called forredemption prior to July 12, 2012 then up to the close of business (being 3:00 p.m., at the place aforesaid) on theseventh day prior to the date fixed for redemption thereof (or if such day shall not be a Business Day at suchplace, on the immediately preceding Business Day at such place. The Conversion Period will not include anyClosed Period.

The Conversion Right and the Change of Control Conversion Right (each as defined herein) during anyClosed Period shall be suspended and the Conversion Period and Right of Control Conversion Period shall notinclude any Closed Period. Holders that deliver a Conversion Notice during a Closed Period will not be permittedto convert their CARS™ until the Trading Day following the last day of that Closed Period, which (if all otherconditions to conversion have been fulfilled) will be the Deposit Date for such CARS™.

The principal of the CARS™ will be payable by us in US dollars pursuant to the terms of the CARS™ andthe Indenture, and the CARS™ may be presented for payment, registration of transfer or conversion at our officeor agency maintained for such purpose (the “Paying Agent”, “Transfer Agent” or “Conversion Agent”,respectively), located (i) in London (which initially will be the administration office of the Conversion Agent,currently located at 21st Floor, Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB), (ii) as longas the CARS™ are listed on the SGX-ST, and the rules of that exchange so require, in Singapore (iii) in aEuropean Union member state that will not be obliged to withhold or deduct tax pursuant to a directive or anylaw implementing or complying with, or introduced in order to conform to, such directive and (iv) in each otherplace where the principal and premium on the CARS™ is payable.

We reserve the right, subject to the provisions of the Indenture, at any time to vary or terminate theappointment of any Paying Agent, Transfer Agent or Conversion Agent and to appoint further or other PayingAgents, Transfer Agents and Conversion Agents, provided that we will at all times maintain Paying Agentshaving offices in London and Singapore (as long as the CARS™ are listed on the SGX-ST and the rules of thatexchange so require). Notice of any such termination or appointment and of any changes in the specified offices

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of the Paying Agents, Transfer Agents or Conversion Agents will be given promptly by us to the Trustee inaccordance with the notice provisions of the Indenture as described below under “— Notices”.

We and our Affiliates may at any time, subject to applicable law, purchase CARS™ in the open market, orotherwise, at any price. A CARS™ does not cease to be outstanding because we or an Affiliate hold suchCARS™; provided, however, that in determining whether the Holders of the requisite principal amount ofCARS™ have given or concurred in any request, demand, authorization, direction, notice, consent or waiverunder the Indenture, CARS™ owned by us or any of our Affiliates shall be disregarded and deemed not to beoutstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request,demand, authorization, direction, notice, consent or waiver, only CARS™ for which the Trustee has actuallyreceived written notice from us shall be so disregarded.

Ranking

The CARS™ will constitute our direct, unsecured and unsubordinated obligations ranking pari passu amongthemselves, without any preference of one over the other by reason of priority of date of issue or otherwise, andequally with all of our other unsecured and unsubordinated indebtedness.

CARS™; Denomination, Delivery and Form

The CARS™ will be initially in the form of one global security (the “Global Security”), registered in thename of Citivic Nominees Limited as nominee of, and deposited with, Citibank, N.A., a common depositary forEuroclear and Clearstream, Luxembourg. The CARS™ will be denominated in principal amounts of US$100,000and in integral multiples of US$100,000 in excess thereof.

Except as set forth below under “— Individual Securities”, investors may hold their interest in the CARS™

only through the Global Security.

In the event Certificated Securities are to be issued in respect of the CARS™ pursuant to the Indenture, wewill give notice of this to the Holders. This notice will be given by mail and by publication in an AuthorizedNewspaper and shall specify, among other things, the procedures for receiving individual CARS™ and forreceiving payments and exercising Conversion Rights in respect of the CARS™ in definitive form.

The CARS™ are not deliverable in bearer form.

Additional Amounts

All payments of principal and premium, by us in respect of the CARS™ and all issuance and deliveries ofQSs, Shares or ADSs made upon conversion of the CARS™ are to be made free and clear of, and withoutwithholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmentalcharges of whatever nature (“Taxes”) imposed or levied by or on behalf of India or any Taxing Authority thereinor thereof, unless the withholding or deduction of such Taxes is required by law. In that event, we will pay suchadditional amounts (“Additional Amounts”) as may be necessary in order that the net amounts received by theholders of the CARS™ after such withholding or deduction shall equal the respective amounts of principal andpremium, which would have been receivable in respect of the CARS™ in the absence of such withholding ordeduction, except that no such Additional Amounts shall be payable in respect of any CARS™:

(i) to or on behalf of a Holder or beneficial owner (or between a fiduciary, settlor, beneficiary, memberor shareholder of, or possessor of power over, the Holder or beneficial owner, if the Holder is anestate, trust, nominee, partnership or corporation) who is subject to such Taxes, by reason of having(or by reason of a fiduciary, settlor, beneficiary, member or shareholder of such Holder having, orhaving had) some present or former connection with India otherwise than by reason only of theholding of any CARS™ or the receipt of principal in respect of any CARS™;

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(ii) to or on behalf of a Holder or beneficial owner who would not be liable for or subject to suchdeduction or withholding by (a) making an accurate declaration of non-residence or other appropriateclaim for exemption to the relevant Tax Authority or (b) complying with any certification,identification, information, documentation or other reporting requirement concerning the nationality,residence, identity or connection with the relevant Tax Authority of such Holder or beneficial owner(provided that such declaration of non-residence or other claim or filing for exemption or suchcompliance is required by the applicable law of the relevant Tax Authority as a precondition toexemption from, or reduction in the rate of imposition, deduction or withholding of, such Taxes);

(iii) to or on behalf of a Holder or beneficial owner who presents such CARS™ (where presentation isrequired) for payment more than 30 days after the Relevant Date except to the extent that the Holderor beneficial owner thereof would have been entitled to such Additional Amounts on presenting thesame for payment on the last day of such 30-day period;

(iv) to any Holder that is a fiduciary or partnership or any person other than the sole beneficial owner ofsuch payment or CARS™, to the extent that a beneficiary or settlor with respect to such fiduciary, amember of such a partnership or the beneficial owner of such payment or CARS™ would not havebeen entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial ownerbeen the actual Holder;

(v) in respect of any withholding or deduction imposed on a payment that is made pursuant to theEuropean Union Directive on the taxation of savings implementing the conclusions of the EuropeanCouncil of Economic and Finance Ministers (ECOFIN) meeting on June 3, 2003, or any lawimplementing or complying with, or introduced in order to conform to, such Directive;

(vi) in respect of any withholding or deduction that is imposed on a CARS™ presented for payment by oron behalf of a Holder who would have been able to avoid such withholding or deduction bypresenting such CARS™ to another paying agent in a member state of the European Union if theHolder is a resident in the European Union, or to another paying agent in the United States if theHolder is a resident in the United States; or

(vii) any combination of (i) through (vi) above.

We have the sole obligation for determining if and when any Additional Amounts are payable hereunder.

The obligation to pay Taxes shall not apply to (a) any estate, inheritance, gift, sales, transfer, personalproperty or any similar Taxes or (b) any Taxes which is payable otherwise than by deduction or withholdingfrom payments of principal on the CARS™; provided that, except as otherwise set forth in the CARS™ and in theIndenture, we will pay all stamp and other duties, if any, which may be imposed by India, the United States orany respective political subdivision thereof or any taxing authority of or in the foregoing, with respect to theIndenture or as a consequence of the initial issuance of the CARS™.

As used herein, the “Relevant Date” means the date on which such payment first becomes due, except that,if the amount of monies payable has not been received in London by the Trustee on or prior to such date, itmeans the date on which, the full amount of such monies having been so received, notice to that effect shall havebeen duly given to the holders of the CARS™.

Unless the context otherwise requires, any reference in the CARS™ and in this Offering Memorandum toprincipal shall be deemed also to refer to any Additional Amounts which may be payable as described above.

Redemption of CARS™ at Our Option

At any time after October 11, 2011 but prior to the Maturity Date, the CARS™ may be redeemed for cash atour option, and subject to relevant Indian laws and regulations, in whole but not in part, upon not less than 30 normore than 60 days’ notice to the Holders (which notice shall be irrevocable), at a redemption price equal to theEarly Redemption Amount, including any Additional Amounts, provided, that prior to the date on which the

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notice of redemption is given by us, less than 10% in aggregate principal amount of the CARS™ originally issuedis outstanding. Upon the expiry of any such notice, we will be bound to redeem the CARS™ at their EarlyRedemption Amount on the date fixed for redemption.

Redemption for Taxation Reasons

The CARS™ may be redeemed for cash at our option, and subject to relevant Indian laws and regulations, inwhole but not in part, upon not less than 30 nor more than 60 days’ notice to the Holders (which notice shall beirrevocable), at any time, at a redemption price equal to the Early Redemption Amount on the Redemption Date,including any Additional Amounts, if, as a result of any change in or amendment to the laws of India (or of anypolitical subdivision or taxing authority thereof or therein) or any regulations or rulings promulgated thereunderor any change in the official interpretation or official application of such laws, regulations or rulings, or anychange in the official application or interpretation of, or any execution of or amendments to, any treaty or treatiesaffecting taxation to which India (or such political subdivision or taxing authority) is a party, which change,amendment or treaty becomes effective on or after the date of this Offering Memorandum, we are or would berequired on the Maturity Date to pay Additional Amounts not currently payable with respect to the CARS™, andsuch obligation cannot be avoided by the use of reasonable measures available to us. Prior to any redemption ofthe CARS™, we will deliver to the Trustee a certificate signed by two directors stating the obligation referred toabove cannot be avoided by taking reasonable measures available to us and an opinion of independentinternationally recognized legal or tax advisors to the effect that such change or amendment has occurred(irrespective of whether such amendment or change is then effective), and the Trustee shall be entitled to acceptsuch certificate and opinion as sufficient evidence thereof which shall be conclusive and binding on the Holders.We have agreed in the Purchase Agreement to use our best efforts to obtain all authorizations, consents andapprovals, governmental or otherwise, necessary to exempt payments on the CARS™ in US dollars from Indianwithholding taxes in effect as of the date of this Offering Memorandum.

Redemption at Maturity

Unless the CARS™ have been previously redeemed, repurchased and cancelled or converted, we willredeem the CARS™ on the Maturity Date at a redemption price equal to 131.82% of the outstanding principalamount thereof together with any Additional Amounts. The CARS™ may be redeemed prior to the Maturity Dateonly as described herein.

Redemption Procedures

Provided that we obtain all approvals required by law and the Trustee or the Paying Agent receives thenotice of redemption (together with any necessary endorsements), payment of the relevant redemption price forany CARS™ will be made on the Redemption Date or, if such CARS™ is a Certificated Security and has not beenso delivered on or prior to the Redemption Date, at the time of delivery of such CARS™ to the Trustee or anyPaying Agent. If the Trustee or relevant Paying Agent holds, in accordance with the terms of the Indenture, cashsufficient to pay the relevant redemption price of such CARS™ on the Redemption Date, then, immediately aftersuch Redemption Date, whether or not such CARS™ is delivered to a Paying Agent or Transfer Agent, suchCARS™ will cease to be outstanding, such CARS™ will be deemed to be paid, and all other rights of the Holdershall terminate (other than the right to receive the relevant redemption price).

In the case of any redemption other than on the Maturity Date, the notice of redemption to each Holder shallspecify, among other things, the Redemption Date, the price at which such CARS™ will be redeemed and theplace or places of payment and that payment will be made upon presentation and surrender of the CARS™ to beredeemed. Such notice shall also specify the Conversion Price then in effect and the date on which the right toconvert such CARS™ will expire.

Under current RBI regulations applicable to convertible alternative reference securities, we are required toobtain the prior approval of the RBI before effecting any repurchase or redemption of the CARS™ prior to theMaturity Date.

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Repurchase of CARS™ in the Event of Delisting

To the extent permitted by applicable law, in the event that the Shares cease to be listed or admitted totrading on the BSE and the NSE (a “Delisting”), we will, within 10 Business Days after the Delisting, notify theHolders of such Delisting (with a copy to the Trustee), and each Holder shall have the right (the “DelistingRepurchase Right”), at such Holder’s option, to require us to repurchase all (or any portion of the principalamount thereof which is US$100,000 or any integral multiple thereof) of such Holder’s CARS™ at a price equalto the Early Redemption Amount, on the Delisting Repurchase Date (the “Delisting Repurchase Price”) on thedate set by us for such repurchase (the “Delisting Repurchase Date”), which shall be not less than 30 days normore than 60 days following the date on which we notify the Holders of the Delisting (with a copy to theTrustee).

Repurchase of CARS™ in the Event of Change of Control

To the extent permitted by applicable law, if a Change of Control, as defined below, occurs with respect tous, each Holder shall have the right (the “Change of Control Repurchase Right”), at such Holder’s option, torequire us to repurchase all (or any portion of the principal amount thereof which is US$100,000 or any integralmultiple thereof) of such Holder’s CARS™ on the date set by us for such repurchase (the “Change of ControlRepurchase Date”), which shall be not less than 30 days nor more than 60 days following the date on which wenotify the Holders of the Change in Control (with a copy to the Trustee), at the Early Redemption Amounttogether with any Additional Amounts on the Change of Control Repurchase Date (the “Change of ControlRepurchase Price”).

The definitions of certain terms used in this section are listed below:

The term “Control” means the right to appoint and/or remove all or the majority of the members of ourBoard of Directors or other governing body, whether obtained directly or indirectly, and whether obtained byownership of share capital, the possession of voting rights, contract or otherwise.

A “Change of Control” occurs when:

(1) any person or persons (as defined below) acting together acquires Control of us if such person orpersons does not or do not have, and would not be deemed to have, Control of us on the Closing Date;

(2) we consolidate with or merge into or sell or transfer all or substantially all of our assets to any otherperson, unless the consolidation, merger, sale or transfer will not result in the other person or personsacquiring Control over us or the successor entity; or

(3) one or more other persons acquires the legal or beneficial ownership of all or substantially all of ourVoting Stock.

However, a Change of Control will not be deemed to have occurred solely as a result of the issuance ortransfer, with our cooperation, of any preferred shares in our capital.

For the purposes of the Change of Control Repurchase Right and the Change of Control Conversion Right(as defined below), a “person” includes any individual, company, corporation, firm, partnership, joint venture,undertaking, association, organization, trust, state or agency of a state, in each case whether or not being aseparate legal entity. A “person” does not include our Board of Directors or any other governing board and doesnot include our subsidiaries or Affiliates immediately before the time of the Change of Control unless the entryby such subsidiaries or affiliates into transactions described in clause (1), (2) or (3) above in this definition of“Change of Control” would result in a company which is not such an Affiliate of ours being able to change themajority of the members of our Board of Directors.

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Repurchase Procedures

Promptly after becoming aware of, and in any event within 10 days after, a Delisting or a Change ofControl, we will provide to each Holder and, for so long as the CARS™ are listed on the SGX-ST, and the rulesof such exchange so require, to publish in an Authorized Newspaper as well as through Euroclear andClearstream, a notice regarding such Delisting Repurchase Right or Change of Control Repurchase Right, as thecase may be, which notice shall state, as appropriate:

(i) the Delisting Repurchase Date or the Change of Control Repurchase Date, as the case may be (each, a“Purchase Date”);

(ii) in the case of a Delisting, the date of such Delisting and, briefly, the events causing such Delisting;

(iii) in the case of a Change of Control, the date of such Change of Control and, briefly, the events causingsuch Change of Control;

(iv) the date by which the Holder Purchase Notice (as defined below) must be given;

(v) the Delisting Repurchase Price or the Change of Control Repurchase Price, as the case may be, andthe method by which such amount will be paid;

(vi) the names and addresses of all Paying Agents;

(vii) briefly, the Conversion Right (as defined below) of the Holders and the then current applicableConversion Price;

(viii) the procedures that Holders must follow and the requirements that Holders must satisfy in order toexercise the Delisting Repurchase Right or Change of Control Repurchase Right, as the case may be,or the Conversion Right; and

(ix) that a Holder Purchase Notice, once validly given, may not be withdrawn.

To exercise its right to require us to purchase its CARS™, pursuant to the Delisting Repurchase Right or theChange of Control Repurchase Right, as the case may be, the Holder must deliver a written irrevocable notice ofthe exercise of such right (a “Holder Purchase Notice”) to any Paying Agent on any Business Day prior to theclose of business (being 3:00 p.m.) at the location of such Paying Agent on such day and which day is not lessthan 20 Business Days prior to the Purchase Date.

Payment of the Delisting Repurchase Price upon exercise of the Delisting Repurchase Right or payment ofthe Change of Control Repurchase Price upon exercise of the Change of Control Repurchase Right, for anyCertificated Security for which a Holder Purchase Notice has been delivered is conditioned upon delivery of suchCertificated Security (together with any necessary endorsements) to any Paying Agent on any Business Daytogether with the delivery of such Holder Purchase Notice and will be made promptly following the later of thePurchase Date and the time of delivery of such Certificated Security. If the Paying Agent holds on the PurchaseDate money sufficient to pay the Delisting Repurchase Price or the Change of Control Repurchase Price, as thecase may be, of CARS™ for which Holder Purchase Notices have been delivered in accordance with theprovisions of the Indenture, then, whether or not such CARS™ is delivered to the Paying Agent, on and after suchPurchase Date, (i) such CARS™ will cease to be outstanding; (ii) such CARS™ will be deemed paid; and (iii) allother rights of the Holder shall terminate (other than the right to receive the Delisting Repurchase Price or theChange of Control Repurchase Price, as the case may be).

Certain Covenants

Limitation on Liens

So long as any of the CARS™ remain outstanding (as defined in the Indenture), we will not, and willprocure that none of our Material Subsidiaries will, create or permit to subsist any Liens for the benefit of the

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holders of any Debt Instruments upon the whole or any part of our or, as the case may be, any such MaterialSubsidiary’s property or assets, present or future, to secure:

(i) payment of any sum due in respect of any Debt Instruments;

(ii) any payment under any guarantee of any Debt Instruments; or

(iii) any indemnity or other like obligation in respect of any Debt Instruments, without in any such case atthe same time according to the CARS™ the same security as is granted to or is outstanding in respectof such Debt Instruments or such guarantee, indemnity or other like obligation or such other securityas shall be approved by the holders of the CARS™.

Consolidation, Merger and Sale of Assets

We may, without the consent of the holders of any of the CARS™, consolidate with, or merge into, or sell,transfer, lease or convey our assets substantially as an entirety to any other entity organized and existing underthe laws of India, provided that (i) any successor entity expressly assumes our obligations under the CARS™ andIndenture, (ii) after giving effect to the transaction, no Event of Default (as defined below) and no event which,after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing,and (iii) certain other conditions specified in the CARS™ are satisfied.

Conversion

Conversion Right

Each Holder will have the right (the “Conversion Right”) during the Conversion Period and the Change ofControl Conversion Right during the Change of Control Conversion Period (as defined below) to convert itsCARS™, in whole or in part (being US$100,000 in principal amount or an integral multiple thereof), at the optionof such converting Holder, upon delivery of an irrevocable notice (the “Conversion Notice”) together with theCARS™ at the office of the Conversion Agent, on any Business Day prior to the close of business (being 3:00p.m.) at the location of the Conversion Agent to which such Conversion Notice is delivered,

(i) in the event that there has been a Qualifying Issue of QSs, into QSs; or

(ii) in the event that there has been a Qualifying Issue of QSs but we notify Holders that CARS™ are nolonger convertible into QSs, into Shares or ADSs at their election; or

(iii) in the event that there has not been a Qualifying Issue of QSs, at the Holder’s election into Shares orADSs,

provided, however, that the Conversion Right and the Change of Control Conversion Right during any ClosedPeriod (as defined below) shall be suspended and the Conversion Period and the Change of Control ConversionPeriod shall not include any such Closed Period. “Closed Period” means the periods of (i) 20 days prior to thedate of our annual general shareholders’ meeting, (ii) 30 days prior to an extraordinary shareholders’ meeting,(iii) from the date that we notify the BSE of the record date for determination of shareholders entitled to receiptof dividends, subscription of shares due to capital increase or other benefits, to the record date for the distributionor allocation of the relevant dividends, rights and benefits or (iv) such other periods determined by Indian lawapplicable from time to time that we are required to close our stock transfer books. We will give notice of suchClosed Period to the Trustee, the Holders and the Conversion Agent in accordance with the provisions of theIndenture. The Holder’s election to receive ADSs on conversion will be subject to compliance with the terms andconditions of the Deposit Agreement or such other depositary facility which may be established from time totime and in accordance with applicable law.

The number of QSs, Shares or ADSs to be delivered upon conversion will be determined by dividing theaggregate principal amount of all the CARS™ to be converted by such Holder (translated into rupees at the fixed

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exchange rate of Rs.40.59 = US$1.00 (the “Fixed Exchange Rate”)) by the applicable Conversion Price in effecton the Conversion Date, and in the case of conversion for ADSs, dividing such quotient by the number of Sharesrepresented by each ADS on the Conversion Date and in the case of conversion for QSs, making suchadjustments as may be required to relate to one Share. As of the date of this Offering Memorandum, each ADSrepresents one Share. Fractions of QSs, Shares or ADSs will not be issued on conversion, and no cashadjustments will be made in respect of any such fraction. These fractions will be forfeited upon conversion.

In the event that there has been a Qualifying Issue of QSs and only for the purposes of conversion into QSsin accordance with paragraph (i) above, the Conversion Price for conversion into QSs will be reset with effectfrom the Conversion Price Reset Date in accordance with the following formula:

NCP = CP x [QSRP/SRP]

where

“CP” is the then current Conversion Price

“NCP” is the reset Conversion Price.

“QSRP” is the average Closing Price of the QSs over the Conversion Reset Pricing Period translated intoRupees at the Prevailing Rate.

“SRP” is the Market Value of the Shares over the Conversion Reset Pricing Period.

Following any such reset in relation to the Conversion Price applicable to conversions into QSs, the resetConversion Price shall be subject to Antidilution Adjustment at all times in accordance with “Adjustments”below.

In the event that there has been a Qualifying Issue but, in accordance with paragraph (ii) above we notifyHolders that CARS™ are only convertible into Shares or ADSs, the Conversion Price shall not be so reset (andany prior reset shall be reversed) so that the then current Conversion Price will be the initial Conversion Price asadjusted in accordance with “Adjustments” below. The Conversion Price shall be subject to AntidilutionAdjustment at all times.

In the event that a Change of Control has occurred the Conversion Rights of the Holders (the “Change ofControl Conversion Right”) will be effective from the date of the Change of Control and ending at the close ofbusiness in the location of the applicable Conversion Agent on June 12, 2012 (30 days prior to the Maturity Date)or, if such CARS™ shall have been called for redemption prior to July 12, 2012 then up to the close of business(being 3:00 p.m., at the place aforesaid) on the seventh day prior to the date fixed for redemption thereof (or ifsuch day shall not be a Business Day at such place, on the immediately preceding Business Day at such place)(the “Change of Control Conversion Period”). The Change of Control Conversion Period will not include anyClosed Period. Holders exercising the Change of Control Conversion Right may convert their CARS™ intoShares or at their election ADSs during the Change of Control Conversion Period.

Delivery of QSs upon Conversion

Upon exercise by a Holder of its Conversion Right for QSs, we will deliver or procure the delivery within40 days of the Conversion Date QSs to or to the order of the converting Holder to the account or accountsspecified in the relevant Conversion Notice. The depositary’s delivery to the account or to the order of aconverting Holder of such QSs will be deemed to satisfy our obligation to pay the principal and premium on suchCARS™.

In the event that the QSs are in the form of depositary receipts we will, as soon as practicable, but in noevent more than 40 days after the Conversion Date, deliver to the custodian under the deposit agreementconstituting such QSs a sufficient number of Shares or other equity shares (with differential rights as to dividends

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and/or voting) to represent the QSs such Holder is entitled to receive upon conversion. Such Shares or otherequity shares will be registered in the name of the depositary or its nominee and deposited in accordance with theterms of the deposit agreement constituting such QSs. We agree to take all such action and obtain all suchapprovals necessary in order for such QSs to be issued against deposits of Shares or other equity shares in thedepositary facility.

Converting Holders are also hereby notified that in the event that the QSs are in the form of depositaryreceipts under the terms and conditions of the deposit agreement constituting such QSs, the converting Holderwill be required to comply with all applicable requirements relating to deposits of Shares or other equity sharesunder the deposit agreement constituting such QSs and that there will be restrictions on voting rights and theability of the holder of such QSs in depositary receipt form to exchange their receipts for Shares or other equityshares. We will procure that on receipt by any depositary from such Holder of any applicable QS issuance feesand applicable written acknowledgements, certifications and agreements, the depositary shall deliver theapplicable QSs in depositary receipt form to the account or to the order of the converting Holder.

We will also procure that application will be made to have the QSs issued upon conversion of the CARS™

listed on the Relevant Stock Exchange.

Delivery of Shares upon Conversion

A Holder who is permitted to and exercises its Conversion Right for Shares will be required to open adepository account with a depositary participant under the Depositories Act (Act 22), 1996 of India for thepurposes of receiving the Shares. Upon exercise by a Holder of its Conversion Right for Shares, we will, as soonas practicable, and in any event not later than 40 days after the Conversion Date cause the relevant securitiesaccount of the holder(s) of the Shares or of his/their nominee, to be credited with such number of the relevantShares on or with effect from the relevant Conversion Date and shall further cause the name of the holder(s) orhis/their nominee to be registered accordingly, in the record of the depositors, maintained by the depositoryregistered under the Depositories Act (Act 22), 1996 of India, with whom we have entered into a depositoryagreement.

Converting Holders will be deemed to have acknowledged, represented and agreed not to transfer suchShares otherwise than in compliance with the transfer restrictions applicable to the CARS™, mutatis mutandis.See “Transfer Restrictions on the CARS™”. The Shares issued upon conversion of the CARS™ are expected tobe listed on the BSE, the NSE and any other stock exchanges in India on which the Shares are listed from time totime, and will be tradable on such stock exchanges once listed, which is expected to occur within 40 days fromthe date of issue of such Shares and, in any event, prior to the date the Shares are delivered to ConvertingHolders.

Delivery of ADSs upon Conversion

Upon exercise by an entitled Holder of its Conversion Right for ADSs, we will deliver, as soon aspracticable, but in no event more than 40 days after the Conversion Date, to the Custodian under the DepositAgreement a sufficient number of Shares to represent the ADSs such Holder is entitled to receive uponconversion. Such Shares will be registered in the name of the Depositary or its nominee and deposited inaccordance with the terms of the Deposit Agreement.

We agree to take all such action and obtain all such approvals necessary in order for such ADSs to be issuedagainst deposits of Shares in the depositary facility.

Converting Holders are also hereby notified that under the terms and conditions of the Deposit Agreement,the converting Holder will be required to comply with all applicable requirements relating to deposits of Sharesunder the Deposit Agreement as described under “Description of the American Depositary Shares — Issuance ofADSs upon Deposit of Shares”.

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Upon delivery to and deposit with the Custodian of a sufficient number of Shares underlying the ADSs towhich such Holder is entitled upon conversion, and receipt by the Depositary from such Holder of the applicableADS issuance fees and applicable written acknowledgements, certifications and agreements, the Depositary shall,pursuant to the terms of the Deposit Agreement, deliver the applicable ADSs to the account or to the order of theconverting Holder. The Depositary’s delivery to the account or to the order of a converting Holder of such ADSswill be deemed to satisfy our obligation to pay the principal on such CARS™.

Application will be made to have the ADSs issued upon conversion of the CARS™ listed on the New YorkStock Exchange. The Shares represented by such ADSs are expected to be listed on the BSE, the NSE and anyother stock exchanges in India on which the Shares are listed from time to time, and will be tradable on suchstock exchanges once listed thereon, which is expected to occur within 40 days after the issuance of such Sharesand, in any event, prior to the date of the delivery of the Shares represented by ADSs issued upon conversion ofthe CARS™ to the Custodian under the Deposit Agreement.

Procedures; Conversion Notice; Taxes and Duties

Holders should note that the exercise of the Conversion Right is subject not only to the provisions of theCARS™ and the Indenture, but also to applicable Indian laws and regulations.

In order to effect a conversion, a converting Holder must deliver at such Holder’s expense during theConversion Period at the office of the Conversion Agent the CARS™ to be converted, and any certificates andother documents as may be required under the laws of the Republic of India or the jurisdiction in which the officeof the Conversion Agent is located or the Deposit Agreement and any expenses or other payments required to bepaid by the Holder pursuant to the terms of the Indenture and CARS™. In addition, a converting Holder mustcomplete, execute and deliver at such Holder’s expense, a Conversion Notice (in duplicate) at the office of theConversion Agent between 9 a.m. and 3 p.m. on any Business Day at the location of the Conversion Agentduring the applicable Conversion Period. A Conversion Notice delivered outside the hours specified above or ona day which is not a Business Day at the office of the relevant Conversion Agent shall for all purposes be deemedto have been delivered to that Conversion Agent between 9 a.m. and 3 p.m. on the next Business Day.

A Conversion Notice once so delivered shall be irrevocable and may not be withdrawn without our consentin writing. Holders that deposit a Conversion Notice during a Closed Period will not be permitted to convert theirCARS™ until the Trading Day following the last day of that Closed Period which (if all other conditions toconversion have been fulfilled) will be the Conversion Date for such CARS™. The price at which such CARS™

will be converted will be the applicable Conversion Price in effect on the Conversion Date.

As conditions precedent to conversion, a converting Holder must pay (i) to the relevant authorities or theapplicable Conversion Agent all stamp, issue, registration and similar taxes and duties (if any) arising onconversion in the country in which the CARS™ is deposited for conversion, or payable in any jurisdiction (otherthan any taxes or stamp duties payable in India by us in respect of the allotment, issue and delivery of Shares andlisting of the Shares on the Indian stock exchanges on conversion or costs associated with the issue and deliveryof any QSs), (ii) to the Depositary the issuance fee of the Depositary consequent upon the delivery of ADSs and(iii) the costs associated with the delivery of any other property or cash upon conversion to or to the order of aperson other than the converting Holder. A converting Holder must pay all, if any, taxes arising by reference toany disposal or deemed disposal of a CARS™ in connection with such conversion. Except as aforesaid, we willpay the expenses arising in India on the delivery of ADSs on conversion of CARS™ and all charges of theDepositary and the Conversion Agent and the Transfer Agent for the Shares in connection therewith as providedin the Indenture. The date on which any CARS™ and the Conversion Notice (in duplicate) relating thereto,together with any certificates and other documents as may be required under applicable law or the DepositAgreement are deposited with us and accepted by a Conversion Agent and the payments, if any, required to bepaid by the Holder are made is hereinafter referred to as the “Deposit Date”. The “Conversion Date” applicableto a CARS™ shall mean the Business Day following the Deposit Date, which day, in order to ensure conversion

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within a specified applicable Conversion Period, must be a Trading Day and must fall within the applicableConversion Period. The converting Holder must therefore satisfy all such conditions on or before the BusinessDay prior to the end of the applicable Conversion Period.

On the Conversion Date, we will register the Depositary (or its nominee), in our register of shareholders asthe owner of the Shares representing any ADSs to be delivered upon conversion of such CARS™ and, subject toany applicable limitations then imposed by Indian laws and regulations, according to the request made in therelevant Conversion Notice, procure that, within 40 Trading Days after the Conversion Date, there be deliveredto the custodian under the Deposit Agreement a certificate or certificates for the relevant Shares, registered in thename of the Depositary or its nominee, together with any other property or cash required to be delivered uponconversion and such assignments and other documents (if any) as may be required by law to effect the deliverythereof.

Adjustments

Antidilution. The Conversion Price will be subject to adjustment (“Antidilution Adjustment”) in thecircumstances described below. Following a Qualifying Issue all references in this section to Shares shall bedeemed to be references to QSs with such changes as the Trustee may approve, based on the advice of anIndependent Financial Institution, and notified to Holders in order to provide Antidilution protection for therelevant QSs.

(i) If we issue Shares as a dividend in Shares or make a distribution of Shares which is treated as acapitalization issue for accounting purposes under Indian GAAP (including but not limited tocapitalization of capital reserves and employee stock bonus), then the Conversion Price in effect whensuch dividend and/or distribution is declared (or, if we have fixed a prior record date for thedetermination of shareholders entitled to receive such dividend and/or distribution, on such record date)shall be adjusted in accordance with the following formula:

NCP = OCP x [N / (N+n)]

where:

NCP = the Conversion Price after such adjustment.

OCP = the Conversion Price before such adjustment.

N = the number of Shares outstanding, at the time of issuance of such dividend and/or distribution (orat the close of business in Mumbai on such record date as the case may be).

n = the number of Shares to be distributed to the shareholders as a dividend and/or distribution.

(ii) If we (a) subdivide our outstanding Shares, (b) combine our outstanding Shares into a smaller numberof Shares, or (c) re-classify any of our Shares into any other of our securities, then the ConversionPrice shall be appropriately adjusted so that the holder of any CARS™, in respect of the ConversionDate which occurs on or after the coming into effect of the adjustment described in this subsection (ii),shall be entitled to receive the number of our Shares and/or other securities which such Holder wouldhave held or have been entitled to receive after the happening of any of the events described abovehad such CARS™ been converted immediately prior the happening of such event (or, if we have fixeda prior record date for the determination of shareholders entitled to receive any such securities issuedupon any such subdivision, combination or reclassification, immediately prior to such record date),but without prejudice to the effect of any other adjustment to the Conversion Price made with effectfrom the date of the happening of such event (or such record date) or any time thereafter.

(iii) If we grant, issue or offer to all or substantially all of the holders of Shares as a class rights entitlingthem to subscribe for or purchase Shares, which expression shall include those Shares that arerequired to be offered to employees and persons other than shareholders in connection with such

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grant, issue or offer, at a consideration per Share receivable by us which is fixed on or prior theex-rights date mentioned below and is less than the Market Value per Share on such date then theConversion Price in effect on the day preceding that ex-rights date shall be adjusted in accordancewith the following formula:

NCP = OCP x [(N+v) / (N+n)]

where:

NCP and OCP have the meanings ascribed thereto in subsection (i) above.

N = the number of Shares outstanding, at the close of business in Mumbai on such ex-rights date.

n = the number of Shares to be issued upon exercise of such rights at such consideration.

v = the number of Shares which the aggregate consideration receivable by us would purchase at suchMarket Value.

The “ex-rights” date is the date when the price of our Shares as quoted on the BSE is adjusted toreflect such grant, issue or offer.

Subject as provided below, such adjustment shall become effective immediately after the latest datefor the submission of applications for such Shares by shareholders entitled to the same pursuant tosuch rights or (if later) immediately after we fix such consideration but retroactively to immediatelyafter the ex-rights date mentioned above.

If, in connection with a grant, issue or offer to the holders of Shares of rights entitling them tosubscribe for or purchase Shares, any Shares which are not subscribed for or purchased by the personsentitled thereto are purchased by other persons after the latest date for the submission of applicationsfor such Shares, an adjustment shall be made to the Conversion Price in accordance with the aboveprovisions which shall become effective immediately after the date we receive the consideration infull from such other persons but retroactively to immediately after the ex-rights date mentioned above.

If, in connection with a grant, issue or offer to the holders of Shares of rights entitling them tosubscribe for or purchase Shares, any such Shares which are not subscribed for or purchased by suchother persons as referred to above or by the persons entitled thereto (or persons to whom shareholdershave transferred such rights) who have submitted applications for such Shares as referred to above areoffered to and/or subscribed by others, no further adjustment shall be made to the Conversion Price byreason of such offer and/or subscription.

(iv) If we grant, issue or offer to the holders of Shares warrants entitling them to subscribe for or purchaseShares at a consideration per Share receivable by us which is fixed at a price that is less than theMarket Value per Share on the last Trading Day preceding the date of the announcement of the termsof such issue or grant, then the Conversion Price in effect on the last Trading Day preceding the dateof the announcement of the terms of such issue or grant shall be adjusted in accordance with thefollowing formula:

NCP = OCP x [(N+v) / (N+n)]

where:

NCP and OCP have the meanings ascribed thereto in subsection (i) above.

N = the number of Shares outstanding, at the close of business in Mumbai on the last Trading Daypreceding the date of the announcement of the terms of such issue or grant.

n = the number of Shares initially to be issued upon exercise of such warrants at such considerationwhere no applications by shareholders entitled to such warrants are required. Where applications byshareholders entitled to such warrants are required, n equals the number of Shares that equals (A) thenumber of warrants that the underwriters have agreed to underwrite as referred to below or, as the case

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may be, (B) the number of warrants for which applications are received from shareholders as referredto below save to the extent already adjusted for under (A).

v = the number of Shares which the aggregate consideration receivable by us would purchase at suchMarket Value per Share.

Subject as provided below, such adjustment shall become effective (i) where no applications for suchwarrants are required from shareholders entitled to the same, upon their issue and (ii) where applications byshareholders entitled to the same are required, immediately after the latest date for the submission of applicationsfor such warrants by shareholders entitled to the same pursuant to such rights or (if later) immediately after wefix such consideration but retroactively to immediately after the last Trading Day preceding the date of theannouncement of the terms of such issue or grant.

If the warrants described herein expire prior to exercise, the Conversion Price will be adjusted to reflect theactual Shares received upon exercise.

If, in connection with a grant, issue or offer to the holders of Shares warrants entitling them to subscribe foror purchase Shares where applications by shareholders entitled to the same are required, any warrants which arenot subscribed for or purchased by the persons entitled thereto are agreed to be underwritten by other personsafter the latest date for the submission of applications for such warrants, an adjustment shall be made to theConversion Price in accordance with the above provisions which shall become effective immediately after thedate we receive the consideration in full from such other persons but retroactively to immediately after the lastTrading Day preceding the date of the announcement of the terms of such issue or grant.

If, in connection with a grant, issue or offer to the holders of Shares warrants entitling them to subscribe foror purchase Shares where applications by shareholders entitled to the same are required, any such warrants whichare not subscribed for or purchased by the underwriters who have agreed to underwrite as referred to above or bythe shareholders entitled thereto (or persons to whom shareholders have transferred such rights) who havesubmitted applications for such warrants as referred to above are offered to and/or subscribed by others, nofurther adjustment shall be made to the Conversion Price by reason of such offer and/or subscription.

(v) In case we or any of our Subsidiaries shall distribute to all holders of Shares, any shares of our CapitalStock other than Shares, evidences of indebtedness or other of our assets (other than cash distributionsdescribed below), or rights or warrants to subscribe for or purchase any of our Capital Stock (other thanShares) at less than the Market Value of such indebtedness, assets or Capital Stock, determined as ofthe date on which our Board of Directors approves such distribution, then in each such case theConversion Price shall be adjusted so that the same shall equal the price determined by multiplying theConversion Price in effect on the last Trading Date preceding the date of the announcement of theterms of such distribution (the “Ex-Entitlement Date”) by a fraction of which:

(a) the numerator shall be the Market Value per Share, on the Ex-Entitlement Date, less the then FairMarket Value (as determined by our Board of Directors, whose determination shall, if made ingood faith, be conclusive evidence of such Fair Market Value) of the portion of Capital Stock,evidences of indebtedness or other assets so distributed or of such subscription rights or warrantsapplicable to one Share; and

(b) the denominator shall be such Market Value per Share.

If the rights or warrants to subscribe for or purchase any of our Capital Stock (other than Shares) describedherein expire prior to exercise, the Conversion Price will be adjusted to reflect the actual securities received uponexercise.

For the avoidance of doubt, in the event the price of our Shares as quoted on the BSE is not readjusted toreflect the actual securities received upon exercise, no further adjustment shall be made to the Conversion Price.

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(vi) In case we shall, by dividend or otherwise, distribute cash (excluding any dividend or distribution thatis not an Extraordinary Cash Dividend, as defined below) to all holders of Shares then, in such case, theConversion Price shall be adjusted (with such adjustment to be effective on the record date for thedetermination of shareholders entitled to receive such distribution) in accordance with the followingformula:

NCP = OCP x [(M - C)/M]

where:

NCP and OCP have the meanings ascribed thereto in subsection (i) above.

M = the Market Value per Share on such record date.

C = the amount of cash so distributed (and not excluded as provided for above) applicable to one Share.

If such dividend or distribution is not so paid or made, the Conversion Price shall again be adjusted to be theConversion Price which would then be in effect if such dividend or distribution had not been approved.

For purposes of this subsection (vi), an Extraordinary Cash Dividend occurs if, at the effective date, the totalamount of:

(a) any cash dividends or other cash distributions we pay or declare on the Shares, prior to deduction ofany withholding tax or dividend distribution tax (including any Indian dividend distribution tax) plusany corporate dividend or distribution tax attributable to that dividend or distribution on the Shares (ineach case, whether such withholding tax or dividend distribution tax or corporate level dividend ordistribution tax is payable on our account or on the account of our shareholders); and

(b) all other cash dividends paid or declared on the Shares in the 365 consecutive day period prior to theeffective date (other than any dividend or portion thereof previously deemed to be an ExtraordinaryCash Dividend) (the “previous dividends”), except that where the date of announcement for dividendsfor two different fiscal years has occurred in such 365 day period, such dividends relating to theearlier fiscal year will be disregarded for the purpose of determining the previous dividend ((a) and(b) together being the “total current dividend”).

equals or exceeds on a per Share basis 2.5% of the Average Closing Price (as defined below) of the Shares duringthe relevant period (as defined below). For the avoidance of doubt, all amounts are on a per Share basis.

The “Average Closing Price” is the arithmetic average of the Closing Price per Share for each Trading Dayduring the relevant period.

The “Relevant Period” means the period beginning on the first Trading Day after the record date for the firstcash dividend aggregated in the total current dividend, and ending on the Trading Day immediately preceding therecord date for the cash dividend which caused the adjustment to the Conversion Price pursuant to this subsection(vi). However, if there were no cash dividends declared during the 365 consecutive day period prior to the recorddate for the cash dividend which caused the adjustment to the Conversion Price pursuant to the subsection (vi),the relevant period will be the entire period of 365 consecutive days.

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(vii) In case a tender or exchange offer made by us or any of our Subsidiaries for all or any portion of theShares shall expire and such tender or exchange offer shall involve the payment by us or suchSubsidiary of consideration per Share having a Fair Market Value (as determined by our Board ofDirectors, whose determination shall, if made in good faith, be conclusive) at the last time (the“Expiration Date”) tenders or exchanges could have been made pursuant to such tender or exchangeoffer (as it shall have been amended) that exceeds the Market Value per Share, as of the ExpirationDate, the Conversion Price shall be adjusted in accordance with the following formula:

NCP = OCP x [(NxM) / a+[(N-n) x M])]

where:

NCP and OCP have the meanings ascribed thereto in subsection (i) above.

N = the number of Shares outstanding (including any tendered or exchanged Shares) on the ExpirationDate.

M = Market Value per Share as of the Expiration Date.

a = the Fair Market Value of the aggregate consideration payable to the holders of Shares based on theacceptance (up to a maximum specified in the terms of the tender or exchange offer) of all Sharesvalidly tendered or exchanged and not withdrawn as of the Expiration Date (the Shares deemed soaccepted up to any such maximum, being referred to as the “Purchased Shares”).

n = the number of Purchased Shares.

Such reduction to become retroactively effective immediately prior to the opening of business on the dayfollowing the Expiration Date.

If we are obligated to purchase Shares pursuant to any such tender or exchange offer, but we arepermanently prevented by applicable law from effecting any such purchase or all such purchases are rescinded,the Conversion Price shall again be adjusted to be the Conversion Price which would then be in effect if suchtender or exchange offer had not been made.

(viii) In case we issue Shares (other than Shares based on any of the circumstances described insubsections (i) and (ii), Shares issued on exercise of rights or warrants or on conversion or exchangeof any convertible or exchangeable securities granted, offered or issued by us in any of thecircumstances described in this “Antidilution” subsection and/or Shares issued in respect of any QSs)or we or any of our Subsidiaries shall issue any securities initially convertible into or exchangeablefor Shares at a price per Share less than the Market Value per Share determined as of the last TradingDay preceding the date of announcement of the terms of such issuance of securities, the ConversionPrice shall be adjusted in accordance with the following formula:

NCP = OCP x [(N+v) / (N+n)]

where:

NCP and OCP have the meanings ascribed thereto in subsection (i) above.

N = the number of Shares outstanding on the day preceding the date of issuance of such Shares orinitially convertible or exchangeable securities.

n = the number of Shares issued or issuable upon conversion or exchange of such initially convertibleor exchangeable securities.

v = the number of Shares which the aggregate consideration issue price of the total amount of Sharesor initially convertible or exchangeable securities would purchase at Market Value.

If the conversion or exchange right of any such convertible or exchangeable securities expires prior toexercise or if such convertible or exchangeable securities are for any reason not issued, the Conversion Priceshall be readjusted to reflect the actual securities converted or exchanged.

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If we determine, either by ourselves or in consultation with a leading independent securities company ormerchant bank in Mumbai selected by us, that any event or circumstance analogous to the events andcircumstances described above in (i) through (viii) has occurred and has substantially the same effect as suchevent or circumstance described above, the Conversion Price shall be adjusted in a manner that in our opinionfairly and reasonably preserves the value of the Conversion Right of the Holders, such determination to be made,in our absolute discretion, in consultation with such securities company or merchant bank. For the avoidance ofdoubt, for the purpose of subsections (i) to (viii) above, “outstanding” shares shall include any such Sharespurchased by us “in treasury”.

In any case in which the Indenture shall require that an adjustment be made immediately following a recorddate, we may elect to defer the effectiveness of such adjustment (but in no event until a date later than theeffective date of the event giving rise to such adjustment), in which case we shall, with respect to any CARS™

converted after such record date and before such adjustment shall have become effective (i) defer issuing to therelevant holder the number of Shares (in the form of ADSs) deliverable upon such conversion in excess of thenumber of Shares (in the form of Shares or ADSs) deliverable thereupon only on the basis of the ConversionPrice prior to adjustment, and (ii) not later than 20 days after such adjustment shall have become effective,deliver or cause to be delivered to such Holder the additional Shares (in the form of Shares or ADSs) deliverableon such conversion.

In case of a Merger of us where we are not the surviving entity, each CARS™ then outstanding shall,without the consent of any Holders, become convertible only into the kind and amount of securities, cash andother property receivable upon such Merger by a holder of the number of Shares into which such CARS™ couldhave been converted immediately prior to such Merger, ignoring any Qualifying Issue. The corporation formedby such Merger or the Person that acquired such properties and assets shall enter into supplemental Indenturewith the Trustee to provide for the continuation of the Conversion Rights in respect of Shares only after suchMerger and such supplemental Indenture shall provide for adjustments to the Conversion Price which shall be asnearly equivalent as practicable to the adjustments provided in the Indenture.

The Antidilution Adjustment shall not be applicable (i) if pursuant to any employee share option schemeadopted by us and approved by our shareholders and Board of Directors, we issue to our employees (or theemployees of any of our Subsidiaries) options to purchase our Shares, or (ii) if we issue Shares (in the form ofShares or ADSs) upon conversion of the CARS™ under the Indenture.

Provisions Applicable to All Conversions and Adjustments of Conversion Price

No adjustment of the Conversion Price will be required to be made until cumulative adjustments, required tobe made in the circumstances set out above amount to 1.0% or more of the Conversion Price as last adjusted.However, any adjustment required to be made in the circumstances set out above, which is not made because offailure to meet the 1.0% threshold, will be carried forward. Except as otherwise described below, we may reducethe Conversion Price at any time.

We will not take any action which would reduce the Conversion Price per Share below the par value of theShares (which was Rs.10 per Share at the date of this Offering Memorandum), unless, under applicable law thenin effect, the CARS™ could (if they were converted into Shares) be converted at such reduced Conversion Priceinto legally issued, fully-paid and non-assessable ordinary shares.

We will not take any action which would result in the Conversion Price being reduced pursuant to theAntidilution Adjustments below the SEBI Floor Price or a level permitted by applicable Indian laws andregulations from time to time (if any) including (but not limited to) any regulation prescribed by the IndianMinistry of Finance, Government of India and/or the Reserve Bank of India.

All calculations relating to conversion, including adjustments of the Conversion Price, will be made to thenearest .001 of a share of securities or other property or nearest cent, as the case may be.

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Whenever the Conversion Price is adjusted, we will promptly deliver to the Trustee a certificate signed bytwo directors setting forth the Conversion Price after such adjustment and setting forth particulars relating toadjustment of the Conversion Price (including, without limitation, particulars of the event or circumstances,whether an adjustment to the Conversion Price is to be made and if so, the adjusted Conversion Price and the dateon which such adjustment takes effect, whether an amount is to be carried forward pursuant to the third precedingparagraph and if so, the amount to be carried forward and any other information as the Trustee may reasonablyrequire). Promptly after delivering such certificate, we will prepare a notice containing the same information andshall instruct the Trustee to give such notice of such adjustment of the Conversion Price in the form approved bythe Trustee to each Holder and each of the Agents. For so long as the CARS™ are listed on the SGX-ST, and therules of such stock exchange so require, we will inform the SGX-ST and publish such notice to Holders in a dailynewspaper of general circulation in Singapore, which is expected to be The Strait Times.

Events of Default

The occurrence and continuance of the following events will constitute events of default (“Events ofDefault”) under the CARS™: (i) default in the payment of all or any part of the principal and premium of any ofthe CARS™ payable in respect thereof as and when the same shall become due and payable, whether at maturity,upon redemption or otherwise; or (ii) our failure to duly observe or perform any other of the covenants oragreements on our part contained in the CARS™ or the Indenture for a period of 60 days after the date on whichwritten notice specifying such failure, stating that such notice is a “Notice of Default” under such CARS™ anddemanding that we remedy the same, shall have been given in accordance with the Indenture by the holders of atleast 25% in aggregate principal amount of the CARS™ at the time outstanding; or (iii) any of our present orfuture indebtedness for borrowed money in the aggregate outstanding principal amount of US$10 million or moreeither (a) becoming due and payable prior to the due date for payment thereof by reason of acceleration thereoffollowing our default or (b) not being repaid at, and remaining unpaid after, maturity as extended by the period ofgrace, if any, applicable thereto, or any guarantee or indemnity given by us in respect of indebtedness of anyother person in the aggregate outstanding principal amount of US$10 million or more not being honored when,and remaining dishonored after becoming, due and called, provided that, if any such default under any suchindebtedness shall be cured or waived, then the default under the CARS™ by reason thereof shall be deemed tohave been cured or waived; or (iv) a distress, attachment, execution or other legal process is levied, enforced orsued upon or against any material part of our property, assets or revenues by any person or entity and is not eitherdischarged or stayed within 120 days unless enforcement or suit is being contested in good faith and byappropriate proceedings; or (v) an encumbrance takes possession or a receiver or other similar person isappointed over, or an attachment order is issued in respect of, the whole or any material part of our undertaking,property, assets or revenues and in any such case such possession, appointment or attachment is not stayed orterminated or the debt on account of which such possession was taken or appointment or attachment was made isnot discharged or satisfied within 120 days of such possession, appointment or the issue of such order; or (vi) weare declared by a court of competent jurisdiction to be insolvent, bankrupt or unable to pay our debts, or stop,suspend or threaten to stop or suspend payment of all or a material part of our debts as they mature or apply foror consent to or suffer the appointment of an administrator, liquidator or receiver or other similar person,including but not limited to falling within the jurisdiction of the Board for Industrial and FinancialReconstruction (BIFR) under the Sick Industrial Companies (Special Provisions) Act, 1985 (or any successorthereto), or the Sick Companies Act, in respect of us or over the whole or any material part of our undertaking,property, assets or revenues pursuant to any insolvency law and such appointment is not discharged or stayedwithin 60 days of its taking effect or takes any proceeding under any law for a readjustment or deferment of ourobligations or any part of them or make or enter into a general assignment or an arrangement or composition withor for the benefit of our creditors except in any such case, for the purpose of and followed by a reconstruction,amalgamation, reorganization, merger or consolidation on terms approved by a resolution of the securityholdersrepresented and voting at a meeting for such purpose; or (vii) an order of a court of competent jurisdiction ismade or an effective resolution passed for our winding-up or dissolution, or we cease to carry on all orsubstantially all of our business or operations except in any such case, for the purpose of and followed by areconstruction, amalgamation, reorganization, merger or consolidation on terms approved by a resolution of the

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securityholders represented and voting at a meeting for such purpose; or (viii) any Governmental authority oragency compulsorily purchases or expropriates all or any material part of our assets without fair compensation;or (ix) failure by us to facilitate the delivery of the Shares as required following conversion of the CARS™ andsuch failure and continuation of such failure for five Business Days or to deliver the QSs or ADSs as requiredfollowing conversion of the CARS™; or (xi) any event occurs which under the laws of any relevant jurisdictionhas an analogous effect to any of the events referred to in paragraphs (vii) and (viii) above.

In each such case, the Holders of not less than 25% in the aggregate principal amount of the CARS™ thenoutstanding, by notice to us and the Trustee as provided in the Indenture, may declare the principal of theCARS™ plus the premium payable thereon to the date of such payment, to be due and payable immediately.However, the CARS™ shall not be due and payable immediately if, prior to the time when we receive suchnotice, all events of default provided for in the CARS™ and the Indenture shall have been cured. If, at any timeafter the CARS™ shall have been so declared due and payable, and before any judgment or decree for thepayment of the monies due shall have been obtained or entered, we shall pay or deposit with the Trustee a sumsufficient to pay all monies then due with respect to the CARS™ (other than amounts due solely because of suchdeclaration) and cure all other Events of Default, then the Holders of more than 50% in aggregate outstandingprincipal amount of the CARS™ may waive all defaults and rescind and annul such declaration and itsconsequences.

If an Event of Default upon the CARS™ were to occur and a judgment subsequently was obtained in favor ofthe holders of CARS™ in an action brought in the United States, enforcement in India of such a judgment or ofthe Holders’ rights under the CARS™ may be subject to significant delays. Indian judicial processes (includingthose required to obtain judgment on debt obligations, to seek judicial enforcement of such judgments and tocompel the winding up of companies) can be very lengthy, often requiring many years to resolve. Subject tocertain conditions, Indian companies facing significant financial difficulties can seek rehabilitation, andprotection from creditors, under the Sick Companies Act.

Return of Monies Held by Trustee or Other Paying, Conversion and Transfer Agent

Any monies deposited with or paid to the Trustee or any Paying, Conversion or Transfer Agent, or then heldby us in trust, for the payment of the principal of any CARS™ and remaining unclaimed for two years after thedate upon which such principal of any CARS™ shall have become due and payable shall promptly be repaid to orfor our account by the Trustee or such Paying, Conversion and Transfer Agent upon our request, the receipt ofsuch repayment to be confirmed promptly in writing by or on our behalf, and, to the extent permitted by law, theholder of such CARS™ shall thereafter look only to us for any payment which such holder may be entitled tocollect, and all liability of the Trustee or such Paying, Conversion and Transfer Agent with respect to suchmonies shall thereupon cease.

Under New York law, any legal action upon the CARS™ must be commenced within six years after thepayment thereof is due.

Modification, Amendment and Waiver

At any time we may, and at any time after the CARS™ shall have become immediately due and payable dueto an Event of Default, upon a request in writing made by Holders holding not less than 25% of the aggregateoutstanding principal amount of the CARS™ we must convene a meeting of the holders of the CARS™. At ameeting of the holders of the CARS™, persons entitled to vote a majority in aggregate principal amount of theCARS™ at the time outstanding shall constitute a quorum. In the absence of a quorum at any such meeting, themeeting may be adjourned; in the absence of a quorum at any such adjourned meeting, such adjourned meetingmay be further adjourned; at the reconvening of any meeting further adjourned for lack of a quorum, the personsentitled to vote 25% in aggregate principal amount of the CARS™ at the time outstanding shall constitute aquorum for the taking of any action set forth in the notice of the original meeting. Any resolution at a meeting of

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holders of CARS™ to modify or amend, or to waive compliance with, any of the covenants or conditions referredto above (other than those set forth below as requiring the consent of each holder of a CARS™ affected thereby)shall be adopted if passed by the lesser of (i) a majority in aggregate principal amount of the CARS™ thenoutstanding or (ii) 75% in aggregate principal amount of the CARS™ represented and voting at the meeting.

Modifications and amendments to the Indenture or the CARS™ requiring consent of Holders may be made,and future compliance therewith or past defaults by us may be waived, with the consent of Holders of more than50% in aggregate principal amount of the CARS™ at the time outstanding, or of such lesser percentage as mayact at a meeting of Holders; provided that no such modification, amendment or waiver of the Indenture or anyCARS™ may, without the consent of each Holder affected thereby: (i) change the stated maturity of the principalof or premium on any CARS™; (ii) reduce the principal of or any premium on any CARS™; (iii) change thecurrency of payment of the principal of or any interest on any CARS™; (iv) amend the Conversion Rights, otherthan such amendments as may be approved by the Trustee in order to enable conversion of CARS™ into QSs; or(v) reduce the above-stated percentage of aggregate principal amount of CARS™ outstanding or reduce thequorum requirements or the percentage of votes required for the taking of any action.

The Indenture provide that the Trustee may agree, without the consent of the holders of the CARS™, to anymodification or amendment of any provisions of the Indenture or the CARS™ for the purposes of curing anyambiguities which shall not adversely affect the interests of the holders of the CARS™.

Further Issues

We may from time to time without the consent of the Holders create and issue further securities having thesame terms and conditions as the CARS™ in all respects so that such further issue shall be consolidated and forma single series with the outstanding CARS™.

Trustee

Citibank N.A., London Branch will be the Trustee under the Indenture. The Corporate Trust Office of theTrustee is located at 14th Floor, Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB. TheIndenture provide that, prior to the occurrence of an Event of Default, the Trustee will not be liable except for theperformance of such duties as are specifically set forth in the Indenture. If an Event of Default has occurred andis continuing, the Trustee will be obligated to use the same degree of care and skill as a prudent person wouldexercise under the circumstances in the conduct of such person’s own affairs.

Obligation Currency

To the fullest extent permitted by applicable law, our obligation under the CARS™ to make all payments inUS dollars (the “Obligation Currency”) will not be satisfied by any payment, recovery or any other realization ofproceeds in any currency other than the Obligation Currency. We have has agreed to indemnify the holders of theCARS™ in US dollars for any shortfall in the aggregate amount of Obligation Currency actually received by suchholders and the aggregate amount of payments due and payable.

Governing Law and Service of Process

The Indenture and the CARS™ will be governed by, and construed in accordance with, the laws of the Stateof New York. We have designated Tata Incorporated, with an office located at 3 Park Avenue, New York, NewYork, as our authorized agent to receive service of process in the State of New York.

Notices

So long as and to the extent that the CARS™, are represented by the Global Security and such GlobalSecurity is held by the book-entry depositary for Euroclear and Clearstream, Luxemburg, notices to owners ofbeneficial interests in the Global Security may be given by delivery of the relevant notice to such book-entry

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depositary for communication by it to entitled account holders and so long as any of the CARS™ are outstandingand listed on the SGX-ST and the rules of such stock exchange so require, we will publish all notices to holdersof the CARS™ in a daily newspaper of general circulation in Singapore, which is expected to be The Strait Times.

The Global Security

The CARS™ (including beneficial interests in the Global Security) will be subject to certain restrictions ontransfer set forth therein and in the Indenture and will bear a legend regarding such restrictions as set forth under“Transfer Restrictions on the CARS™”. Under certain circumstances, transfers may be made only upon receiptby the Trustee of a written certification (in the form(s) provided in the Indenture).

Individual Securities issued in exchange for an interest in the Global Security under the circumstancesdescribed under “— Individual Securities” below may be transferred only in accordance with the restrictions ontransfer set forth under “Transfer Restrictions on the CARS™” and delivery of any additional documents or otherevidence (including, but not limited to, an opinion of counsel) that we or the Trustee may, in its sole discretion,deem necessary or appropriate to evidence compliance with such transfer restrictions.

Individual Securities issued in exchange for an interest in the Global Security under the circumstancesdescribed under “— Individual Securities” below may not be transferred or exchanged for a beneficial interest inthe Global Security.

Global Security. The Global Security will be registered in the name of Citvic Nominees Limited asnominee of, and deposited with, Citibank, N.A., as common depositary for Euroclear and Clearstream,Luxembourg. Except in certain limited circumstances described in “— Individual Securities” below, the CARS™

will not be issued in certificated form registrable in the names of individual beneficial owners of the CARS™.Beneficial ownership in the CARS™ can only be held in the form of book-entry interests through financialinstitutions as direct or indirect participants in Euroclear or Clearstream, Luxembourg.

Ownership of book-entry interests in the Global Security will be shown on, and all transfers thereof will beeffected only through, records maintained in book-entry form by Euroclear and Clearstream, Luxembourg (withrespect to their participants’ interests) and their participants (with respect to indirect participants in Euroclear andClearstream, Luxembourg.

All interests in the Global Security will be subject to the procedures and requirements of Euroclear andClearstream, Luxembourg and their depositary, as the case may be.

Payments in Respect of Global Security. Payments in respect of the Global Security will be made toEuroclear and Clearstream, Luxembourg or a nominee thereof as the registered owners thereof. None of us, theTrustee, the Paying Agents and any custodian, transfer agent or registrar will have any responsibility or liabilityfor the accuracy of any of the records relating to, or payments made on account of, ownership interests in theGlobal Security or for any notice permitted or required to be given to Holders or any consent given or actionstaken by such registered Holders. We expect that upon receipt of any payment in respect of the Global Securityrepresenting any CARS™ held by us or our nominee, Euroclear and Clearstream, Luxembourg, will immediatelycredit Euroclear and Clearstream, Luxembourg participants’ accounts with payments in amounts proportionate totheir respective interests in the principal amount of the Global Security as shown on its records.

Transfers and Exchanges of CARS™. Transfers between accountholders in Euroclear and Clearstream,Luxembourg will be effected in accordance with their respective rules and operating procedures.

The laws of certain jurisdictions require that certain purchasers of securities take physical delivery ofCARS™ in definitive form. Accordingly, the ability of beneficial owners to own, transfer or pledge beneficialinterests in the Global Security may be limited by such laws.

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Exchange of CARS™ through participants in Euroclear and Clearstream, Luxembourg will be effected inaccordance with their respective rules and operating procedures.

Disclosure with Respect to Euroclear and Clearstream, Luxembourg. Euroclear and Clearstream,Luxembourg each holds interests in CARS™ for participating organizations and facilitates the clearance andsettlement of securities transactions between their respective participants through electronic book-entry changesin accounts of such participants. Euroclear and Clearstream, Luxembourg provide to their respective participants,among other things, services for safekeeping, administration, clearance and settlement of internationally tradedsecurities and securities lending and borrowing. Euroclear and Clearstream, Luxembourg participants arefinancial institutions throughout the world, including underwriters, securities brokers and dealers, banks, trustcompanies, clearing corporations and certain other organizations. Indirect access to Euroclear and Clearstream,Luxembourg is also available to others, such as banks, brokers, dealers and trust companies which clear throughor maintain a custodial relationship with a Euroclear or Clearstream, Luxembourg participant, either directly orindirectly.

Individual Securities

If (i) Euroclear and Clearstream, Luxembourg or any successor to Euroclear and Clearstream, Luxembourgadvises us in writing that it is at any time unwilling or unable to continue as a depositary and a successordepositary is not appointed by us within 90 days or (ii) we, in our sole discretion determine not to have theCARS™ represented by the Global Security and have provided Euroclear and Clearstream, Luxembourg or asuccessor thereof, with written notice of such election, or (iii) the Trustee advises us in writing that an Event ofDefault under the CARS™ has occurred and is continuing for the requisite period and requests the issuance ofCertificated Securities, we will issue individual CARS™ in certificated, definitive registered form in exchange forthe Global Security in any authorized denominations and in an aggregate principal amount equal to the principalamount of the Global Security, provided, however, that if an Event of Default referred to in clause (iii) above iswaived pursuant to the terms of the Indenture and the CARS™, or is no longer continuing, such CertificatedSecurity need not be issued and if already issued may, at the holder’s request, be represented again by the GlobalSecurity in accordance with the Indenture and of the CARS™. Upon receipt of such notice from Euroclear andClearstream, Luxembourg or the Trustee, as the case may be, we will use our reasonable best efforts to makearrangements for the exchange of interests in the Global Security for Certificated Securities and cause therequested Certificated Securities to be executed and delivered to the Registrar in sufficient quantities andauthenticated by the Registrar or the Paying Agent on its behalf for delivery to Holders. Persons exchanginginterests in the Global Security for Certificated Securities will be required to provide to the Registrar, through therelevant clearing system, written instructions and other information required by us and the Registrar to complete,execute and deliver such Certificated Securities and Certificated Securities delivered in exchange for the GlobalSecurity or beneficial interests therein will be registered in the names, and issued in any approved denominations,requested by the relevant clearing system.

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TRANSFER RESTRICTIONS ON THE CARS™

Because of the following restrictions, purchasers of the CARS™ are advised to consult their own legalcounsel prior to making any offer, resale, pledge or transfer of the CARS™ or the QSs, Shares or ADSs to beissued on conversion of the CARS™.

This offering is being made in reliance on Registration S under the Securities Act. The CARS™ and theQSs, Shares or ADSs to be issued on conversion of the CARS™ have not been, and will not be, registered underthe Securities Act or with any securities regulatory authority of any State in the United States or otherjurisdiction. The CARS™ may only be offered, sold or delivered outside the United States to persons other thanU.S. persons (as defined in Regulation S under the Securities Act) in offshore transactions in reliance onRegulation S, in accordance with any other applicable law.

The CARS™ may not at any time be offered, sold, pledged or otherwise transferred to any person located inIndia, residents of India, or to, or for, the account or benefit of any such persons.

Except in certain limited circumstances, interests in the CARS™ may only be held through owningbeneficial interests in the Global Security. Such interests in the Global Security will be shown on, and transfersthereof will be effected only through, records maintained by Euroclear and Clearstream, Luxembourg and theirrespective direct and indirect participants. See “Description of the CARS™ — The Global Security”.

Transfer Restrictions on the CARS™

Each purchaser of the CARS™, by accepting delivery of this Offering Memorandum or the CARS™, will bedeemed to have acknowledged, represented and agreed as follows (terms used herein that are defined inRegulation S are used as defined therein):

1. The CARS™ and the QSs, Shares or ADSs to be issued on conversion of the CARS™ have not been,and will not be, registered under the Securities Act or with any securities regulatory authority of anyState of the United States and are subject to restrictions on transfer.

2. Each purchaser purchasing during the period ending 40 days after the later of the commencement of theoffering of the CARS™ and the last related closing (such period, the “Distribution Compliance Period”)is purchasing the CARS™ in an offshore transaction meeting the requirements of Regulation S.

3. Such purchaser, prior to the expiration of the Distribution Compliance Period, will not offer, sell,pledge or otherwise transfer any interest in the CARS™ and the QSs, Shares or ADSs to be issued onconversion of the CARS™ except as permitted by the applicable legend set out in paragraph 4 below.

4. The CARS™ will bear a legend to the following effect, unless we determine otherwise in compliancewith applicable law and that such purchaser will observe the restrictions contained therein:

THE SECURITIES (“SECURITIES”) EVIDENCED HEREBY AND THE QUALIFYING SECURITIES(THE “QSs”), ORDINARY SHARES (THE “SHARES”) OR AMERICAN DEPOSITARY SHARES(THE “ADSs”), OF TATA MOTORS LIMITED (THE “COMPANY”) TO BE ISSUED UPONCONVERSION OF THE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTEREDUNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIESACT”), AND PRIOR TO THE EXPIRATION OF 40 DAYS AFTER THE LATER OF THECOMMENCEMENT OF THE OFFERING OF THE SECURITIES AND THE LAST RELATEDCLOSING (THE “DISTRIBUTION COMPLIANCE PERIOD”) SUCH SECURITIES MAY NOT BEOFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN AN OFFSHORETRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THESECURITIES ACT, OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENTUNDER THE SECURITIES ACT, OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION

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UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLESECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.EACH HOLDER AND BENEFICIAL OWNER, BY ITS ACCEPTANCE OF THIS SECURITY OR ANINTEREST IN THE SECURITIES EVIDENCED HEREBY, REPRESENTS THAT ITUNDERSTANDS AND AGREES TO THE FOREGOING AND FOLLOWING RESTRICTIONS.

THIS SECURITY AND THE QSs, SHARES OR ADSs TO BE ISSUED ON CONVERSION OF THESECURITY AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTEDFROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHERTRANSFERS OF THIS SECURITY AND ANY SUCH QSs, ADSs OR SHARES TO REFLECT ANYCHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) ORIN PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIESGENERALLY. THE HOLDER OF THIS SECURITY AND SUCH QSs, ADSs OR SHARES SHALLBE DEEMED BY THE ACCEPTANCE OF THIS SECURITY AND ANY SUCH QSs, ADSs ORSHARES TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT. UPON THEEXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD, THE SECURITIES EVIDENCEDHEREBY AND THE QSs, SHARES OR ADSs TO BE ISSUED ON CONVERSION OF THESECURITY SHALL NO LONGER BE SUBJECT TO THE RESTRICTIONS PROVIDED IN THISLEGEND, PROVIDED THAT AT SUCH TIME AND THEREAFTER THE OFFER OR SALE OF THESECURITIES EVIDENCED HEREBY BY THE HOLDER HEREOF IN THE UNITED STATESWOULD NOT BE RESTRICTED UNDER ANY APPLICABLE SECURITIES LAWS OF THEUNITED STATES OR OF THE STATES OF THE UNITED STATES.

5. The CARS™ will initially be represented by the Global Security. Before any CARS™ evidenced bysuch Global Security may be sold, the transferor and the transferee will be required to provide writtencertifications set out in the Indenture relating to the CARS™.

6. Any resale or other transfer, or attempted resale or other transfer, of the CARS™ made other than incompliance with the above-stated restrictions shall not be recognized by us or the Trustee.

Each purchaser of CARS™ that may wish to resell any CARS™ pursuant to Regulation S is advised thatapproval in-principle has been received for the listing of the CARS™ on the SGX-ST. The SGX-ST is a“designated offshore securities market” (within the meaning of Regulation S) and, accordingly, a resaletransaction could be effected in, on or through the facilities of that exchange in reliance upon the safe harborprovided by Rule 904 of Regulation S, subject to compliance with the conditions of Rule 904.

Each purchaser of CARS™ understands that to exercise the right of exchange with respect to a CARS™, itmust make, in the relevant Conversion Notice, the representations, agreements and acknowledgements set out inthe Indenture relating to the CARS™.

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DESCRIPTION OF THE AMERICAN DEPOSITARY SHARES

The following is a description of certain provisions of the Amended and Restated Deposit Agreement (the“Deposit Agreement”), dated as of September 27, 2004, among us, Citibank, N.A., New York as depositary (the“Depositary”), and the registered holders and beneficial owners (“beneficial owners”) from time to time ofAmerican Depositary Shares (“ADSs”), pursuant to which the ADSs that may be issued upon conversion of theCARS™ for ADSs are to be issued (in the event that there has not been an issue of Qualifying Securities). Thissummary does not purport to be complete and is subject to and qualified in its entirety by reference to theDeposit Agreement, including the form of ADRs. Terms used herein and not otherwise defined shall have themeanings set forth in the Deposit Agreement. Copies of the Deposit Agreement will be available for inspection atthe principal office of the Depositary in New York (the “Principal New York Office”), currently located at388 Greenwich Street, 14th Floor, New York, New York 10013 and at the principal office of the Depositary inLondon (the “Principal London Office”), currently located at Citigroup Centre, Canada Square, Canary Wharf,London E14 5LB, England. Any italicized text in this section describing ADSs is provided for your informationonly and is not set forth in the Deposit Agreement. We urge you to review the Deposit Agreement in its entirety.

ADSs are issuable pursuant to the Deposit Agreement in registered form. Each ADS represents, as of thedate hereof, one Share deposited with the Depositary’s custodian in Mumbai, India (the “Custodian”) andregistered in the name of the Depositary or its nominee. An ADS will also represent the right to receive any otherproperty received by the Depositary or the Custodian on behalf of the owner of the ADS but that has not beendistributed to the owners of ADSs because of legal restrictions or practical considerations. The Custodian iscurrently Citibank, N.A., Mumbai, located at 81 Dr. Annie Besart Road, Worli, Mumbai, India 400 018. Onlypersons in whose names ADSs are registered on the books of the Depositary as holders of the ADSs will betreated by the Depositary and us as ADR holders.

If you become a holder or beneficial owner of ADSs, you will become a party to the Deposit Agreement andtherefore will be bound to its terms and to the terms of any ADR that represents your ADSs. The DepositAgreement and the ADR specify our rights and obligations as well as your rights and obligations as owner ofADSs and those of the Depositary. As an ADS holder you appoint the Depositary to act on your behalf in certaincircumstances. The Deposit Agreement and the ADRs are governed by New York law. However, our obligationsto the holders of Shares will continue to be governed by the laws of India, which may be different from the lawsin the United States.

As an owner of ADSs, you may hold your ADSs by means of an ADR registered in your name, through abrokerage or safekeeping account or in book-entry form in an account maintained on your behalf by Citibank,N.A. ADSs held in such an account are known as “direct registration ADSs”. If you decide to hold your ADSsthrough your brokerage or safekeeping account, you must rely on the procedures of your broker or bank to assertyour rights as ADS owner. Please consult with your broker or bank to determine what those procedures are. Thissummary description assumes you have opted to own the ADSs directly by means of an ADR registered in yourname and, as such, we will refer to you as the “holder.” When we refer to “you,” we assume the reader ownsADSs and will own ADSs at the relevant time.

Issuance of ADSs upon Deposit of Shares

The Shares underlying the ADSs issued upon conversion of the CARS™ will be deposited with theCustodian and registered in the name of the Depositary, who will be the holder of record on our books or that ofour agent of all such Shares. Subject to the terms and conditions of the Deposit Agreement, upon transfer of suchShares to the Custodian, the Depositary will issue and deliver to DTC one or more ADSs. Upon conversion of theCARS™ into ADSs, the Depositary as the holder of record of the Shares held in the ADS facility may be requiredto make certain reportings of the legal and beneficial ownership of the Shares.

The Depositary may create ADSs on your behalf if you or your broker deposit Shares (including Sharesreceived upon conversion of CARS™) with the Custodian. The Depositary will deliver these ADSs to the person

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you indicate only after you pay any applicable issuance fees and any charges and taxes payable for the transfer ofthe Shares to the Custodian. Your ability to deposit Shares and receive ADSs may be limited by U.S. and Indianlegal considerations applicable at the time of deposit. In particular, in accordance with applicable regulations ofthe Reserve Bank of India, the Depositary will only be able to accept additional Shares for deposit into the ADSfacility to the extent that there have previously been net withdrawals of Shares.

The issuance of ADSs may be delayed until the Depositary or the Custodian receives confirmation that allrequired approvals have been given and that the Shares have been duly transferred to the Custodian. TheDepositary will only issue ADSs in whole numbers.

When you make a deposit of Shares, you will be responsible for transferring good and valid title to theDepositary. As such, you will be deemed to represent and warrant that:

• The Shares are duly authorized, validly issued, fully paid, non-assessable and legally obtained.

• All preemptive (and similar) rights, if any, with respect to such Shares have been validly waived orexercised.

• You are duly authorized to deposit the Shares.

• The Shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge,mortgage or adverse claim, and are not, and the ADSs issuable upon such deposit will not be, “restrictedsecurities” (as defined in the Deposit Agreement).

• The Shares presented for deposit have not been stripped of any rights or entitlements.

If any of these representations or warranties is incorrect in any way, we and the Depositary may, at your costand expense, take any and all actions necessary to correct the consequences of the misrepresentations.

In addition, in order to prevent unauthorized trading of unlisted Shares in India, you will be required toprovide certifications as may be determined by us to be reasonably necessary to confirm that you will not, andthat you will obtain agreement from subsequent transferees not to, for a period of 45 days following your deposit,withdraw and seek to sell on any Indian Stock Exchange any such Shares if such Shares have not been approvedfor listing and trading on the Indian Stock Exchanges at the time of such deposit.

Dividends and Distributions

As a holder, you generally have the right to receive the distributions we make on the securities depositedwith the Custodian. Your receipt of these distributions may be limited, however, by practical considerations andlegal limitations. Holders will receive such distributions under the terms of the Deposit Agreement in proportionto the number of ADSs held as of a specified record date set by the Depositary.

Distributions of Cash

Whenever we make a cash distribution for the securities on deposit with the Custodian, we will deposit thefunds with the Custodian. Upon receipt of confirmation of the deposit of the funds, the Depositary will promptlyarrange for the funds to be converted into U.S. dollars and for the distribution of the U.S. dollars to the applicableholders, subject to the terms of the Deposit Agreement and applicable Indian laws and regulations.

The conversion into dollars will take place only if practicable in the judgment of the Depositary and if thedollars are transferable to the United States. The amounts distributed to holders will be net of the fees, expenses,taxes and governmental charges payable by holders under the terms of the Deposit Agreement. The Depositarywill apply the same method for distributing the proceeds of the sale of any property (such as undistributed rights)held by the Custodian in respect of securities on deposit.

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Distributions of Shares

Whenever we make a free distribution of Shares for the securities on deposit with the Custodian, we willdeposit the applicable number of Shares with the Custodian. Upon receipt of confirmation of such deposit, theDepositary will either distribute to holders new ADSs representing the Shares deposited or modify theADS-to-Shares ratio, in which case each ADS you hold will represent rights and interests in the additional Sharesso deposited. Only whole new ADSs will be distributed. Fractional entitlements will be sold by the Depositaryand the proceeds of such sale will be distributed as in the case of a cash distribution.

The distribution of new ADSs or the modification of the ADS-to-Shares ratio upon a distribution of Shareswill be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of theDeposit Agreement. In order to pay such taxes or governmental charges, the Depositary may sell all or a portionof the new Shares so distributed.

No such distribution of new ADSs will be made if it would violate a law or if it is not operationallypracticable. If the Depositary does not distribute new ADSs as described above, it may sell the Shares receivedupon the terms described in the Deposit Agreement and will distribute the proceeds of the sale as in the case of adistribution of cash.

Distributions of Rights

Whenever we intend to distribute rights to subscribe for additional Shares, we will give timely notice to theDepositary prior to the proposed distribution stating whether or not we wish the rights to be made available toholders of ADSs. If we intend the rights to be made available to holders of ADSs, we will assist the Depositary indetermining whether it is lawful and reasonably practicable to distribute such rights to purchase additional ADSsto holders.

The Depositary will establish procedures to distribute rights to purchase additional ADSs to holders and toenable such holders to exercise such rights if we have timely requested that the rights be made available toholders of ADSs, if it is lawful and reasonably practicable to make the rights available to holders of ADSs, and ifwe provide all of the documentation contemplated in the Deposit Agreement (such as opinions to address thelawfulness of the transaction). You may have to pay fees, expenses, taxes and other governmental charges tosubscribe for the new ADSs upon the exercise of your rights. The Depositary is not obligated to establishprocedures to facilitate the distribution and exercise by holders of rights to purchase new Shares other than in theform of ADSs.

The Depositary will not distribute the rights to you if:

• We do not timely request that the rights be distributed to you or we request that the rights not bedistributed to you;

• We fail to deliver satisfactory documents to the Depositary; or

• It is not reasonably practicable (in the judgment of the Depositary) to distribute the rights.

The Depositary will sell the rights that are not exercised or not distributed if such sale is lawful andreasonably practicable (in the judgment of the Depositary). The proceeds of such sale will be distributed to holdersas in the case of a cash distribution. If the Depositary is unable to sell the rights, it will allow the rights to lapse.

Elective Distributions

Whenever we intend to make a distribution payable at the election of shareholders either in cash or inadditional Shares in accordance with applicable law, we will give timely notice thereof to the Depositary and willindicate whether or not we wish the elective distribution to be made available to holders of ADSs. In such case,we will assist the Depositary in determining whether such distribution to holders of ADSs is lawful andreasonably practicable.

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The Depositary will make the election available to holders of ADSs only if we have timely requested thatthe distribution be made available to holders of ADSs, if the Depositary has determined that the distribution isreasonably practical and if we have provided satisfactory documentation as contemplated in the DepositAgreement. In such case, the Depositary will establish procedures to enable you to elect to receive either cash oradditional ADSs, in each case as described in the Deposit Agreement.

If the election is not made available to you, you will receive either cash or additional ADSs, depending onwhat a shareholder in India would receive upon failing to make an election, as more fully described in theDeposit Agreement.

Other Distributions

Whenever we intend to distribute property other than cash, Shares or rights to purchase additional Shares,we will timely notify the Depositary and will indicate whether or not we wish such distribution to be made toholders of ADSs. If we notify the Depositary that we wish such distribution to be made to holders of ADSs, wewill assist the Depositary in determining whether such distribution to holders is lawful and reasonablypracticable.

The Depositary shall not make such distribution unless we have requested that such distribution be made toholders of ADSs, we have provided satisfactory documentation as contemplated in the Deposit Agreement andthe Depositary has determined that such distribution is reasonably practicable. If the above conditions aresatisfied, the Depositary will establish procedures for distribution of such property to the holders of ADSs.

The distribution will be made net of fees, expenses, taxes and governmental charges payable by holdersunder the terms of the Deposit Agreement. In order to pay such taxes and governmental charges, the Depositarymay sell all or a portion of the property received.

The Depositary will not distribute the property to ADS holders and will sell the property if:

• We do not request that the property be distributed to you;

• We do not deliver satisfactory documents to the Depositary; or

• The Depositary determines that all or a portion of the distribution to you is not reasonably practicable.

The proceeds of such a sale will be distributed to holders as in the case of a cash distribution.

Redemption

Whenever we decide to redeem any of the securities on deposit with the Custodian, we will notify theDepositary. If the Depositary receives such notice timely, if the redemption is reasonably practicable and if weprovide all of the documentation contemplated in the Deposit Agreement, the Depositary will mail notice of theredemption to the holders.

The Custodian will be instructed to surrender the Shares being redeemed against payment of the applicableredemption price. The Depositary will convert the redemption funds received into dollars upon the terms of theDeposit Agreement and will distribute the net proceeds from the redemption to holders of ADSs so redeemed.You may have to pay fees, expenses, taxes and other governmental charges upon the redemption of your ADSs.If less than all Shares on deposit are being redeemed, the ADSs to be retired will be selected by lot or on a prorata basis, as the Depositary may determine.

Changes Affecting Shares

The Shares held on deposit for your ADSs may change from time to time. For example, there may be achange in nominal or par value, a split-up, cancellation, consolidation or reclassification of such Shares or arecapitalization, reorganization, merger, consolidation or sale of assets.

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If any such change were to occur, your ADSs would, to the extent permitted by law, represent the right toreceive the property received or exchanged in respect of the Shares held on deposit. The Depositary may in suchcircumstances deliver new ADSs to you or call for the exchange of your existing ADSs for new ADSs. If theDepositary may not lawfully distribute such property to you, the Depositary may sell such property and distributethe net proceeds to you as in the case of a cash distribution.

Transfer, Combination and Split Up of ADRs

As an ADR holder, you will be entitled to transfer, combine or split up your ADRs and the ADSs evidencedthereby. For transfers of ADRs, you will have to surrender the ADRs to be transferred to the Depositary and alsomust:

• ensure that the surrendered ADR is properly endorsed or otherwise in proper form for transfer;

• provide such proof of identity and genuineness of signatures as the Depositary deems appropriate;

• provide any transfer stamps required by the State of New York or the United States; and

• pay all applicable fees, charges, expenses, taxes and other government charges payable by ADR holderspursuant to the terms of the Deposit Agreement, upon the transfer of ADRs.

To have your ADRs either combined or split up, you must surrender the ADRs in question to the Depositarywith your request to have them combined or split up, and you must pay all applicable fees, taxes, charges andexpenses payable by ADR holders, pursuant to the terms of the Deposit Agreement, upon a combination or splitup of ADRs.

Withdrawal of Shares Upon Cancellation of ADSs

As a holder, you will be entitled to present your ADSs to the Depositary for cancellation and then receivethe corresponding number of underlying Shares at the Custodian’s offices. Your ability to withdraw the Sharesmay be limited by U.S. and Indian legal considerations applicable at the time of withdrawal. In order to withdrawthe Shares represented by your ADSs, you will be required to pay to the Depositary the fees for cancellation ofADSs and any charges and taxes payable in relation to the Shares being withdrawn. You assume the risk fordelivery of all funds and securities upon withdrawal. Once canceled, the ADSs will not have any rights under theDeposit Agreement.

If you hold an ADR registered in your name, the Depositary may ask you to provide proof of identity andgenuineness of any signature and such other documents as the Depositary may deem appropriate before it willcancel your ADSs. The withdrawal of the Shares represented by your ADSs may be delayed until the Depositaryreceives satisfactory evidence of compliance with all applicable laws and regulations. Please keep in mind thatthe Depositary will only accept ADSs for cancellation that represent a whole number of securities on deposit.

You will have the right to withdraw the securities represented by your ADSs subject to payment of fees,taxes and similar charges at any time except for:

• Temporary delays that may arise because (i) the transfer books for the Shares or ADSs are closed, or(ii) Shares are immobilized on account of a shareholders’ meeting or a payment of dividends.

• Restrictions imposed because of laws or regulations applicable to ADSs or the withdrawal of securities ondeposit.

• Any other circumstances specifically contemplated in the regulations promulgated by the staff of the U.S.Securities and Exchange Commission from time to time.

In addition, in order to prevent unauthorized trading of unlisted Shares in India, you may be required tocertify in writing upon withdrawal of Shares represented by ADSs that you will not seek to sell any withdrawn

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Shares on any Indian Stock Exchange if less than 45 days have elapsed since the time of the deposit of suchShares into the ADS facility and such Shares were not approved for listing and trading on the Indian StockExchanges at the time of such deposit.

In the event the securities on deposit includes Shares that have not been dematerialized and listed for tradingon the Bombay Stock Exchange and the National Stock Exchange (i.e., on account of a delay in such listing inconnection with a deposit of Shares newly issued in connection with a conversion of one of our bonds), theShares withdrawn from the ADR facility will be selected first from the Shares that have been dematerialized andlisted for trading on the Bombay Stock Exchange and the National Stock Exchange and thereafter from theShares that have not been so dematerialized and listed. Neither the Custodian, the Depositary or we shall haveany liability to any holder of ADSs who receives, upon cancellation of ADSs, any Shares that have not beendematerialized and listed for trading on the Bombay Stock Exchange and the National Stock Exchange.

The Deposit Agreement may not be modified to impair your right to withdraw the securities represented byyour ADSs except to comply with mandatory provisions of law.

Voting Rights

Holders of ADSs may exercise voting rights with respect to the deposited securities represented by ADSsonly in accordance with the provisions of the Deposit Agreement and Indian law. Holders of ADSs are notentitled to attend and vote at shareholders’ meetings. A holder of ADSs may withdraw from the ADS facility therelated underlying Shares and vote as a direct shareholder, but there may not be sufficient time to do so after theannouncement of an upcoming vote. If requested by us, the Depositary will notify holders of ADSs of upcomingvotes and arrange to deliver our voting materials to holders of ADSs. The materials will describe the matters tobe voted on and explain how holders of ADSs as of a record date specified by the Depositary may instruct theDepositary to vote the deposited securities underlying the ADSs as directed by the holders of ADSs. For theinstructions to be valid, the Depositary must receive them on or before a date specified by the Depositary. Wehave informed the Depositary that under Indian practice (as presently in effect) proxies are to be submitted to usat least 48 hours before a shareholders’ meeting, which may result in the Depositary requiring the receipt ofvoting instructions from holders of ADSs as early as five days before the date of the meeting. The Depositarywill try, insofar as practicable, subject to the terms of the Deposit Agreement, Indian laws and the provisions ofour Articles of Association, to vote or have its agents vote the deposited securities as instructed. The depositarywill only vote as instructed and is not entitled to exercise any voting discretion. If the Depositary timely receivesvoting instructions from a holder of ADSs which fail to specify the manner in which the Depositary is to vote thedeposited securities underlying such holder’s ADSs, such holder will be deemed to have instructed theDepositary to vote in favor of the items set forth in such voting instructions. If the Depositary does not receivetimely instructions from a holder of ADSs, the holder shall be deemed to have instructed the Depositary to give adiscretionary proxy to a person designated by us, provided that, no such discretionary proxy shall be given withrespect to any matter as to which we inform the Depositary that we do not wish such proxy given or substantialopposition exists or the rights of holders of ADSs will be adversely affected. If requested by us, the Depositary isrequired to represent all Shares underlying the outstanding ADSs, regardless of whether timely votinginstructions have been received from the holders of such ADSs, for the sole purpose of establishing a quorum at ameeting of shareholders.

Ownership Restrictions

We may restrict, in such manner as we deem appropriate, transfers of the ADSs where such transfer mayresult in the total number of Shares represented by the ADSs owned by a single holder to exceed limits underapplicable law or under our Articles of Association. We may instruct the Depositary to take action with respect tothe ownership interest of any holder in excess of the limits set forth in the preceding sentence, including but notlimited to, the imposition of restrictions on the transfer ADSs, the removal or limitation, of voting rights or themandatory sale or disposition on behalf of a holder of Shares represented by the ADSs held by such holder inexcess of such limitations.

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Fees and Charges

As an ADS holder, you will be required to pay the following service fees to the Depositary:

Service Fees

• Issuance of ADSs Up to U.S. 5¢ per ADS issued (including ADSsissued upon conversion of the CARS™)

• Cancellation of ADSs Up to U.S. 5¢ per ADS canceled

• Exercise of rights to purchase additional ADSs Up to U.S. 5¢ per ADS issued

• Distribution of cash dividends No fee (so long as prohibited by NYSE)

• Distribution of ADSs pursuant to stock dividend orother free stock distributions

No fee (so long as prohibited by NYSE)

• Distributions of cash proceeds (i.e., upon sale ofrights or other entitlements)

Up to U.S. 2¢ per ADS held

• Distribution of securities other than ADSs or rightsto purchase additional ADSs

Up to U.S. 5¢ per share (or share equivalent)distributed

• Annual Depositary Services Fee Annually up to U.S. 2¢ per ADS held at the end ofeach calendar year, except to the extent of any cashdividend fee(s) charged during such calendar year

• Distribution of ADSs pursuant to exercise of rightsto purchase additional ADSs.

Up to U.S.5¢ per ADS issued

As an ADS holder you will also be responsible to pay certain fees and expenses incurred by the Depositaryand certain taxes and governmental charges such as:

• Fees for the transfer and registration of Shares charged by the registrar and transfer agent for the Shares inIndia (i.e., upon deposit and withdrawal of Shares).

• Expenses incurred for converting foreign currency into dollars.

• Expenses for cable, telex and fax transmissions and for delivery of securities.

• Taxes and duties upon the transfer of securities (i.e., when Shares are deposited or withdrawn from deposit).

• Fees and expenses incurred in connection with the delivery or servicing of Shares on deposit.

The fees and charges you may be required to pay may vary over time and may be changed by us and by theDepositary. You will receive prior notice of such changes.

Amendments and Termination

We may agree with the Depositary to modify the Deposit Agreement at any time without your consent. Weundertake to give holders 30 days’ prior notice of any increase in any fees and charges (other than foreignexchange charges, taxes, delivery charges and other such expenses) and any other modifications that wouldmaterially prejudice any of their substantial existing rights under the Deposit Agreement. We will not consider tobe materially prejudicial to your substantial rights any modifications or supplements that are reasonablynecessary for the ADSs to be registered under the Securities Act or to be eligible for book-entry settlement, ineach case without imposing or increasing the fees and charges you are required to pay. In addition, we may notbe able to provide you with prior notice of any modifications or supplements that are required to accommodatecompliance with applicable provisions of law.

You will be bound by the modifications to the Deposit Agreement if you continue to hold your ADSs afterthe modifications to the Deposit Agreement become effective. The Deposit Agreement cannot be amended toprevent you from withdrawing the Shares represented by your ADSs (except as permitted by law).

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We have the right to direct the Depositary to terminate the Deposit Agreement at any time. Similarly, theDepositary may in certain circumstances on its own initiative terminate the Deposit Agreement. In either case,the Depositary must give notice to the holders at least 30 days before termination.

Upon termination, the following will occur under the Deposit Agreement:

• for a period of six months after termination, you will be able to request the cancellation of your ADSs andthe withdrawal of the Shares represented by your ADSs and the delivery of all other property held by theDepositary in respect of those Shares on the same terms as prior to the termination. During such six months’period the Depositary will continue to collect all distributions received on the Shares on deposit (i.e.,dividends) but will not distribute any such property to you until you request the cancellation of your ADSs.

• After the expiration of such six months’ period, the Depositary may sell the securities held on deposit. TheDepositary will hold uninvested the net proceeds from such sale and any other funds then held for theholders of ADSs in an unsegregated account. At that point, the Depositary will have no further obligationsto holders other than to account for the funds then held for the holders of ADSs still outstanding.

Books of Depositary

The Depositary will maintain ADS holder records at its depositary office. You may inspect such records atsuch office during regular business hours but solely for the purpose of communicating with other holders in theinterest of business matters relating to the ADSs and the Deposit Agreement.

The Depositary will maintain in New York facilities to record and process the issuance, cancellation,combination, split-up and transfer of ADRs. These facilities may be closed from time to time, to the extent notprohibited by law.

Limitations on Obligations and Liabilities

The Deposit Agreement limits our obligations and the Depositary’s obligations to you. Please note thefollowing:

• We and the Depositary are obligated only to take the actions specifically stated in the Deposit Agreementwithout negligence or bad faith.

• The Depositary disclaims any liability for any failure to carry out voting instructions, for any manner inwhich a vote is cast or for the effect of any vote, provided it acts in good faith and in accordance with theterms of the Deposit Agreement.

• The Depositary disclaims any liability for any failure to determine the lawfulness or practicality of anyaction, for the content of any document forwarded to you on our behalf or for the accuracy of anytranslation of such a document, for the investment risks associated with investing in Shares, for thevalidity or worth of the Shares, for any tax consequences that result from the ownership of ADSs, for thecredit-worthiness of any third party, for allowing any rights to lapse under the terms of the DepositAgreement, for the timeliness of any of our notices or for our failure to give notice.

• We and the Depositary will not be obligated to perform any act that is inconsistent with the terms of theDeposit Agreement.

• We and the Depositary disclaim any liability if we are prevented or forbidden from acting on account ofany law or regulation, any provision of our Articles of Association, any provision of any securities ondeposit or by reason of any act of God or war or terrorism or other circumstances beyond our control.

• We and the Depositary disclaim any liability by reason of any exercise of, or failure to exercise, anydiscretion provided for the Deposit Agreement or in our Articles of Association or in any provisions ofsecurities on deposit.

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• We and the Depositary further disclaim any liability for any action or inaction in reliance on the advice orinformation received from legal counsel, accountants, any person presenting Shares for deposit, anyholder of ADSs or authorized representatives thereof, or any other person believed by either of us in goodfaith to be competent to give such advice or information.

• We and the Depositary also disclaim liability for the inability by a holder to benefit from any distribution,offering, right or other benefit which is made available to holders of Shares but is not, under the terms ofthe Deposit Agreement, made available to you.

• We and the Depositary may rely without any liability upon any written notice, request or other documentbelieved to be genuine and to have been signed or presented by the proper parties.

• We and the Depositary also disclaim liability for any consequential or punitive damages for any breach ofthe terms of the Deposit Agreement.

Pre-Release Transactions

The Depositary may, in certain circumstances, issue ADSs before receiving a deposit of Shares or releaseShares before receiving ADSs for cancellation. These transactions are commonly referred to as “pre-releasetransactions.” The Deposit Agreement limits the aggregate size of pre-release transactions and imposes a numberof conditions on such transactions. These transactions must be fully collateralized with a specified type ofcollateral and specified representations are required from brokers. The Depositary may retain the compensationreceived from the pre-release transactions.

Taxes

You will be responsible for the taxes and other governmental charges payable on the ADSs and thesecurities represented by the ADSs. We, the Depositary and the Custodian may deduct from any distribution thetaxes and governmental charges payable by holders and may sell any and all property on deposit to pay the taxesand governmental charges payable by holders. You will be liable for any deficiency if the sale proceeds do notcover the taxes that are due.

The Depositary may refuse to issue ADSs, to deliver, transfer, split and combine ADRs or to releasesecurities on deposit until all taxes and charges are paid by the applicable holder. The Depositary and theCustodian may take reasonable administrative actions to obtain tax refunds and reduced tax withholding for anydistributions on your behalf. However, you may be required to provide to the Depositary and to the Custodianproof of taxpayer status and residence and such other information as the Depositary and the Custodian mayrequire to fulfill legal obligations. You are required to indemnify us, the Depositary and the Custodian for anyclaims with respect to taxes based on any tax benefit obtained for you.

Foreign Currency Conversion

The Depositary will arrange for the conversion of all foreign currency received into dollars if suchconversion is practicable, and it will distribute the dollars in accordance with the terms of the DepositAgreement. You may have to pay fees and expenses incurred in converting foreign currency, such as fees andexpenses incurred in complying with currency exchange controls and other governmental requirements.

If the conversion of foreign currency is not practicable or lawful, or if any required approvals are denied ornot obtainable at a reasonable cost or within a reasonable period, the Depositary may take the following actionsin its discretion:

• Convert the foreign currency to the extent practicable and lawful and distribute the dollars to the holdersfor whom the conversion and distribution is lawful and practicable.

• Distribute the foreign currency to holders for whom the distribution is lawful and practicable.

• Hold the foreign currency (without liability for interest) for the applicable holders.

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INFORMATION RELATING TO THE DEPOSITARY

Citibank, N.A. (“Citibank”) has been appointed as Depositary pursuant to the Deposit Agreement. Citibankis an indirect wholly owned subsidiary of Citigroup Inc., a Delaware corporation. Citibank is a commercial bankthat, along with its subsidiaries and affiliates, offers a wide range of banking and trust services to its customersthroughout the United States and the world.

Citibank was originally organized on June 16, 1812, and is now a national banking association organizedunder the National Bank Act of 1864 of the United States of America. Citibank is primarily regulated by theUnited States Office of the Comptroller of the Currency. Its principal office is at 399 Park Avenue, New York,NY 10043.

The Consolidated Balance Sheets of Citibank as of December 31, 2006 and December 31, 2005, are set forthin Citigroup’s 2006 Annual Report on Form 10-K. The Annual Report is on file with the United States Securitiesand Exchange Commission.

Citibank’s Articles of Association and By-laws, each as currently in effect, together with Citigroup’s 2006Annual Report on Form 10-K are available for inspection at the Depositary Receipt office of Citibank, 388Greenwich Street, New York, New York 10013 and at the offices of the Trustee at Citibank, N.A., LondonBranch, 14th Floor, Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB.

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DESCRIPTION OF THE SHARES

Set forth below is certain information relating to our share capital, including brief summaries of certainprovisions of our Memorandum and Articles of Association, the Companies Act, the Securities Contracts(Regulation) Act, 1956 and certain related legislation of India, all as currently in effect relating to the rightsattached to the Shares.

General

As at March 31, 2007, our authorized share capital consisted of 450,000,000 equity shares of Rs.10 each.The Shares are listed on the BSE and NSE.

Capital Structure

As at March 31, 2007 Amount

(Rs. in millions)

Authorized Share Capital:450,000,000 Ordinary Shares of Rs.10 each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,500.0

Issued Share Capital:385,373,885 Ordinary Shares of Rs.10 each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,853.7Subscribed Share Capital:385,373,885 Ordinary Shares of Rs.10 each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,853.7

Less: Calls in arrears . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1

3,853.6Share Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.5

3,854.1Issued US$100 million 1% Convertible Notes due 2008:(1)(2)

Aggregate Principal Amount Converted: US$99,940,000Issued US$100 million Zero Coupon Convertible Notes due 2009:(2)

Aggregate Principal Amount Converted: US$93,890,000Issued US$300 million 1% Convertible Notes due 2011:(2)

Aggregate Principal Amount Converted: NilIssued ¥11,760 million Zero Coupon Convertible Notes due 2011:(2)

Aggregate Principal Amount Converted: NilAfter exercise of Notes(3)

Issued Share Capital:407,124,080 Ordinary Shares of Rs.10 each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,071.2Paid up Share Capital:407,124,080 Ordinary Shares of Rs.10 each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,071.2

(1) As at March 31, 2007, US$99,940,000 aggregate principal amount of the 1% Convertible Notes due 2008 had been converted into anaggregate of 18,398,095 Ordinary Shares and US$93,890,000 aggregate principal amount of the Zero Coupon Convertible Notes due2009 had been converted into an aggregate 7,183,773 Ordinary Shares, some of which were represented by depositary shares.

(2) The 1% Convertible Notes due 2008, Zero Coupon Convertible Notes due 2009, 1% Convertible Notes due 2011 and Zero CouponConvertible Notes due 2011 are convertible into Ordinary Shares at the initial conversion price of Rs.250.745, Rs.573.106, Rs. 780.40and Rs.1,001.39, respectively, per Ordinary Share at a fixed exchange rate of Rs.46.16=US$1.00, Rs.43.85=US$1.00, Rs.43.85=US$1.00and Rs.1.00 = ¥ 2.66, respectively. The conversion price in each case is subject to adjustment in certain circumstances.

(3) Assuming the conversion of all Notes.

Dividends

Under the Companies Act, unless the Board of Directors recommends the payment of a dividend, theshareholders at a general meeting have no power to declare any dividend. Subject to certain conditions laid down

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by Section 205 of the Companies Act, no dividend can be declared or paid by a company for any financial yearexcept out of the profits of the company calculated in accordance with the provisions of the Companies Act orout of the profits of the company for any previous financial year(s) arrived at as laid down by the Companies Act.Subject to certain conditions contained in the Companies Act, dividend may also be payable out of moneysprovided by the central or state government for payment of dividend in pursuance of a guarantee given by thatgovernment.

Under our Articles of Association, the shareholders at a general meeting may declare a lower, but nothigher, dividend than that recommended by the Board of Directors. Dividends are generally declared as apercentage of the par value. The dividend recommended by the Board of Directors and approved by theshareholders at a general meeting is distributed and paid to shareholders in proportion to the paid-up value oftheir Shares as on the record date for which such dividend is payable. In addition, as is permitted by the Articlesof Association, the Board of Directors may declare and pay interim dividends. Under the Companies Act,dividends can only be paid in cash to shareholders listed on the register of shareholders on the date which isspecified as the “record date” or “book closure date”. No shareholder is entitled to a dividend while any lien inrespect of unpaid calls on any of his Shares is outstanding. The Shares to be issued upon the conversion of theCARS™ will be fully paid-up when delivered as provided herein. Certain loan agreements entered into by usrequire us to obtain the consent of lenders before making dividend payments when sums due under those loanagreements remain unpaid by us.

Our dividend policy is aimed at enabling shareholders to progressively share in our operating performance.The Shares issued upon conversion of the CARS™ will rank pari passu subject to listing, with our existingShares in all respects including entitlement of the dividend declared, where the record date falls on or after theConversion Date.

Any dividend declared is required to be deposited in a separate bank account within five days from the dateof the declaration of such dividend. Dividends must be paid within 30 days from the date of the declaration andany dividend which remains unpaid or unclaimed after that period must be transferred within seven days to aspecial unpaid dividend account held at a scheduled bank. Any money which remains unpaid or unclaimed forseven years from the date of such transfer must be transferred by us to the Investor Education and ProtectionFund established by the Government pursuant to which no claim shall lie against us or the said Fund. Directorsmay be held criminally liable for any default of the aforementioned provisions.

Under the Companies Act, we may only pay a dividend in excess of 10% of paid-up capital in respect of anyyear out of the profits of that year after we have transferred to our reserves, a percentage of our non-consolidatedIndian GAAP profits for that year ranging between 2.5% to 10% depending on the rate of dividend proposed tobe declared in that year. The Companies Act further provides that if the profit for a year is insufficient, thedividend for that year may be declared out of the non-consolidated Indian GAAP accumulated profits earned inprevious years and transferred to reserves, subject to the following conditions: (i) the rate of dividend to bedeclared may not exceed the lesser of the average of the rates at which dividends were declared in the five yearsimmediately preceding the year, or 10% of paid-up capital; (ii) the total amount to be drawn from theaccumulated profits from previous years and transferred to the reserves, may not exceed an amount equivalent toone tenth of the paid-up capital and free reserves and the amount so drawn is first to be used to set off the lossesincurred in the financial year before any dividends in respect of preference or equity shares; and (iii) the balanceof reserves after withdrawals must not be below 15% of paid-up capital.

Capitalization of Reserves and Issue of Bonus Shares

Our Articles of Association permit us by a resolution of our shareholders in a general meeting to resolve incertain circumstances that certain amounts standing to the credit of certain reserves or securities premium can becapitalized by the issue of fully paid bonus shares or by crediting shares not fully paid-up with the whole or partof any sum outstanding. Bonus shares must be issued pro rata to the amount of capital paid-up on existingshareholdings.

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Any issue of bonus shares would be subject to the guidelines issued by SEBI in this regard. The relevantSEBI guidelines prescribe that no company shall, pending conversion of convertible securities, issue any sharesby way of bonus unless similar benefit is extended to the holders of such convertible securities, throughreservation of shares in proportion to such conversion. The bonus issue shall be made out of free reserves builtout of the genuine profits or share premium collected in cash only. The bonus issue cannot be made unless thepartly paid shares, if any existing, are made fully paid-up. Further, for the issuance of such bonus shares acompany should not have defaulted in the payment of interest or principal in respect of fixed deposits and intereston existing debentures or principal on redemption of such debentures. The declaration of bonus shares in lieu of adividend cannot be made. Further a company should have sufficient reason to believe that it has not defaulted inrespect of the payment of statutory dues of the employees such as contribution to provident fund, gratuity, bonus.The issuance of bonus shares must be implemented within six months from the date of approval by the board ofdirectors.

Pre-Emptive Rights and Alteration of Share Capital

Subject to the provisions of the Companies Act, we may increase our share capital by issuing new shares onsuch terms and with such rights as we, by action of shareholders in a general meeting, determine. Such newshares shall be offered to existing shareholders listed on the members’ register on the record date in proportion tothe amount paid-up on those shares at that date. The offer shall be made by notice specifying the number ofshares offered and the date (being not less than 15 days from the date of the offer) after which the offer, if notaccepted, will be deemed to have been declined. After such date the Board of Directors may dispose of the sharesoffered in respect of which no acceptance has been received, in such manner as they think most beneficial to us.The offer is deemed to include a right exercisable by the person concerned to renounce the shares offered to himin favour of any other person, provided that the person in whose favour such shares have been renounced isapproved by the Board in their absolute discretion.

Under the provisions of the Companies Act, new shares may be offered to any persons whether or not thosepersons include existing shareholders either, if a special resolution to that effect is passed by the shareholders ofthe company in a general meeting or, where only a simple majority of shareholders present and voting havepassed the resolution, if the Government’s permission has been given.

The issuance of Shares upon conversion of the CARS™ has been duly approved by a special resolution ofour shareholders and such shareholders have waived their pre-emptive rights with respect to such Shares.

Our issued share capital may be, among other things, increased by the exercise of warrants attached to anyof our securities, or individually issued, entitling the holder to subscribe for our shares or upon the conversion ofconvertible debentures issued. The issue of any convertible debentures or the taking of any convertible loans,other than from the Government and financial institutions, requires the approval of a special resolution ofshareholders.

We can also alter our share capital by way of a reduction of capital or by undertaking a buyback of sharesunder the prescribed SEBI guidelines.

Our Articles provide that we may in a general meeting, from time to time increase our capital by thecreation of new shares and may consolidate or sub-divide its share capital, convert all or any of our fully paid-upShares into stock and reconvert that stock into fully paid-up Shares or cancel Shares which have not been takenup by any person. We may also from time to time by special resolution reduce our capital.

Our Articles also provide that if at any time the our share capital is divided into different classes of shares,the rights attached to any one class (unless otherwise provided by the terms of issue of the shares of that class)may be varied with the consent in writing of the holders of three-fourths of the issued shares of that class, or withthe sanction of a special resolution, passed at a separate meeting of the holders of the shares of that class.

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Preference Shares

Preference share capital is that part of the paid-up capital of the company which fulfils both therequirements below:

• that with respect to dividend, it carries or will carry a preferential right to be paid a fixed amount or anamount calculated at a fixed rate; and

• that with respect to capital, it carries or will carry on a winding-up of the company, a preferential right tobe repaid the amount of the capital paid-up or deemed to have been paid-up, subject to the provisions ofthe Companies Act.

Preference shares do not confer any further rights to participate in our profits or assets. Holders ofpreference shares are not entitled to vote at general meetings of a company except where the dividend due onsuch capital has remained unpaid:

• in the case of cumulative preference shares, in respect of an aggregate period of not less than two yearspreceding the date of commencement of the meeting; and

• in the case of non cumulative preference shares, either in respect of a period of not less than two years orin respect of an aggregate period of not less than three years comprised in the six years ending with theexpiry of the financial year immediately preceding the commencement of the meeting.

Under the Companies Act, we may issue redeemable preference shares but (i) no such shares shall beredeemed except out of our profits which would otherwise be available for dividends or out of the proceeds of afresh issue of shares made for the purposes of the redemption; (ii) no such shares shall be redeemed unless theyare fully paid; (iii) the premium, if any, payable on redemption shall have been provided for out of our profits orout of our share premium account, before the shares are redeemed; (iv) where any such shares are redeemedotherwise than out of the proceeds of a fresh issue, there shall, out of profits which would otherwise have beenavailable for dividends, be transferred to a reserve fund, to be called the Capital Redemption Reserve Account, asum equal to the nominal amount of the shares redeemed; and (v) the provisions of the Companies Act relating tothe reduction of the share capital of a company shall apply as if such reserve account were paid-up share capitalof such company. Preference shares must be redeemable before the expiry of a period of 20 years from the dateof their issue.

General Meetings of Shareholders

We must hold our annual general meeting each year within 15 months of the previous annual generalmeeting, and in any event not later than six months after the end of each accounting year, unless extended by theRegistrar of Companies at our request for any special reason.

The Board of Directors may convene an extraordinary general meeting of shareholders when necessary or atthe request of a shareholder or shareholders holding in the aggregate not less than 10% of our issued and paid-upcapital. Written notices convening a meeting setting out the date, place and agenda of the meeting must be givento members at least 21 days prior to the date of the proposed meeting. A general meeting may be called aftergiving shorter notice if consent is received from all shareholders entitled to vote, in the case of an annual generalmeeting, and from shareholders holding not less than 95% of our paid-up capital in the case of any other generalmeeting. Currently, we give written notices to all members and, in addition, give public notice of generalmeetings of shareholders in a daily newspaper of general circulation in Mumbai. General meetings are generallyheld at Mumbai. The quorum for a general meeting of the Company is five shareholders personally present.

A company intending to pass a resolution relating to matters such as, but not limited to, amendment in theobjects clause of the memorandum, buy back of shares under the Companies Act, giving loans or extendingguarantees in excess of limits prescribed under the Companies Act, and guidelines issued thereunder, is requiredto obtain a resolution passed by means of a postal ballot instead of transacting the business in a general meeting

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of the company. A notice to all the shareholders shall be sent along with a draft resolution explaining the reasonstherefor and requesting them to send their assent or dissent in writing on a postal ballot within a period of 30days from the date of posting the letter. Postal ballot includes voting by electronic means.

Voting Rights

At a general meeting upon a show of hands, every member holding shares and entitled to vote and present inperson has one vote. Upon a poll the voting rights of each shareholder entitled to vote and present in person or byproxy is in the same proportion as the capital paid-up on each share held by such holder bears to the total paid-upcapital of the company. Voting is by show of hands, unless a poll is ordered by the Chairman of the meeting ordemanded by a shareholder or shareholders holding at least 10% of the voting rights in respect of the resolutionor by those holding paid-up capital of at least Rs. 50,000 (i.e., 5000 shares of Rs.10 each). The Chairman of themeeting has a casting vote.

Holders of ADSs may exercise voting rights with respect to the ordinary shares represented by ADSs only inaccordance with the provisions of our Deposit Agreement and Indian law. See “Description of the AmericanDepositary Shares — Voting Rights”.

Ordinary resolutions may be passed by simple majority of those present and voting. Special resolutionsrequire the vote of three fourths of the members present and voting. Special resolutions require that the votes castin favour of the resolution by those present and voting must be at least three times the votes cast against theresolution. The Companies Act provides that to amend the Articles of Association, a special resolution isrequired to be passed in a general meeting. Certain items, including change in the name of the company,reduction of share capital, approval of variation of rights of special classes of shares, mergers or consolidations,transfers of the whole or a significant part of our business to another company or taking over the whole of thebusiness of any other company and in any case, where shareholding of public financial institutions and banksexceeds 25%, appointment of statutory auditors and dissolution of the company require a special resolution. OurArticles of Association do not permit cumulative voting for the election of our directors.

A shareholder may exercise his voting rights by proxy to be given in the form provided by the Articles. Theinstrument appointing a proxy is required to be lodged with us at least 48 hours before the time of the meeting. Ashareholder may, by a single power of attorney, grant a general power of representation regarding several generalmeetings of shareholders. Any of our shareholders may appoint a proxy. A proxy shall not vote except on a polland does not have a right to speak at meetings. A corporate shareholder is also entitled to nominate arepresentative to attend and vote on its behalf at general meetings, who shall not be deemed a proxy. Such anauthorized representative can vote in all respects as if a member, including on a show of hands and a poll.

The Companies Act allows for a company to issue shares with differential rights as to dividend, voting orotherwise subject to certain conditions prescribed under applicable law. See “— Issue of Shares with DifferentialRights”.

Convertible Securities/Warrants

We may issue from time to time debt instruments that are partly and fully convertible into Shares and/orwarrants to purchase Shares. We may also issue warrants convertible into Shares.

Register of Shareholders and Record Dates

We are obliged to maintain a register of shareholders at our registered office in Mumbai or with the approvalof our shareholders by way of a special resolution and with prior intimation to the Registrar of Companies at someother place in the same city. The register and index of beneficial owners maintained by a depository under theDepositories Act, 1996 is deemed to be an index of members and register and index of debenture holders. We

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recognize as shareholders only those persons who appear on its register of shareholders and we cannot recognizeany person holding any Share or part of it upon any trust, express, implied or constructive, except as permitted bylaw. In the case of shares held in physical form, we through our Registrar and Transfer Agent, register transfers ofshares on the register of shareholders upon lodgement of the share transfer form duly complete in all respectsaccompanied by a share certificate or if there is no certificate, the letter of allotment in respect of shares to betransferred together with duly stamped transfer forms. In respect of transfer of shares in dematerialized form(electronic transfers), the depository transfers shares by entering the name of the purchaser in its books as thebeneficial owner of the shares. In turn, we enter the name of the depository in its records as the registered ownerof the shares. The beneficial owner is entitled to all the rights and benefits as well as the liabilities with respect tothe shares that are held by the depository. Transfer of beneficial ownership through a depository is exempt fromany stamp duty but each depository participant may have its own depository charges. A transfer of shares by wayof share transfer form attracts stamp duty at the rate of 0.25% of the transfer price.

For the purpose of determining the shareholders, we may, after giving not less than seven days’ previousnotice by advertisement in some newspaper circulating in the district where our registered office is situated, closethe register for periods not exceeding 45 days in any one year or 30 days at any one time. In order to determinethe shareholders entitled to dividends we keep the register of shareholders closed for approximately 21 days,generally in June or July of each year. Under the listing regulations of the stock exchanges on which ouroutstanding Shares are listed, we may, upon at least 15 days’ advance notice (or 21 days’ advance notice in theevent our shares are traded on the stock exchanges in physical form) to such stock exchanges, set a record dateand/or close the register of shareholders in order to ascertain the identity of shareholders. The trading of Sharesand the delivery of certificates in respect thereof may continue while the register of shareholders is closed.

Under the Companies Act, we are also required to maintain a register of debenture holders.

Annual Report and Financial Results

Our audited financial statements for the relevant financial year, the directors’ report and the auditors’ report,collectively the Annual Report, must be laid before the annual general meeting. These also include certain otherfinancial information, a corporate governance section and management’s discussion and analysis and are madeavailable for inspection at our registered office during normal working hours for 21 days prior to the annualgeneral meeting.

Under the Companies Act, we must file the Annual Report with the Registrar of Companies within sevenmonths from the close of the accounting year or within 30 days from the date of the annual general meeting,whichever is earlier. As required under the Listing Agreement, six copies are required to be simultaneously sentto the BSE and NSE. We must also publish our financial results in at least one English language daily newspapercirculating in the whole or substantially the whole of India and also in a newspaper published in the language ofthe region where our registered office is situated.

We file certain information on-line, including our Annual Report, half yearly financial statements, report oncorporate governance and the shareholding pattern statement and such other statements, information and reportsas may be specified by the SEBI from time to time, in accordance with the requirements of the ListingAgreement.

Transfer of Shares

Shares held through depositories are transferred in the form of book entries or in electronic form inaccordance with the regulations laid down by the SEBI. These regulations provide the regime for the functioningof the depositories and the participants and set out the manner in which the records are to be kept and maintainedand the safeguards to be followed in this system. Transfers of beneficial ownerships of shares held through adepository are exempt from stamp duty. We have entered into an agreement for such depository services withNational Securities Depository Limited and the Central Depository Services India Limited.

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The SEBI requires that for trading and settlement purposes, our Shares be in book-entry form for allinvestors, except for transactions that are not made on a stock exchange and transactions that are not required tobe reported to the stock exchange.

The requirement to hold shares in book-entry form will apply to Holders when they acquire Shares uponconversion. In order to trade in the our Shares in the Indian market, the converting Holder will be required tocomply with the procedures above.

Our Shares are freely transferable, subject only to the provisions of the Companies Act under which, if atransfer of Shares contravenes the SEBI provisions or the regulations issued under it or the SICA, or any othersimilar law, the Indian Company Law Board may, on an application made by the company, a participant, adepository incorporated in India, an investor or the SEBI, direct a rectification of the register of records. If acompany without sufficient cause refuses to register a transfer of shares within two months from the date ofwhich the instrument of transfer is delivered to the company, the transferee may appeal to the Indian CompanyLaw Board seeking to register the transfer of equity shares. The Company Law Board may, in its discretion, issuean interim order suspending the voting rights attached to the relevant equity shares before completing itsinvestigation of the alleged contravention. Under the Companies (Second Amendment) Act, 2002, the IndianCompany Law Board will be replaced with the National Company Law Tribunal. Pursuant to the ListingAgreement, in the event the company has not effected the transfer of Shares within one month or where thecompany has failed to communicate to the transferee any valid objection to the transfer within the stipulated timeperiod of one month, the company is required to compensate the aggrieved party for the opportunity loss causedduring the period of delay. The Companies Act provides that the shares or debentures of the public listedcompany shall be freely transferable. Our Articles of Association provide for certain restrictions on the transferof shares, including granting power to the board of directors in certain circumstances, to refuse to register oracknowledge transfer of shares or other securities issued by us. However, to the extent that the provisions of theArticles are in conflict with any of the provisions of the Companies Act, the Companies Act shall prevail.Further, under the Companies Act, the enforceability of these transfer restrictions is unclear.

Acquisition of Our Own Shares

We are prohibited from acquiring our own shares unless the consequent reduction of capital is effected byan approval of at least 75% of our shareholders voting on the matter in accordance with the Companies Act andis also sanctioned by the High Court of Judicature at the city where our registered office is situated. Moreover,subject to certain conditions, a company is prohibited from giving, whether directly or indirectly and whether bymeans of a loan, guarantee, the provision of security or otherwise, any financial assistance for the purpose of orin connection with a purchase or subscription made or to be made by any person of or for any shares in thecompany or its holding company. However, pursuant to certain amendments to the Companies Act, a companyhas been empowered to purchase its own shares or other specified securities out of its free reserves, or thesecurities premium account or the proceeds of any shares or other specified securities (other than the kind ofshares or other specified securities proposed to be bought back) subject to certain conditions, including:

• the buy back should be authorized by the Articles of Association of the company;

• a special resolution has been passed in the general meeting of the company authorizing the buy back;

• the buy back is limited to 25 per cent. of the total paid up capital and free reserves;

• the ratio of debt owed by the company is not more than twice the capital and free reserves after such buyback; and

• the buy-back is in accordance with the Securities and Exchange Board of India (Buy-Back of Securities)Regulation, 1998.

The second condition mentioned above would not be applicable if the buy-back is for less than 10% of thetotal paid-up equity capital and free reserves of the company and provided that such buy-back has been

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authorized by the board of directors of the company. Further, a company buying back its securities is notpermitted to buyback any securities for a period of one year from the buyback or to issue new securities for sixmonths from the buyback date. The aforesaid restriction relating to the one year period does not apply to abuyback authorised by a special resolution of the shareholders in general meeting. Every buy back has to becompleted within a period of one year from the date of passing of the special resolution or resolution of theBoard as the case may be.

A company buying back its securities is required to extinguish and physically destroy the securities sobought back within seven days of the last date of completion of the buy-back.

The company is also prohibited from purchasing its own shares or specified securities through anysubsidiary company including its own subsidiary companies or through any investment company (other than apurchase of shares in accordance with a scheme for the purchase of shares by trustees of or for shares to be heldby or for the benefit of employees of the company) or if the company is defaulting on the repayment of deposit orinterest, redemption of debentures or preference shares or payment of dividend to a shareholder or repayment ofany term loan or interest payable thereon to any financial institution or bank, if the company is listed and wishesto buy back its shares or specified securities for the purpose of delisting its shares or specified securities or in theevent of non-compliance with certain other provisions of the Companies Act.

Liquidation Rights

Subject to the rights of creditors, workmen, statutory creditors and of the holders of any other shares entitledby their terms of issue to preferential repayment over the Shares, in the event of winding up of the Company, theholders of the Shares are entitled to be repaid the amounts of capital paid-up or credited as paid-up on suchShares. All surplus assets after payments due to workmen, statutory creditors, and secured and unsecuredcreditors belong to the holders of the equity shares in proportion to the amount paid up or credited as paid-up onsuch shares respectively at the commencement of the winding-up.

Disclosure of Ownership Interest

The provisions of the Companies Act generally require beneficial owners of equity shares of Indiancompanies that are not holders of record to declare to the company details of the holder of record and holders ofrecord to declare details of the beneficial owner. While it is unclear whether these provisions apply to holders ofan Indian company’s ADSs, investors who exchange ADSs for equity shares are subject to this provision. Failureto comply with these provisions would not affect the obligations of a company to register a transfer of equityshares or to pay any dividends to the registered holder of any equity shares in respect of which this declarationhas not been made, but any person who fails to make the required declaration may be liable for a fine of up toRs.1,000 for each day this failure continues.

Issue of Shares with Differential Rights

Section 86 of the Companies Act permits Indian companies to issue equity shares with differential rights asto dividend, voting or otherwise (“Differential Shares”). Further, the issue by a public limited company ofDifferential Shares would be subject to compliance with the provisions of the Companies (Issue of Share Capitalwith Differential Voting Rights) Rules, 2001 (“DVR Rules”). The DVR Rules prescribe various conditions thatwould be required to be satisfied by a public limited company in order for such company to be permitted to issueDifferential shares. Such conditions include the following:

• the company has distributable profits for 3 financial years preceding the year in which Differential Sharesare sought to be issued;

• the company has not failed to repay its deposits or interest thereon on the due date or redeem itsdebentures on the due date or pay dividend;

• the listed public company has obtained approval of its shareholders through postal ballot; etc.

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FOREIGN INVESTMENT AND EXCHANGE CONTROLS

General

Prior to June 1, 2000, foreign investment in Indian securities was regulated by the Foreign ExchangeRegulation Act, 1973 (the “FERA”), and the notifications issued by the Reserve Bank of India (the “RBI”),thereunder.

With effect from June 1, 2000, foreign investment in securities issued by Indian companies is regulated bythe Foreign Exchange Management Act 1999 (the “FEMA”), and the rules, regulations and notifications madeunder FEMA.

The transfer and issue of securities by a person resident, including but not limited to corporates establishedand incorporated, outside India is also governed by the Foreign Exchange Management (Transfer or Issue ofSecurities by a Person Resident Outside India) Regulation, 2000 (the “FEM Securities Regulations”), notified bythe RBI on May 3, 2000, as amended from time to time. Pursuant to the liberalisation policy relating to the FDI,the RBI has issued various notifications and Circulars containing the current regulatory provisions which areamended from time to time.

The FEM Securities Regulations provide that an Indian entity may issue securities to a person residentoutside India or record in its books any transfer of security from or to such person only in the manner set forth inthe FEMA and the rules and regulations made thereunder or as permitted by the RBI.

Foreign Direct Investment

The Government of India, pursuant to its liberalization policy, set up the Foreign Investment PromotionBoard (the “FIPB”), to regulate all foreign direct investment into India. Foreign Direct Investment (“FDI”),means investment by way of subscription and/or purchase of securities of an Indian company by a non-residentinvestor. FIPB approval is required for investment in certain notified sectors. In addition, the followinginvestments would require the prior permission of the FIPB:

• investments in excess of specified sectoral caps;

• investments by any person who has any existing joint venture as on January 12, 2005 or technologytransfer or trademark agreement in India in the same field as that in which the company in which theinvestment is proposed to be made. However, no prior approval is required if: (a) the investor is a venturecapital fund registered with SEBI, or (b) in the existing joint venture, investment by either of the parties isless than 3%, or (c) the existing joint venture or collaboration is defunct or sick;

• investment being more than 24% in the equity capital of units manufacturing items reserved for smallscale industries;

• investment by an unincorporated entity;

• investment in industries for which industrial licensing is compulsory; and

• all proposals relating to the acquisition of shares of an Indian company by a foreign investor (including anindividual of Indian nationality or origin residing outside India (a “Non-Resident Indian”) and corporatesestablished and incorporated outside India) which are not under “automatic” route under the existingIndian foreign investment policy. Further, as per a recent Press Note issued by the Government of India,the prior permission of the FIPB would not be required for transfer of shares from residents tonon-residents in the financial services sector or where the provisions of the Takeover Code are attracted,in cases where approvals are required from the RBI under the Takeover Code or the Insurance Regulatoryand Development Authority.

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A person residing outside India (other than a citizen of Pakistan and Bangladesh) or any entity incorporatedoutside India (other than an entity incorporated in Pakistan or Bangladesh) has general permission to purchaseshares, convertible debentures or preference shares of an Indian company, subject to certain terms andconditions.

Currently, subject to certain exceptions, Foreign Direct Investment and investment by individuals of Indiannationality or origin residing outside India, or Non-Resident Indians, in Indian companies does not require theprior approval of the FIPB or the RBI. The Government has indicated that in all cases where Foreign DirectInvestment is allowed on an automatic basis without FIPB approval the RBI would continue to be the primaryagency for the purposes of monitoring and regulating foreign investment. In cases where FIPB approval isobtained, no further approval of the RBI is required. In both of the above cases, the prescribed applicable normswith respect to determining the price at which shares may be issued by an Indian company to a non-residentforeign investment and exchange controls investor would need to be complied with and a declaration in theprescribed form, detailing the foreign investment, is required to be filed with the RBI once the foreign investmentis made in the Indian company. The foregoing description applies only to an issuance of shares by, and not to atransfer of shares of, Indian companies.

The Government of India has set up the Foreign Investment Implementation Authority (the “FIIA”) in theDepartment of Industrial Policy and Promotion. The FIIA has been mandated to (i) translate foreign directinvestment approvals into implementation, (ii) provide proactive one-stop after-care service to foreign investorsby helping them obtain necessary approvals, (iii) deal with operational problems, and (iv) meet with variousGovernment of India agencies to find solutions to foreign investment problems, and maximize opportunitiesthrough a cooperative approach.

Pricing

SEBI is the regulatory body that regulates the business issuing Indian securities markets and has framedSEBI (Disclosure and Investor Protection) Guidelines, 2000, as amended (the “SEBI Guidelines”), to becomplied with by Indian companies who intend to issue and list their securities in the Indian stock market. TheSEBI Guidelines are applicable to all public issues by listed and unlisted companies, all offers for sale, bonusissues and rights issues by listed companies whose equity share capital is listed, except in case of rights issueswhere the aggregate value of securities offered does not exceed Rs.5 million.

Regulation 5A of the SEBI Guidelines states that an Indian company may, where the issue is on a publicoffer basis, price the securities in consultation with the lead manager to the issue and in all other cases asprovided in Regulation 5 of the SEBI Guidelines.

Regulation 5 of the SEBI Guidelines states that shares issued to persons resident outside India shall not beless than the price worked out in accordance with the SEBI Guidelines as applicable, where the issuing companyis listed on any recognised stock exchange in India, and in all other cases not less than the fair valuation of theshares arrived at by a chartered accountant.

Every Indian company issuing shares or convertible debentures in accordance with the FEM SecuritiesRegulations must submit a report to the RBI within 30 days of receipt of the consideration and another reportwithin 30 days from the date of issue of the shares to the non-resident purchaser.

The above requirements apply only to an issue of new securities by an Indian company.

The Ministry of Finance, Government of India has, by a notification dated August 31, 2005, set out someadditional requirements in relation to pricing of foreign currency convertible bonds. See “— Issue of ForeignCurrency Convertible Bonds and Depositary Receipts”

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Investment by Foreign Institutional Investors

In September 1992, the Government of India issued guidelines which enable foreign institutional investors(“FIIs”), including institutions such as pension funds, investment trusts, asset management companies, nomineecompanies and incorporated/institutional portfolio managers, to make portfolio investments in all securities oflisted and unlisted companies in India. Investments by registered FIIs or Non-Resident Indians made through astock exchange are known as Portfolio Investments. Foreign investors wishing to invest and trade in Indiansecurities in India under these guidelines are required to register with the SEBI and obtain a general permissionfrom the RBI under the FEMA. However, since the SEBI provides a single window clearance, a singleapplication must be made to the SEBI. Foreign investors are not necessarily required to register with the SEBI asFIIs and may invest in securities of Indian companies pursuant to the FDI route discussed above. However, underthe FDI route, while shares of Indian listed companies may be sold on recognised stock exchanges, shares oflisted Indian companies cannot be purchased on stock exchanges.

FIIs that are registered with the SEBI must comply with the provisions of the Securities and ExchangeBoard of India (Foreign Institutional Investors) Regulations 1995, or the Foreign Institutional InvestorRegulations. A registered FII may, subject to the ownership restrictions discussed below, freely buy and sellsecurities issued by any Indian company, realize capital gains on investments made through the initial amountinvested in India, subscribe to or renounce rights offerings for shares, appoint a domestic custodian for custodyof investments made and repatriate the capital, capital gains, dividends, income received by way of interest andany compensation received towards sale or renunciation of rights offerings for shares. An FII may not hold morethan 10% of the total issued capital of a company in its own name; a corporate/individual sub-account of the FIImay not hold more than 5% of the total issued capital of a company, and a broad-based sub-account may not holdmore than 10% of the total issued capital of a company. The total holding of all FIIs in a company is subject to acap of 24% of the company. The 24% limit may be increased to the sectoral cap/statutory limit as applicable tothe Indian company concerned, by the Indian company passing a resolution by its Board of Directors followed bypassing of a special resolution to that effect by its general body. Since the sectoral cap specified for the Companyis 100%, the level of FII investment in the Company can be up to 100%, with the approval of the shareholders.

In terms of recent amendments made to the Foreign Institutional Investor Regulations, FIIs are permitted topurchase shares and convertible debentures, subject to the FII limits, of an Indian company either through:

• a public offer, where the price of the shares to be issued is not less than the price at which the shares areissued to Indian residents, or

• a private placement, where the price of the shares to be issued is not less than the price according to theterms of the relevant guidelines or the guidelines issued by the former Controller of Capital Issues.

Registered FIIs are generally subject to tax under Section 115AD of the Indian Income Tax Act. TheCARS™ and the Shares are subject to tax under Section 115AC. There is uncertainty under Indian law as to thetax regime applicable to the FIIs that hold and trade in foreign currency denominated bonds or global depositaryreceipts. A Holder need not be an FII in order to exercise its Conversion Rights.

Portfolio Investment by Non-Resident Indians

A variety of methods for investing in shares of Indian companies are available to Non-Resident Indians.These methods allow Non-Resident Indians to make Portfolio Investments in shares and other securities ofIndian companies on a basis not generally available to other foreign investors. Under the Portfolio InvestmentScheme, NRIs can purchase up to 5% of the paid up value of the shares issued by a company, subject to thecondition that the aggregate paid up value of shares purchased by all NRIs does not exceed 10% of the paid upcapital of the company. In addition to Portfolio Investments in Indian companies, Non-Resident Indians may alsomake foreign direct investments in Indian companies pursuant to the FDI route discussed above.

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Transfer of Shares of an Indian Company by a person resident outside India

Until recently, the sale of shares of a listed Indian company from a non-resident to a resident required RBIapproval, unless the sale was made on a stock exchange at the market price. The Government has granted generalpermission to persons residing outside India to transfer shares and convertible debentures held by them to anIndian resident, subject to compliance with certain terms and conditions and reporting requirements. A residentwho wishes to purchase shares from a non-resident must, pursuant to the relevant notice requirements, file adeclaration with an authorised dealer in the prescribed Form FC-TRS, together with the relevant documents andfile an acknowledgment thereof with the Indian company to effect transfer of the shares to his name. However, insuch cases, the person to whom the shares are being transferred is required to obtain the prior permission of theCentral Government of India to acquire the shares if he has an existing venture as on January 12, 2005 (with hisholding over 3% shares) or tie-up in India through investment in shares or debentures or a technical collaborationor a trade mark agreement or investment by whatever name called, in the same field to that in which the Indiancompany whose shares are being transferred is engaged. Further, a non-resident may transfer any security held byhim to a person resident in India by way of gift.

Moreover, the transfer of shares between an Indian resident and a non-resident does not require the priorapproval of the Government or RBI, provided that: (i) the activities of the investee company are under theautomatic route pursuant to the FDI Policy (ii) the non-resident shareholding complies with sector limits underthe FDI policy and (iii) the pricing is in accordance with the guidelines prescribed by SEBI and RBI.

Block Deals

SEBI has, by its circular dated 2 September 2005 (the “Block Deal Circular”), issued certain guidelines inrelation to ‘block deals’. The Block Deal Circular has defined a ‘block deal’ to mean a trade with a minimumquantity of 500,000 shares or a minimum value of Rs.50 million executed through a single transaction on aseparate specified window of the stock exchange. The Block Deal Circular has specified the following conditionsfor a block deal:

(i) the specified trading window may be kept open for a limited period of 35 minutes from the beginningof trading hours, i.e. the trading window shall remain open from 9.55 am to 10.30 am;

(ii) the orders may be placed in this window at a price not exceeding +/-1 percent from the ruling marketprice/previous day closing price, as applicable;

(iii) an order may be placed for a minimum quantity of 500,000 shares or minimum value of Rs.50 million;

(iv) every trade executed in this window must result in delivery and shall not be squared off or reversed;

(v) the stock exchanges shall disseminate the information on black deals such as the name of the scrip,name of the client, quantity of shares bought/sold, traded price, etc. to the general public on the sameday, after the market hours; and

(vi) with respect to all transactions in a scrip where the total quantity of shares bought/sold is more than 0.5percent of the number of equity shares of the company listed on the stock exchange, certain disclosurerequirements would be applicable.

Issue of Foreign Currency Convertible Bonds and Depositary Receipts

The MOF, through the issue of Foreign Currency Convertible Bonds and Ordinary Shares (troughDepositary Receipt Mechanism) Scheme, 1993 (the “Depositary Receipt Scheme”) and the External CommercialBorrowings (“ECB”) Guidelines, has allowed Indian corporates to issue FCCBs. The notification relating toFCCBs has been amended from time to time by the MOF, and certain relaxations in the guidelines have also beennotified by the RBI. The Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations,2004 (the “FEMA Foreign Security Regulations”) provide that an Indian company may issue FCCBs to a personresident outside India subject to the approval of the RBI in certain cases. Any Indian company issuing such bonds

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must comply with certain reporting requirements prescribed by the RBI. The FEMA Foreign SecuritiesRegulations provide the following:

An Indian corporate can raise funds up to US$500 million under the “automatic route” without the approvalof the RBI, and above any amount of US$500 million with the approval of the RBI. These limits are alsoavailable to FCCBs under the ECB Guidelines, and Indian companies may issue FCCBs subject to the followingconditions:

• FCCBs up to US$20 million are required to have a minimum average maturity period of three years andFCCBs above US$20 million and up to US$450 million are required to have a minimum average maturityof five years. As per recent amendments to the ECB Guidelines, Indian corporates have been permitted toissue FCCBs for an additional amount of US$250 million with an average maturity of more than 10 yearswith the prior approval of the RBI, over and above the aforesaid limit of US$500 million under theautomatic route, during a financial year. However, prepayment and call/put options would not bepermissible in respect of FCCBs issued in respect of the additional US$250 million, up to a period of 10years;

• the issue of FCCBs shall be subject to the foreign direct investment sectoral caps prescribed by the MOF;

• public issues of FCCBs must be made through reputable lead managers;

• the private placement of FCCBs with unrecognised sources is prohibited;

• prepayment of FCCBs up to US$400 million is permitted without prior approval subject to compliancewith the minimum average maturity period, as applicable;

• the “all-in cost” ceiling for FCCBs having a minimum average maturity period of three to five yearsshould not exceed six month LIBOR plus 1.5%, and in the case of FCCBs having a minimum averagematurity period of more than five years, should not exceed six month LIBOR plus 2.5%;

• FCCB proceeds must be used for investments in areas such as import of capital goods, new projects,modernisation/expansion of existing production units and real estate investments (industrial sector, includingsmall and medium enterprises, or SMEs, and infrastructure sector) in India. Infrastructure sector is defined as(i) power, (ii) telecommunication, (iii) railways, (iv) road including bridges, (v) ports, (vi) industrial parksand (vii) urban infrastructure (water supply, sanitation and sewage projects). Utilisation of the FCCBproceeds is also permitted in the first stage acquisition of shares in the divestment process and also in themandatory second stage offer to the public under the Government of India’s divestment programme of PSUshares, or for overseas direct investment in joint ventures/wholly-owned subsidiaries, expansion of existingjoint ventures or wholly-owned subsidiary operations and overseas mergers and acquisitions. For any use ofproceeds, other than as set out above, the prior permission of the RBI would be required;

• FCCB proceeds are not permitted to be used for working capital purposes, general corporate purposes orfor repayment of existing rupee loans;

• FCCB proceeds may not be used for on-lending and investment in capital markets and real estate, oracquiring a company (or part thereof) in India by a corporate;

• proceeds from the issue of the FCCBs after deduction of the amounts equal to commissions, fees andexpenses of the arranger (provided that such amounts do not exceed the ceiling as may be approved by theMOF) must be parked overseas until actual requirement in India; and

• issue-related expenses shall not exceed 4% of issue size for public issues and 2% for private placements.

• On January 31, 2004, the RBI issued a revised policy with effect from February 1, 2004 for ExternalCommercial Borrowings, which is also applicable to FCCBs (the “Borrowing Policy”), permitting Indiancorporations to raise funds up to US$450 million under the automatic approval route. Borrowings inexcess of US$450 million require the approval of the RBI. In terms of the Borrowing Policy, FCCBs up toUS$20 million must have a minimum average maturity period of three years and FCCBs above US$20

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million and up to US$450 million must have a minimum average maturity of five years. Further, the“all-in cost” ceiling for FCCBs having a minimum average maturity period of three to five years shouldnot exceed 200 basis points over six month LIBOR and in the case of FCCBs having a minimum averagematurity period of more than five years should not exceed 350 basis points over six month LIBOR.Further, on April 1, 2004, the RBI issued a circular stating, inter alia, the following:

• end use of FCCBs for working capital, general corporate purpose and repayment of existing rupee loans isnot permitted;

• the maximum amount of FCCBs that may be raised by an eligible borrower under the automatic route isUS$450 million or its equivalent during a financial year; and

• the primary responsibility to ensure that FCCB raised/utilised are in conformity with the RBI instructionsis that of the concerned borrower and any contravention of the FCCB guidelines will be viewed seriouslyand may result in penal action.

The Ministry of Finance, Government of India has by a notification dated August 31, 2005 and anamendment thereto dated September 14, 2005, amended the Depositary Receipt Scheme and has set out thefollowing additional requirements:

• an Indian company which is not eligible to raise funds from the Indian capital market including acompany which has been restrained from accessing the securities market by the SEBI will not be eligibleto issue FCCBs;

• erstwhile overseas corporate bodies and other entities which are prohibited to buy, sell or deal in securitiesby SEBI are not eligible to subscribe to FCCBs; and

• the pricing for the FCCB issue may not be less than the higher of: (a) the average of the weekly high andlow of the closing price of the related shares quoted on the stock exchange during the six monthspreceding the relevant date; and (b) the average of the weekly high and low of the closing price of therelated shares quoted on the stock exchange during the two weeks preceding the relevant date. For thepurpose of computation of the price, the relevant date is the date thirty days prior to the date on which themeeting of the general body of shareholders is held to consider the issue of FCCBs.

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GOVERNMENT OF INDIA APPROVALS

This offering is being made entirely outside India. This Offering Memorandum may not be distributeddirectly or indirectly in India or to residents of India and the CARS™ are not being offered or sold and may notbe offered or sold directly or indirectly in India or to, or for the account or benefit of, any resident of India.

Each purchaser of CARS™ will be deemed to represent that it is neither located in India nor a resident ofIndia and that it is not purchasing for, or for the account or benefit of, any such person, and understands that theCARS™ will bear a legend to the effect that the securities evidenced thereby may not be offered, sold, pledged orotherwise transferred to any person located in India, to any resident of India or to, or for the account of, suchpersons, unless we determine otherwise in compliance with applicable law.

Indian companies are permitted to issue FCCBs up to US$500 million, subject to meeting with certainprescribed conditions, without the prior approval of the RBI. This offering is being made in accordance with therevised policy. This does not represent any commitment of any kind on the part of the Government of India torender any assistance in any matters of priorities or licenses for the supply of raw materials, machinery, transportfacilities or any other governmental assistance, including the provision of foreign exchange. We are required tomake periodic filings with the RBI with respect to the CARS™.

In our case, foreign direct investment is permitted under the automatic route and non-resident investors arepermitted to hold up to 100% of our equity capital.

Transfer by the non-resident investors of the Shares or QSs issued upon conversion of the CARS™ mayrequire approval of the FIPB and/or the RBI, unless such transfer falls under the “automatic route”. However,there can be no assurance that such approval shall be granted by the FIPB or the RBI in a timely manner or at all.

The Shares issuable on conversion of the CARS™ (other than the shares to be issued in relation to QSs) areto be listed on, and we have applied for “in principle” approvals for such listings from, the BSE and the NSE.

Reporting Requirements

A company issuing bonds is required to furnish a statement in the prescribed form to the RBI within 30 daysfrom the date of closing of the issue.

This Offering Memorandum will be filed with the RBI, the SEBI, the BSE, the NSE and the Registrar ofCompanies in Mumbai, for informational purposes only.

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TAXATION

Indian Taxation of the CARS™

The following is a summary of the principal Indian tax consequences for non-resident investors of theCARS™, the QSs, the ADSs and the Shares issuable on conversion of the CARS™. The summary is based on thetaxation law and practice in force at the time of this Offering Memorandum and is subject to change. Further, itonly addresses the tax consequences for persons who are non-resident as defined in the Income Tax Act, 1961(the Income Tax Act), who acquire CARS™, QSs, ADSs or Shares (upon conversion) pursuant to this OfferingMemorandum and who hold such CARS™,QSs, ADSs or Shares (upon conversion) as capital assets, and does notaddress the tax consequences which may be relevant to other classes of non-resident investors, including dealers.The summary proceeds on the basis that the person continues to remain a non-resident when the income by wayof interest, dividends and capital gains is earned.

EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT ITS TAX ADVISERS ABOUT THEPARTICULAR TAX CONSEQUENCES TO IT OF AN INVESTMENT IN THE CARS™.

This summary is based on the provisions of Section 115AC and other applicable provisions of the IncomeTax Act 1961 and The Issue of Foreign Currency Convertible Bonds and Ordinary Shares (through DepositoryReceipt Mechanism) Scheme, 1993 promulgated by the Government of India, or the Depositary Receipt Scheme,as amended from time to time, together, the Section 115AC Regime. The offering is in accordance with theSection 115AC Regime, and non-resident Investors of the CARS™ will therefore have the benefit of taxconcessions available under the Section 115AC Regime subject to the fulfilment of conditions of that section.Such tax concessions include taxation at a reduced income tax rate of 10% which is then subject to the applicablerate of surcharge on income tax (surcharge is calculated on income tax and the rate is 10% for individuals orassociations of persons whose total income exceeds Rs.1,000,000 and 2.5% for a company including a bodycorporate whose income exceeds Rs.10,000,000 for the current financial year and could vary from year to yearand further an education cess on income tax and surcharge at the applicable rates) on interest and long termcapital gains on the CARS™. The premium on redemption would also be taxed at the rate of 10% plus surchargeand education cess at the applicable rates if the CARS™ are held for a period exceeding 36 months and in thecase of CARS™ held for a period less than 36 months, would be subject to tax at the rates applicable to theholders with a maximum rate of 40% at present plus surcharge and education cess at the applicable rates.

This summary is not intended to constitute a complete analysis of the tax consequences under Indian law ofthe acquisition, ownership and sale of the CARS™, QSs, ADSs or Shares by non-resident investors. Potentialinvestors should, therefore, consult their own tax advisers on the tax consequences of such acquisition, ownershipand sale including, specifically, tax consequences under Indian law, the laws of the jurisdiction of their residence,any tax treaty between India and their country of residence or the country of residence of the overseas depositarybank (the “Depositary”) as applicable and, in particular, the application of the provisions of the Income Tax Actand the Section 115AC Regime.

Taxation of Interest, Premium and Distributions and Provision of Tax Treaties

The Section 115AC Regime provides that payment of interest, if any, on the CARS™ paid to non-residentholders of the CARS™ will be subject to withholding tax at the rate of 10% plus surcharge and education cess atthe applicable rates (or at any more favourable rate available under tax treaties entered into by India with thecountry of residence of the relevant Depositary). The Income Tax Act requires such tax to be withheld at thesource. Where the tax is required to be deducted or withheld, we will gross up the taxable amount and will berequired to account separately to the Indian tax authorities for any withholding taxes applicable on such amounts.

The premium, if any, payable on redemption of the CARS™ will be taxed at the concessional rate of 10%(plus surcharge and education cess at the applicable rates, in case the CARS™ is a long-term capital asset, i.e., itis held for more than 36 months, subject to any more favorable rate under the tax treaties entered into between

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India and the country of residence of the noteholder. If it is held for less than 36 months, the premium will betaxed at the applicable rate (plus surcharge and education cess at the applicable rates). We will be under anobligation to deduct tax at source from the premium amount at the applicable rate.

When the CARS™ are converted into QSs or ADSs or after withdrawal of Shares from the DepositaryFacility under the Deposit Agreement or when the CARS™ are converted into Shares, dividends paid to suchnon-resident holder are not presently liable to tax. However, we are liable to pay a “dividend distribution tax”currently at the rate of 15% (plus surcharge and education cess at the applicable rates) on the total amountdistributed as dividend. Therefore, the effective rate of dividend distribution tax is 17%.

Distribution to non-residents of bonus ADSs, additional shares or rights to subscribe for Shares (for thepurposes of this Section, “Rights”) made with respect to shares are not subject to Indian income tax.

Taxation on Acquisition of QSs, ADSs or Shares upon conversion of CARS™

The acquisition of QSs or ADSs or Shares by a non-resident holder on conversion of CARS™ and/oracquisition of shares in exchange for QSs or ADSs does not constitute a taxable event for Indian income taxpurposes. Such exchange will, however, give rise to a stamp duty as described below under “Stamp Duty”.

Taxation of Capital Gains

The transfer of CARS™ falling within the purview of Section 115AC between non-resident investors outsideIndia is free from any liability for income tax in India on capital gains arising therefrom. It is unclear whethercapital gains derived from the sale of Rights by a non-resident investor to another non-resident investor outsideIndia will be subject to tax liability in India. This would depend on the view taken by Indian tax authorities onthe position with respect to the status of the Rights being offered under the CARS™.

Capital gains arising to the non-resident investor on the transfer of the Shares (whether in India or outsideIndia to a non-resident or Indian resident investor) will be liable for income tax under the provisions of the IndianIncome Tax Act.

Any gain realised on the sale of the Shares on the Stock Exchange held for more than 12 months (long-termgain), will not be subject to Indian capital gains tax if the Securities Transaction Tax, or STT, has been paid onthe transaction. Such transactions are subject to STT of 0.125% to 0.25% depending upon the nature of securities.No surcharge or education cess is payable on STT and STT is collected by the relevant stock exchange and ispaid to the Government.

Any gain realised on the sale of Shares held for more than 12 months on which no STT has been paid, willbe subject to Indian capital gains tax at the rate of 10% plus surcharge and education cess at the applicable rates.For the purpose of computing capital gains tax on the sale of the Shares under the Section 115AC Regime, thecost of acquisition of Shares received in exchange for ADSs will be determined on the basis of the prevailingprice of the Shares on the BSE or NSE as on the date on which the relevant Depository gives notice to itsCustodian for the delivery of such Shares upon redemption of the ADSs, while the cost of acquisition of sharesdirectly converted from the CARS™ will be determined on the basis of the price prevailing on the BSE or theNSE on the date of conversion into equity shares. A non-resident holder’s holding period (for purpose ofdetermining the applicable Indian capital gains tax rate) in respect of Shares commences on the date of the adviceof withdrawal of such Shares by the relevant Depository to its Custodian.

Capital gain realised in respect of Shares held (calculated in the manner set forth in the prior paragraph) for12 months or less (short-term capital gain) on which STT is paid in the manner and rates set out above, is subjectto tax at the rate of 10% plus surcharge and education cess at the applicable rates. In the event that no STT ispaid, short-term gain is subject to tax at variable rates with the maximum rate of 40% plus surcharge andeducation cess at the applicable rates. The actual rate of tax on short-term gains depends on a number of factors,including the legal status of the non-resident holder and the type of income chargeable to tax in India.

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Under the Income Tax Act, capital gains can be of two types, ‘long-term capital gain’ or ‘short-term capitalgain’. Normally, gain arising on sale of capital asset held for more than 36 months is considered as ‘long-termcapital gain and gain arising on sale of capital asset held for less than 36 months is considered as short-termcapital gain. Tax on long-term and short-term capital gains, if payable, shall be paid by the transferor inaccordance with the relevant provisions of the Income Tax Act.

Neither Section 115AC nor the Depositary Receipt Scheme deals with capital losses arising on a transfer ofShares in India. In general terms, losses arising from a transfer of a capital asset in India can only be set offagainst capital gains. Long-term capital loss can be set off only against a long-term capital gain. To the extentthat the losses are not absorbed in the year of transfer, they may be carried forward for a period of eightassessment years immediately succeeding the assessment year for which the loss was first determined and maybe set off against the capital gains, assessable for such subsequent assessment years. In order to set off capitallosses as above, the non-resident investor would be required to file appropriate and timely tax returns in India. Ifthe investors covered by STT regime, the loss arising from transfer of such long term capital asset may not beavailable for setoff against any capital gains.

Tax Treaties

The provision of the Agreement for Avoidance of Double Taxation entered into by the Government of Indiawith the country of residence of the non-resident investor will be applicable to the extent they are more beneficialto the non-resident investor.

If any Shares are held by a non-resident investor following withdrawal thereof from the depositary facilityunder the Deposit Agreements, a double taxation treaty, if any, entered into by India with the country ofresidence of such non-resident investor will be applicable to taxation with respect to any capital gain arising fromtransfer of such Shares or the CARS™ or the dividend income secured by such investor.

However, during the period of fiduciary ownership of Shares in the hands of the Depositary, the provisionsof the Agreement for Avoidance of Double Taxation entered into by the Government of India with the country ofresidence of the Depositary will be applicable in the matter of taxation of capital gains, if any, on ADSs.

Stamp Duty

Under the laws of India, transfers of ADSs and Shares (in dematerialized form) will be exempt from liabilityto Indian stamp duty. However, the transfer of ordinary shares in physical form would be subject to Indian stampduty at the rate of 0.25% of the market value of the ordinary shares on the trade date, and such stamp dutycustomarily is borne by the transferee, that is, the purchaser. In order to register a transfer of Shares in physicalform, it is necessary to present a stamped deed of transfer. An acquisition of shares in physical form from theDepositary in exchange for ADSs representing such shares will not render an investor liable to Indian stampduty, but we will be required to pay stamp duty at the applicable rate on the share certificate. However, since ourShares are compulsorily deliverable in dematerialized form (except for trades of up to 500 Shares, which may bedelivered in physical form) there would be no stamp duty payable in India on transfer of these Shares indematerialised form. There is no stamp duty liability on sale or transfer of CARS™ outside India.

Other Taxes

At present, there are no wealth, gift or inheritance taxes which may apply to the CARS™, the QSs, the ADSsor the underlying shares.

Service Tax

Brokerage or commissions paid to stockbrokers in connection with the sale or purchase of shares listed on arecognised stock exchange in India are subject to a service tax of 12% (plus education cess at the applicable rates)ad valorem. The stockbroker is responsible for collecting the service tax and paying it to the relevant authority.

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PLAN OF DISTRIBUTION

Citigroup Global Markets Limited and J.P. Morgan Securities Ltd., the initial purchasers, are acting as thejoint bookrunners of the offering. Subject to the terms and conditions stated in the purchase agreement datedJune 21, 2007 (the “Purchase Agreement”), the initial purchasers have agreed to purchase, and we have agreed tosell to the initial purchasers, the principal amount of the CARS™ set forth opposite the initial purchaer’s namebelow. We have also granted to the initial purchasers an option to purchase up to US$40,000,000 additionalaggregate principal amount of CARS™, solely to cover over-allotments. This option has been exercised in full.

Initial PurchaserInitial Offering

Amount

Issued Pursuant toOver-allotment

Option Total

Citigroup Global Markets Limited . . . . . . . . . . . . . . . . . . . . . . $300,000,000 $26,668,000 $326,668,000J.P. Morgan Securities Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $150,000,000 $13,332,000 $163,332,000

$450,000,000 $40,000,000 $490,000,000

The Purchase Agreement provides that the obligation of the initial purchasers to purchase the CARS™ issubject to approval of legal matters by counsel and to other conditions. The initial purchasers must purchase allthe CARS™ if they purchase any of the CARS™.

We have been advised that the initial purchasers propose to resell the CARS™ at the offering price set forthon the cover page of this Offering Memorandum outside the United States in reliance on Regulation S. The priceat which the CARS™ are offered may be changed at any time without notice.

The CARS™ and the QSs, Shares or ADSs deliverable upon conversion of the CARS™ have not been andwill not be registered under the Securities Act or any state securities laws and may not be offered or sold withinthe United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S) except intransactions exempt from the registration requirements of the Securities Act. In addition, hedging transactionsinvolving the CARS™ or the QSs, Shares or ADSs deliverable upon conversion of the CARS™ may not beconducted except as permitted by the Securities Act. See “Transfers Restrictions on the CARS™”.

Accordingly, each initial purchaser has agreed that, except as permitted by the Purchase Agreement and asset forth in “Transfer Restrictions on the CARS™”, it will not offer or sell the CARS™ or the QSs, Shares orADSs deliverable upon conversion of the CARS™ within the United States or to, or for the account or benefit of,U.S. persons (i) as part of its distribution at any time or (ii) otherwise until 40 days after the later of thecommencement of this offering and the closing date, and it will have sent to each dealer to which it sells CARS™

or the QSs, Shares or ADSs deliverable upon conversion of the CARS™ during the 40-day distributioncompliance period a confirmation or other notice setting forth the restrictions on offers and sales of the CARS™

within the United States or to, or for the account or benefit of, U.S. persons.

In addition, until 40 days after the commencement of this offering, an offer or sale of CARS™ or the QSs,Shares or ADSs deliverable upon conversion of the CARS™ within the United States by a dealer that is notparticipating in this offering may violate the registration requirements of the Securities Act if that offer or sale ismade otherwise than in accordance with an exemption from the registration requirements of the Securities Act.

We have agreed that, for a period commencing on the date of the Purchase Agreement and ending 90 daysfrom the Closing Date, we will not, without the prior written consent of the initial purchasers, issue or offer, sellor contract to sell any Shares or any securities convertible, exchangeable or exercisable for Shares (including anywarrants), except for the issuance of Shares upon conversion of outstanding convertible securities and conversionof the CARS™. The initial purchasers in their sole discretion may release any of the securities subject to thislock-up agreement at any time without notice.

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Each initial purchaser has represented, warranted and agreed that:

• (i) it has only communicated or caused to be communicated and will only communicate or cause to becommunicated an invitation or inducement to engage in investment activity (within the meaning ofsection 21 of the Financial Services and Markets Act of 2000 (the “FSMA”)) received by it in connectionwith the issue or sale of any CARS™ or QSs, Shares or ADSs to be issued upon conversion of the CARS™

in circumstances in which section 21(1) of the FSMA does not apply to us and (ii) it has complied and willcomply with all applicable provisions of the FSMA with respect to anything done by it in relation to theCARS™ or the QSs, Shares or ADSs deliverable or delivered upon conversion of the CARS™, from orotherwise involving the United Kingdom;

• (i) it has not offered or sold and will not offer or sell in Hong Kong, by means of any document, anyCARS™ or QSs, Shares or ADSs to be issued upon conversion of the CARS™ other than (a) to“professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong andany rules made under that Ordinance; or (b) in other circumstances which do not result in the documentbeing a “prospectus” as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do notconstitute an offer to the public within the meaning of that Ordinance; and (ii) it has not issued or had inits possession for the purposes of issue, and will not issue or have in its possession for the purposes ofissue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to theCARS™ or QSs, Shares or ADSs to be issued upon conversion of the CARS™, which is directed at, or thecontents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to doso under the securities laws of Hong Kong) other than with respect to CARS™ or QSs, Shares or ADSs tobe issued upon conversion of the CARS™ which are or are intended to be disposed of only to personsoutside Hong Kong or only to “professional investors” as defined in the Securities and Futures Ordinanceand any rules made under that Ordinance;

• the CARS™ and the QSs, Shares or ADSs to be issued upon conversion of the CARS™ have not been andwill not be registered under the Securities and Exchange Law of Japan (the “Securities and ExchangeLaw”), and it has not, directly or indirectly, offered or sold and will not, directly or indirectly, offer or sellany CARS™ or QSs, Shares or ADSs to be issued upon conversion of the CARS™ in Japan or to, or forthe benefit of, any resident of Japan, (which term as used herein means any person resident in Japan,including any corporation or other entity organized under the laws of Japan) or to others for re-offering orre-sale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan except pursuant toan exemption from the registration requirements of, and otherwise in compliance with, the Securities andExchange Law and other relevant laws and regulations of Japan;

• this Offering Memorandum has not been and will not be registered as a prospectus with the Registrar ofCompanies in India and that the CARS™ and the QSs, Shares or ADSs to be issued upon conversion of theCARS™ will not be offered in India and that it has not offered or sold and will not offer or sell, anyCARS™ or QSs, Shares or ADSs to be issued upon conversion of the CARS™, nor has it circulated ordistributed nor will it circulate or distribute this Offering Memorandum or any other offering document ormaterial relating to CARS™ or QSs, Shares or ADSs to be issued upon conversion of the CARS™, directlyor indirectly, to the public or any members of the public in India;

• (i) it has not offered or sold and will not offer or sell, directly or indirectly, any CARS™ or QSs, Shares orADSs deliverable upon conversion of the CARS™ to the public in France. In addition, each of us and eachinitial purchaser has represented, warranted and agreed that it has not distributed or caused to bedistributed and will not distribute or cause to be distributed to the public in France, this OfferingMemorandum or any other offering material relating to the CARS™ or the QSs, Shares or ADSs to beissued upon conversion of the CARS™ and such offers, sales and distributions have been and will be madein France only to (i) persons providing investment services relating to portfolio management for theaccount of third parties and/or (ii) qualified investors (investisseurs qualifiés), as defined in, and inaccordance with, Articles L.411-1, L.411-2 and D.411-1 to D.411-3 of the French Code monétaire etfinancier;

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• this Offering Memorandum has not been registered as a prospectus with the Monetary Authority ofSingapore. Accordingly, it has represented, warranted and agreed that it has not offered or sold anyCARS™ or QSs, Shares or ADSs to be issued upon conversion of the CARS™ or caused the CARS™ orQSs, Shares or ADSs to be issued upon conversion of the CARS™ to be made the subject of an invitationfor subscription or purchase nor will it offer or sell the CARS™ or QSs, Shares or ADSs to be issued uponconversion of the CARS™ or cause the CARS™ or QSs, Shares or ADS to be issued upon conversion ofthe CARS™ to be made the subject of an invitation for subscription or purchase, nor has it circulated ordistributed nor will it circulate or distribute this Offering Memorandum or any other document or materialin connection with the offer or sale, or invitation for subscription or purchase, of the CARS™ or QSs,Shares or ADSs to be issued upon conversion of the CARS™, whether directly or indirectly, to persons inSingapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act,Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person pursuant to Section 275(1), or any personpursuant to Section 275(1A), and in accordance with the conditions specified in Section 275, of the SFAor (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision ofthe SFA.

Note

Where the CARS™ are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

(a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the solebusiness of which is to hold investments and the entire share capital of which is owned by one ormore individuals, each of whom is an accredited investor; or

(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments andeach beneficiary of the trust is an individual who is an accredited investor,

shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights andinterest (howsoever described) in that trust shall not be transferred within six months after that corporationor that trust has acquired the CARS™ pursuant to an offer made under Section 275 of the SFA except:

(1) to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant persondefined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms thatsuch shares, debentures and units of shares and debentures of that corporation or such rights andinterest in that trust are acquired at a consideration of not less than S$200,000 (or its equivalent in aforeign currency) for each transaction, whether such amount is to be paid for in cash or by exchangeof securities or other assets, and further for corporations, in accordance with the conditions specifiedin Section 275 of the SFA;

(2) where no consideration is or will be given for the transfer; or

(3) where the transfer is by operation of law.

• in relation to each Member State of the European Economic Area which has implemented the ProspectusDirective (each, a “Relevant Member State”), with effect from and including the date on which theProspectus Directive is implemented in that Relevant Member State (the “Relevant ImplementationDate”), it has not made and will not make an offer of the CARS™ or the QSs, Shares or ADSs to be issuedupon conversion of the CARS™ which are the subject of the offering contemplated by this OfferingMemorandum to the public in that Relevant Member State other than (i) to legal entities which areauthorized or regulated to operate in the financial markets or, if not so authorized or regulated, whosecorporate purpose is solely to invest in securities; (ii) to any legal entity which has two or more of (1) anaverage of at least 250 employees during the last financial year; (2) a total balance sheet of more than€43,000,000; and (3) an annual net turnover of more than €50,000,000, as shown in its last annual orconsodilated accounts; (iii) to fewer than 100 natural or legal persons (other than qualified investors asdefined in the Prospectus Directive) subject to obtaining the prior consent of the initial purchasers; or(iv) in any other circumstances falling within Article 3(2) of the Prospective Directive, provided that no

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such offer of CARS™ or QSs, Shares or ADSs to be issued upon conversion of the CARS™ shall requirethe Company or any of the initial purchasers to publish a prospectus pursuant to Article 3 of theProspectus Directive. For the purposes of this paragraph, the expression an “offer of CARS™ or QSs,Shares or ADS to be issued upon conversion of the CARS™ to the public” in relation to any CARS™ orQSs, Shares or ADSs to be issued upon conversion of the CARS™ in any Relevant Member State meansthe communication in any form and by any means of sufficient information on the terms of the offer andthe CARS™ and the QSs, Shares or ADS to be issued upon conversion of the CARS™ to be offered so asto enable an investor to decide to purchase or subscribe the CARS™, as the same may be varied in thatMember State by any measure implementing the Prospectus Directive in that Member State and theexpression Prospectus Directive means Directive 2003/71/EC and includes any relevant implementingmeasure in each Relevant Member State.

Although approval in-principle has been received for the listing of the CARS™ on the SGX-ST, noassurance can be given that the CARS™ will be listed on the SGX-ST or, if they are, that the CARS™ willcontinue to be listed for so long as they are outstanding. In addition, we cannot assure you that the prices atwhich the CARS™ will sell in the market after this offering will not be lower than the initial offering price or thatan active trading market for the CARS™ will develop and continue after this offering. See “Risk Factors — RisksAssociated with the CARS™, Shares, QSs and ADSs — An active market for the CARS™ may not develop,which may cause the price of the CARS™ to fall”. The initial purchasers have advised us that they currentlyintend to make a market in the CARS™. However, they are not obligated to do so and may discontinue anymarket-making activities with respect to the CARS™ at any time without notice. In addition, market-makingactivity will be subject to the limits imposed by the Securities Act and the Exchange Act and may be limitedduring the pendency of any shelf registration statement. Accordingly, we cannot assure you as to the liquidity ofor the trading market for the CARS™.

In connection with this offering, each initial purchaser (or its affiliates) may, for its own account, enter intoasset swaps, credit derivatives or other derivative transactions relating to the CARS™, the ADSs and/or theShares at the same time as the offer and sale of the CARS™ or in secondary market transactions. As a result ofsuch transactions, each initial purchaser may hold long or short positions in such CARS™ or derivates or in theADSs or Shares. These transactions may comprise a substantial portion of the offering and no specific disclosurewill be made of such positions. Each initial purchaser (or its affiliates) may have purchased CARS™ and beenallocated CARS™ for asset management and/or proprietary purposes and not with a view to distribution. Suchpurchases and allocations in aggregate accounted for less than 10% of the overall offer size.

We expect to deliver the CARS™ against payment for the CARS™ on or about the thirtieth business dayfollowing the date of the pricing of the CARS™. Since trades in the secondary market generally settle in threebusiness days, purchasers who wish to trade CARS™ on the date of pricing or the next succeeding business daywill be required, by virtue of the fact that the CARS™ initially will settle in T+21, to specify alternativesettlement arrangements to prevent a failed settlement.

The initial purchasers have performed investment banking and advisory services for us from time to time forwhich each has received customary fees and expenses. Any of the initial purchasers may, from time to time,engage in transactions with and perform services for us in the ordinary course of its business.

We have agreed to indemnify the initial purchasers against certain liabilities, including liabilities under theSecurities Act, or to contribute to payments that the initial purchasers may be required to make because of any ofthose liabilities.

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VALIDITY OF SECURITIES

The validity of the CARS™ and the ADSs deliverable upon conversion of the CARS™ will be passed uponfor us by Sullivan & Cromwell LLP and for the initial purchasers by Linklaters LLP. The validity of the Shares(including those represented by ADSs) deliverable upon conversion of the CARS™ and will be passed upon forus by AZB & Partners. The validity of the QSs will be passed upon for us by our international or Indian counsel,as the case may be.

AUDITORS

Our non-consolidated financial statements as of and for the fiscal years ended March 31, 2005, 2006 and2007 and our consolidated financial statements as of and for the fiscal years ended March 31, 2005, 2006 and2007 included in this Offering Memorandum have been audited by Deloitte Haskins & Sells, independentstatutory auditors to us, as stated in their reports appearing herein.

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ENFORCEABILITY OF CIVIL LIABILITIES

We are a limited liability public company incorporated under the laws of India. Substantially all of ourdirectors and executive officers are residents of India and all or a substantial portion of our assets and the assetsof such persons are located in India. As a result, it may not be possible for investors to (i) effect service ofprocess upon us or such persons in jurisdictions outside of India or (ii) enforce against us or them judgmentsobtained in courts outside of India.

India is not a party to any international treaty in relation to the recognition or enforcement of foreignjudgments. Recognition and enforcement of foreign judgments is provided under Section 13 of the Code of CivilProcedure, 1908 (the “Civil Code”).

Section 13 and Section 44A of the Civil Code provide that a foreign judgment shall be conclusive as to anymatter thereby directly adjudicated upon except (i) where it has not been pronounced by a court of competentjurisdiction, (ii) where it has not been given on the merits of the case, (iii) where it appears on the face of theproceedings to be founded on an incorrect view of international law or a refusal to recognize the law of India incases where Indian law is applicable, (iv) where the proceedings in which the judgment was obtained wereopposed to natural justice, (v) where it has been obtained by fraud or (vi) where it sustains a claim founded on abreach of any law in force in India.

Section 44A of the Civil Code provides that where a foreign judgment has been rendered by a superior courtin any country or territory outside India which the Government has by notification declared to be a reciprocatingterritory, it may be enforced in India by proceedings in execution as if the judgment had been rendered by therelevant court in India. However, Section 44A of the Civil Code is applicable only to monetary decrees not beingin the nature of any amounts payable in respect of taxes or other charges of a like nature or in respect of a fine orother penalty.

Any judgment of a court in a country that has not been declared by the Government of India to be areciprocating territory for the purpose of Section 44A of the Civil Code may be enforced only by a suit upon thejudgment and not by proceedings in execution. The suit must be brought in India within three years from the dateof the judgment in the same manner as any other suit filed to enforce a civil liability in India. It is unlikely that acourt in India would award damages on the same basis as a foreign court if an action is brought in India.Furthermore, it is unlikely that an Indian court would enforce foreign judgments if it viewed the amount ofdamages awarded as excessive or inconsistent with Indian practice. A party seeking to enforce a foreignjudgment in India is required to obtain approval from the Reserve Bank of India (RBI) to execute such ajudgment or to repatriate outside India any amount recovered.

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GENERAL INFORMATION

Our registered office is located at Bombay House, 24, Homi Mody Street, Mumbai 400 001, India.

We accept responsibility for the information contained herein. To the best of our knowledge and belief, theinformation contained herein is in accordance with the facts and does not omit anything likely to affect theimport of such information.

This offering and the issue of the CARS™ were authorized and approved by our Board of Directors onJune 15, 2007 and by our shareholders on July 11, 2006.

Approval in-principle has been received for the listing of the CARS™ on the SGX-ST. For so long as theCARS™ are listed on the SGX-ST and the rules of the SGX-ST so require, we will appoint and maintain a payingagent in Singapore, where the CARS™ may be presented or surrendered for payment or redemption, in the eventthat the Global Security is exchanged for Individual Securities. In addition, in the event that the Global Securityis exchanged for Individual Securities, an announcement of such exchange shall be made by us or on our behalfthrough the SGX-ST and such announcement will include all material information with respect to the delivery ofthe Individual Securities, including details of the paying agent in Singapore.

The Indenture and the Purchase Agreement are governed by the laws of the State of New York.

The ISIN number for the CARS™ is XS0307881762. The CARS™ have been accepted for clearance throughEuroclear and Clearstream, Luxembourg under Common Code number 030788176. See “Description of theCARS™ — The Global Security”. The CUSIP number for the ADSs is 876568502, and the ISIN for the ADSs isUS8765685024. The ADSs have been assigned Common Code number 020233168.

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Page

Index to the Non-Consolidated Financial Statements

Auditors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2

Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3

Profit and Loss Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4

Cash Flow Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5

Schedules Forming Part of the Profit and Loss Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6

Schedules Forming Part of the Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-10

Significant Accounting Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-23

Schedules Forming Part of the Balance Sheet and Profit and Loss Account . . . . . . . . . . . . . . . . . . . . . . . . . F-26

Index to the Consolidated Financial Statements

Auditors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-48

Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-50

Profit and Loss Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-51

Cash Flow Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-52

Schedules Forming Part of the Consolidated Profit and Loss Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-54

Schedules Forming Part of the Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-56

Schedules Forming Part of the Consolidated Balance Sheet and Profit and Loss Account . . . . . . . . . . . . . . F-67

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Page 133: Tata Motors

AUDITORS’ REPORT ON THE NON-CONSOLIDATED FINANCIAL STATEMENTS

To the Board of DirectorsTata Motors Limited

1. We have examined the non-consolidated Balance Sheets of Tata Motors Limited as at March 31 2005, 2006and 2007, the non-consolidated Profit and Loss Account and Cash Flow Statements for the years ended onthese dates and the accompanying notes and schedules (together comprising the “Financial Statements”) allexpressed in Indian Rupees, as set out in the accompanying Memorandum on pages F-3 to F-47. TheseFinancial Statements are the responsibility of the Company’s Management. Our responsibility is to expressan opinion on these Financial Statements based on our audit.

2. The figures disclosed in the Financial Statements are extracted from the audited Indian Statutory Accounts,regrouped where necessary, and our opinion stated herein is as stated in the opinion for each of the years[note (C) (viii) on Schedule 14]. The Indian Statutory Accounts for the year ended March 31 2005 werejointly audited by Messrs A. F. Ferguson & Co. and Messrs S. B. Billimoria & Co. and have been reliedupon for the purpose of this report. The audit is conducted in accordance with auditing standards generallyaccepted in India. Those standards require that the audit be planned and performed to obtain reasonableassurance about whether the Financial Statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the Financial Statements. Anaudit also includes assessing the accounting principles used and significant estimates made by theManagement. The audit provides a reasonable basis for the opinion.

3. In our opinion and to the best of our information and according to the explanations given to us, and on thebasis stated in Paragraph (2) above, we report that the said Financial Statements give a true and fair view inconformity with the accounting principles generally accepted in India:

i in the case of the Balance Sheet, of the state of affairs of the Company as at March 31 2005, 2006 and2007;

ii in the case of the Profit and Loss Account, of the profit of the Company for the years ended on thosedates; and

iii in the case of the Cash Flow Statement, of the cash flows for the years ended on those dates.

4. The amounts for the year ended and as at March 31 2007 expressed in U.S. dollars, provided assupplementary information solely for the convenience of the reader, have been translated on the basis setforth in note (C) (vii) on Schedule 14 to the Financial Statements.

For DELOITTE HASKINS & SELLSChartered Accountants

M. S. DharmadhikariPartnerMembership No. 30802

Mumbai: July 6, 2007

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Page 134: Tata Motors

AUDITED NON-CONSOLIDATED FINANCIAL STATEMENTS OFTATA MOTORS LIMITED

BALANCE SHEET

As at March 31,

Schedule 2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

SOURCES OF FUNDS1. SHAREHOLDERS’ FUNDS

(a) Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 3,617.9 3,828.7 3,854.1 88.7(b) Reserves and Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 37,496.0 51,542.0 64,843.4 1,491.7

41,113.9 55,370.7 68,697.5 1,580.42. LOAN FUNDS

(a) Secured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4,898.1 8,227.6 20,220.4 465.2(b) Unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 20,056.1 21,140.8 19,871.0 457.1

24,954.2 29,368.4 40,091.4 922.33. DEFERRED TAX LIABILITY (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,652.8 6,225.4 7,868.3 181.0

[Note A (3) (a) Schedule 14]

4. TOTAL FUNDS EMPLOYED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,720.9 90,964.5 116,657.2 2,683.7

APPLICATION OF FUNDS5. FIXED ASSETS

(a) Gross Block . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 66,119.5 79,715.5 87,758.0 2,018.7(b) Less—Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,542.8 44,015.1 48,945.4 1,126.0

(c) Net Block . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,576.7 35,700.4 38,812.6 892.7(d) Capital Work in Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,388.4 9,511.9 25,133.2 578.2

36,965.1 45,212.3 63,945.8 1,470.96. INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 29,120.6 20,151.5 24,770.0 570.07. CURRENT ASSETS, LOANS AND ADVANCES . . . . . . . . . . . . . . . . . . . .

(a) Interest accrued on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.2 61.6 59.4 1.4(b) Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 16,013.6 20,122.4 25,009.5 575.3(c) Sundry Debtors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 7,985.8 7,166.0 7,821.8 179.9(d) Cash and Bank Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 20,050.4 11,194.3 8,267.6 190.2(e) Loans and Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 25,492.6 56,333.8 60,259.9 1,386.3

69,603.6 94,878.1 101,418.2 2,333.18. CURRENT LIABILITIES AND PROVISIONS

(a) Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 52,889.4 57,268.2 59,934.5 1,378.7(b) Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 11,260.6 12,150.4 13,643.2 313.9

64,150.0 69,418.6 73,577.7 1,692.6

9. NET CURRENT ASSETS [(7) less (8)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,453.6 25,459.5 27,840.5 640.510. MISCELLANEOUS EXPENDITURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 181.6 141.2 100.9 2.3

(to the extent not written off or adjusted)

11. TOTAL ASSETS (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,720.9 90,964.5 116,657.2 2,683.7

12. SIGNIFICANT ACCOUNTING POLICIES13. NOTES TO BALANCE SHEET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

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Page 135: Tata Motors

TATA MOTORS LIMITED

PROFIT AND LOSS ACCOUNT

Year Ended March 31,

Schedule 2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

INCOME1. SALE OF PRODUCTS AND OTHER INCOME FROM

OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A(1) 204,790.0 240,014.4 318,846.9 7,334.9LESS : EXCISE DUTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,359.8 33,479.5 43,494.5 1,000.6

174,430.2 206,534.9 275,352.4 6,334.32. DIVIDEND AND OTHER INCOME . . . . . . . . . . . . . . . . . . . . . . . . A(2) 1,660.9 2,890.8 2,451.9 56.4

176,091.1 209,425.7 277,804.3 6,390.7EXPENDITURE

3. MANUFACTURING AND OTHER EXPENSES . . . . . . . . . . . . . . B 154,941.0 183,866.6 247,985.7 5,704.84. EXPENDITURE TRANSFERRED TO CAPITAL AND OTHER

ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,181.3) (3,088.5) (5,770.5) (132.7)

152,759.7 180,778.1 242,215.2 5,572.1

PROFIT BEFORE DEPRECIATION, INTEREST, EXCEPTIONALITEMS AND TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,331.4 28,647.6 35,589.1 818.6

5. PRODUCT DEVELOPMENT EXPENDITURE . . . . . . . . . . . . . . . 671.2 737.8 850.2 19.56. DEPRECIATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,501.6 5,209.4 5,862.9 134.87. INTEREST [Note B (4) Schedule 14] . . . . . . . . . . . . . . . . . . . . . . . . 1,541.5 2,263.5 3,130.7 72.0

PROFIT FOR THE YEAR BEFORE EXCEPTIONAL ITEMS ANDTAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,617.1 20,436.9 25,745.3 592.38. PROVISION FOR DIMINUTION IN VALUE OF

INVESTMENTS (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (96.7) 96.9 (10.9) (0.3)9. EMPLOYEE SEPARATION COST . . . . . . . . . . . . . . . . . . . . . . . . . (1.4) — (2.6) (0.1)

PROFIT BEFORE TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,519.0 20,533.8 25,731.8 591.910. TAX EXPENSE [Note A(3)(c) Schedule 14] . . . . . . . . . . . . . . . . . (4,149.5) (5,245.0) (6,597.2) (151.8)

PROFIT AFTER TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,369.5 15,288.8 19,134.6 440.111. BALANCE BROUGHT FORWARD FROM PREVIOUS

YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,658.0 5,856.0 7,767.6 178.7Less: Arrears of preference dividend pertaining to erstwhile . . . . . .Tata Finance Ltd. (including tax) [Note C(ii)(h) Schedule 14] . . . . — 199.4 — —

3,658.0 5,656.6 7,767.6 178.7

AMOUNT AVAILABLE FOR APPROPRIATION . . . . . . . . . . . . . . . . 16,027.5 20,945.4 26,902.2 618.8

12. APPROPRIATIONS(a) Proposed Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,521.9 4,979.4 5,780.7 133.0(b) Tax on Proposed Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 634.2 698.4 982.5 22.6(c) Residual dividend paid for preceeding year (including tax) . . . . . 15.4 — 0.7 *(d) General Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000.0 7,500.0 10,000.0 230.0(e) Balance carried to Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . 5,856.0 7,767.6 10,138.3 233.2

16,027.5 20,945.4 26,902.2 618.8

13. EARNINGS PER SHARE a) Basic . . . . . . . . . . . . . . . . . . Rupees 34.38 40.57 49.76 US $ 1.14[Note B (7) Schedule 14] b) Diluted . . . . . . . . . . . . . . . . Rupees 32.23 38.20 47.24 US $ 1.09

14. SIGNIFICANT ACCOUNTING POLICIES15. NOTES TO PROFIT AND LOSS ACCOUNT . . . . . . . . . . . . . . . . 14 to 18

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Page 136: Tata Motors

TATA MOTORS LIMITED

CASH FLOW STATEMENTYear Ended March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

A. Cash flow from Operating ActivitiesProfit after tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,369.5 15,288.8 19,134.6 440.1Adjustments for:Depreciation (including Lease Equalization netted off against income) . . . . . . . . . . . . . . . . . . . . . 4,501.6 5,224.8 5,825.1 134.0Profit on sale of assets (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.3) (56.0) (146.4) (3.4)Profit on sale of investments (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (479.4) (1,776.4) (354.8) (8.2)Provision for diminution in value of investments (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96.7 (96.9) 10.9 0.3Wealth tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5 4.3 6.5 0.1Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,638.2 3,823.5 4,825.0 111.0Deferred tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511.3 1,421.5 1,772.2 40.8Interest / Dividend (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360.0 1,148.8 1,033.6 23.8Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (116.1) 343.2 (621.7) (14.3)Employee Separation Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.3 40.4 40.3 0.9

8,557.8 10,077.2 12,390.7 285.0

Operating Profit before Working Capital changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,927.3 25,366.0 31,525.3 725.1Adjustments for:Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (975.3) (3,170.2) (3,773.8) (86.8)Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,519.3) (4,108.8) (4,887.1) (112.4)Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,148.6 1,941.7 2,219.6 51.1

5,654.0 (5,337.3) (6,441.3) (148.1)Vehicle loans and hire purchase receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10,004.6) (17,853.9) 1,921.2 44.2

(4,350.6) (23,191.2) (4,520.1) (103.9)Cash generated from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,576.7 2,174.8 27,005.2 621.2Direct taxes refund / (paid) (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,071.8) (4,385.1) (4,903.9) (112.8)

Net Cash from / (used in) Operating Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,504.9 (2,210.3) 22,101.3 508.4

B. Cash Flow from Investing ActivitiesPurchase of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,174.7) (11,234.9) (24,611.9) (566.2)Sale of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.2 140.4 951.5 21.9Loan to associates, subsidiaries and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,096.6) (77.4) — —Purchase of investments in subsidiary companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,245.2) (2,066.5) (5,616.4) (129.2)Purchase of investments in associate companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (233.4) — — —Sale of investments in Mutual Fund (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,912.4 8,486.0 1,371.7 31.6Decrease / (Increase) in investments in retained interest in securitisation transactions . . . . . . . . . . 595.8 914.7 (286.6) (6.6)Purchase of investments—Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,146.3) (300.0) (67.5) (1.6)Refund of acquisition tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.9 — — —Refund from escrow account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 33.4 — —Sale of investments in subsidiary companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2,065.9 — —Sale / redemption of investments—others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,150.3 130.2 345.0 7.9Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466.5 791.7 412.0 9.5Dividend / Income on investments received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,181.5 1,081.0 2,076.3 47.8(Increase)/ Decrease in short term Inter-corporate deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (57.1) 24.9 (2,625.1) (60.4)

Net Cash used in Investing Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,565.7) (10.6) (28,051.0) (645.3)

C. Cash Flow from Financing ActivitiesProceeds from issue of Foreign Currency Convertible Notes (FCCN) (net of expenses) . . . . . . . . 17,315.0 4,449.9 — —Stamp duty on FCCN conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (3.7) (0.9) *Premium on redemption of debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (118.6) — — —Proceeds from long term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 985.4 10.0 17,839.2 410.4Repayment of long term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,993.6) (5,618.1) (8,142.6) (187.3)Payment of premium on long term forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (30.7) (0.7)(Decrease) / Increase in short term loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (547.7) 847.7 2,738.0 63.0Proceeds from issue of shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 718.1 — — —Dividend paid (including Dividend tax) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,653.9) (5,141.6) (5,667.0) (130.4)Interest Paid (including discounting charges paid, Rs 1,756.4 millions, 2005-06 Rs. 1,649.9

millions, 2004-05 Rs. 1,410.7 millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,229.1) (3,096.9) (3,700.2) (85.1)

Net Cash received / (used) in Financing Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,475.6 (8,552.7) 3,035.8 69.9

Net Increase / (Decrease) in Cash & cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,414.8 (10,773.6) (2,913.9) (67.0)Cash and cash equivalents as at March 31, (Opening Balance) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,704.9* 20,050.4* 11,194.3* 257.5Cash and Bank balance taken over on amalgamation of Tata Finance Ltd and Telco Dadajee

Dhackjee Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1,946.5 — —Cash and Bank balance taken over on merger of spare parts division of TMISL (formerly known

as Concorde Motors Ltd.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3 — — —Less : Exchange fluctuation on FCCN proceeds kept outside India and on foreign currency bank

balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (75.6) (29.0) (12.8) (0.3)Cash and cash equivalents as at March 31, (Closing Balance) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,050.4* 11,194.3* 8,267.6* 190.2

* Includes Cash Collateral of Rs. 2,908.0 millions (2005-2006 Rs. 2,828.7 millions; 2004-05 Rs. 755.9 millions; 2003-04 Rs. 574.3 millions)* under column “in US $ Millions” represents amount less than US$50,000/-

Previous year’s figures have been restated, wherever necessary, to conform to this year’s classification

F-5

Page 137: Tata Motors

SCHEDULE FORMING PART OF THE PROFIT AND LOSS ACCOUNT

SCHEDULE A

Year Ended March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

SALE OF PRODUCTS AND OTHER INCOME1. Sale of products and other income from operations

(a) Sale of Products / Services (Schedule 15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202,174.2 234,394.1 309,994.3 7,131.3(b) Income from Hire Purchase/Loan Contracts (Notes 1, 2, 3 & 4 below) . . . . . . . . . . . 1,594.7 4,326.7 5,465.1 125.7(c) Miscellaneous income (Note 5 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,021.1 1,293.6 2,082.7 47.9(d) Exchange differences (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1,304.8 30.0

204,790.0 240,014.4 318,846.9 7,334.9

2. Dividend and other income(a) Trade investments (long term) (Note 6 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 663.8 958.4 1,968.2 45.3(b) Other investments (long term) (Note 7 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.6 110.2 105.8 2.4(c) Other investments (current) (Note 8 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 466.5 179.4 138.4 3.2(d) Profit on sale of investments (net) (trade, long term) (Note 9 below) . . . . . . . . . . . . 469.0 1,642.8 239.5 5.5

1,660.9 2,890.8 2,451.9 56.4

206,450.9 242,905.2 321,298.8 7,391.3

Year Ended March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

Notes :(1) Value of Hire purchase contracts entered into during the year :

(i) Purchased vehicles (Note 2 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,301.9 74.6 487.2 11.2(ii) Vehicles from Company’s stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.9 0.7 — —

(2) Value of vehicles purchased and issued on Hire purchase contracts during the year . . . . 1,856.6 72.0 411.2 9.5(3) (i) Income from Hire purchase contracts includes net income from lease rentals and

income on securitisation / sale of receivables under Hire purchase contracts . . . . . . — 216.7 4.2 0.1(ii) Income from Loan contracts includes income on securitisation of Loan contracts

(net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139.5 762.8 775.0 17.8(4) Income from Loan contracts includes Interest income (net) . . . . . . . . . . . . . . . . . . . . . . . 1,003.3 3,052.5 4,315.0 99.3(5) Miscellaneous income include:

(i) Profit on sale of assets (net) [includes Capital Profits of Rs. 82.4 millions(2005-06 Rs. 1.2 millions, 2004-05 Rs. 23.1 millions)] . . . . . . . . . . . . . . . . . . . . . . 24.9 61.4 158.9 3.7

(ii) Insurance claims for loss of profit due to fire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 479.0 11.0(6) Dividend and other income from trade investments include dividend from subsidiary

companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198.2 414.0 869.4 20.0(7) Includes Tax deducted at source . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.3 9.6 19.3 0.4(8) Includes profit on sale of current investments (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.4 133.4 115.3 2.7(9) Include :

(i) Profit on sale of investments in subsidiary company [Note C(iv), Schedule 14 ] . . — 1,643.0 — —(ii) Additional consideration received in respect of Trade investment sold in

1999-2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167.4 — — —

F-6

Page 138: Tata Motors

SCHEDULE FORMING PART OF THE PROFIT AND LOSS ACCOUNT

SCHEDULE B

Year Ended March 31,

2005 2006 2007 2007

(in Rs Millions) (in US $Millions)

MANUFACTURING AND OTHER EXPENSES1. Purchase of products for sale etc [Note B (1) Schedule 14] . . . . . . . . . . . . . . . . . . . . . . . 6,692.3 9,987.4 14,592.0 335.72. Consumption of raw materials and components (Schedule 18) . . . . . . . . . . . . . . . . . . . . 112,602.5 132,651.2 179,157.3 4,121.43. Processing charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,556.6 6,257.0 8,237.9 189.54. Payments to and provisions for employees [Note B (5), Schedule 14]:

(a) Salaries, wages and bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,008.8 8,837.2 10,386.8 238.9(b) Contribution to provident and other funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,182.3 1,392.9 1,765.1 40.6(c) Workmen and staff welfare expenses [Note (i)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,242.7 1,241.6 1,526.4 35.1

10,433.8 11,471.7 13,678.3 314.65. Expenses for Manufacture, Administration and Selling :

(a) Stores, spare parts and tools consumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,331.4 3,691.6 5,046.3 116.1(b) Freight, transportation, port charges, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,393.1 3,351.3 4,790.4 110.2(c) Repairs to buildings [Note (ii)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242.1 276.7 234.9 5.4(d) Repairs to plant, machinery, etc. [Note (iii)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369.8 456.1 491.6 11.3(e) Power and fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,378.1 2,585.1 3,274.1 75.3(f) Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119.5 152.6 199.6 4.6(g) Rates and taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 287.9 335.8 325.1 7.5(h) Provision for Wealth tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5 4.3 6.5 0.1(j) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241.9 281.5 305.6 7.0(k) Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,723.7 1,872.5 2,515.4 57.9(l) Incentive / Commission to dealers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,446.3 2,335.2 3,326.5 76.5(m) Works operation and other expenses [Note (iv)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,472.4 10,403.9 14,541.1 334.5

21,011.7 25,746.6 35,057.1 806.46. Excise Duty on Stock-in-trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84.1 321.8 759.9 17.57. Changes in Stock-in-trade and Work-in-progress :

Opening Stock(i) Work-in-progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,766.4 2,644.6 2,863.1 65.9(ii) Stock-in-trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,752.9 5,332.9 7,683.5 176.8

6,519.3 7,977.5 10,546.6 242.7Add: Stock taken over on merger of spare parts division of Concorde Motors Ltd (now

known as Tata Motors Insurance Services Ltd.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.2 — — —Less—Closing Stock(i) Work-in-progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,644.6 2,863.1 3,013.2 69.3(ii) Stock-in-trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,332.9 7,683.5 11,030.2 253.7

7,977.5 10,546.6 14,043.4 323.0

(1,440.0) (2,569.1) (3,496.8) (80.3)

154,941.0 183,866.6 247,985.7 5,704.8

F-7

Page 139: Tata Motors

SCHEDULE FORMING PART OF THE PROFIT AND LOSS ACCOUNT

SCHEDULE B (Contd.)

Year Ended March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

NOTES :(i) Item 4 (c): Workmen and staff welfare expenses include provisions for other employee

benefit schemes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229.6 143.3 266.3 6.1(ii) Item 5 (c): Repairs to buildings exclude amounts charged to other revenue accounts . . . . 51.6 64.1 89.6 2.1(iii) Item 5 (d): Repairs to plant, machinery, etc. exclude amounts charged to other revenue

accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,067.4 1,026.9 1,236.3 28.4(iv) Item 5 (m): Works operation and other expenses include—

(1) Loss on assets scrapped / written off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.6 5.4 12.5 0.3(2) Lease rentals in respect of plant & machinery . . . . . . . . . . . . . . . . . . . . . . . . . . 102.2 81.6 29.4 0.7(3) Commission and Brokerage on sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251.0 36.4 53.3 1.2(4) Provision and write off for sundry debtors / advances (net) . . . . . . . . . . . . . . . 126.8 615.1 1,657.4 38.1(5) Securitisation expenses for Hire purchase / Loan contracts . . . . . . . . . . . . . . . . 62.7 485.9 629.5 14.5(6) Exchange differences (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258.4 198.4 — —(7) Contribution to Electoral Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.0 — — —

F-8

Page 140: Tata Motors

SCHEDULE FORMING PART OF THE PROFIT AND LOSS ACCOUNT

SCHEDULE B (Contd.)

Year Ended March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

MANAGERIAL REMUNERATION :1. Managerial remuneration for directors (excluding provision for encashable leave and gratuity as

separate actuarial valuation for whole-time directors is not available) [Note (a) and (b)(i) below] . . . 54.3 55.5 67.7 1.62. The above is inclusive of :

(a) Estimated expenditure on perquisites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6 3.7 2.4 0.1(b) Contribution to provident / superannuation funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.0 2.0 2.1 *(c) Commission to directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.5 39.0 52.0 1.2

3. Directors’ sitting fees [Note (b)(ii) below] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6 1.4 1.2 *

Notes :

(a) Excludes retirement benefits relating to former whole-time directors . . . . . . . . . . . . . . . . . . . . . . 2.9 2.9 3.7 0.1(b) Remuneration paid to the directors of erstwhile Tata Finance Ltd for the period between the

effective date of amalgamation till the date of approval (appointed date), has been excluded[Note C(ii), Schedule 14]. The particulars are as follows :(i) Remuneration to the Executive Director . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 8.8 — —(ii) Sitting fees (includes Rs. 10,000/- paid to an executive director of the Company in his

capacity as non-wholetime director of erstwhile Tata Finance Ltd) . . . . . . . . . . . . . . . . . . . . . — 0.2 — —

F-9

Page 141: Tata Motors

SCHEDULE FORMING PART OF THE BALANCE SHEET

SCHEDULE 1

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

SHARE CAPITAL [ Note A (1), Schedule 14 ]Authorised:

450,000,000 Ordinary Shares of Rs. 10 each (as at March 31, 2006 : 410,000,000 shares, as atMarch 31, 2005 : 400,000,000 shares) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000.0 4,100.0 4,500.0 103.5

4,000.0 4,100.0 4,500.0 103.5

Issued and subscribed:385,373,885 Ordinary Shares of Rs. 10 each (as at March 31, 2006 : 382,834,131 shares, as at

March 31, 2005 : 361,751,751 shares) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,617.5 3,828.3 3,853.7 88.7Less: Calls in arrears . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1 0.1 0.1 *

3,617.4 3,828.2 3,853.6 88.7Share Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.5 0.5 0.5 *

3,617.9 3,828.7 3,854.1 88.7

F-10

Page 142: Tata Motors

SCHEDULE FORMING PART OF THE BALANCE SHEET

SCHEDULE 2

As at April 1, For year ended March 31, As at March 31,

2004 2005 2006 2005 2006 2007 2005 2006 2007 2005 2006 2007 2007

Opening Balance(in Rs. Millions)

Additions(in Rs. Millions)

Deductions(in Rs. Millions)

Closing Balance(in Rs. Millions)

(in U.S. $Millions)

RESERVES AND SURPLUS(a) Securities premium account [Note (i) and

(ii)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,813.4 14,738.9 18,287.0 1,271.0 3,763.8 1,077.9 3,345.5 215.7 0.9 14,738.9 18,287.0 19,364.0 445.5(b) Capital redemption reserve [Note

(iii)(a)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.8 22.8 22.8 — 393.5 — — 393.5 — 22.8 22.8 22.8 0.5(c) Debenture redemption reserve [Note

(iii)(b)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,341.5 3,341.5 3,343.5 — 203.0 — — 201.0 — 3,341.5 3,343.5 3,343.5 76.9(d) Amalgamation reserve [Note (iii)(c)] . . . . 0.5 0.5 0.5 — 4.8 — — 4.8 — 0.5 0.5 0.5 *(e) Special reserve [Note (iii)(d)] . . . . . . . . . . — — 550.5 — 550.5 — — — — — 550.5 550.5 12.7(f) Revaluation Reserve [Note (iii)(e)] . . . . . . — — 263.9 — 268.2 — — 4.3 4.4 — 263.9 259.5 6.0(g) General reserve [Note (iv)] . . . . . . . . . . . . 8,531.5 13,536.3 21,306.2 5,004.8 9,360.3 10,000.0 — 1,590.4 141.9 13,536.3 21,306.2 31,164.3 716.9

28,709.7 31,640.0 43,774.4 6,275.8 14,544.1 11,077.9 3,345.5 2,409.7 147.2 31,640.0 43,774.4 54,705.1 1,258.5

(h) Profit and loss account . . . . . . . . . . . . . . . . 5,856.0 7,767.6 10,138.3 233.2

37,496.0 51,542.0 64,843.4 1,491.7

2004-05 2005-06 2006-07

Additions Deductions Additions Deductions Additions Deductions

Notes:-(i) The opening and closing balances of Securities Premium Account are net of calls in arrears of Rs 0.3 million . . . .(ii) Changes in Securities Premium Account

(a) Premium paid on early redemption of certain Non-Convertible Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 118.6 — — — —(b) Premium on shares issued upon exercise of warrants, Premium on shares issued on conversion of Foreign

Currency Convertible Notes (FCCN) and Premium on shares issued which were held in abeyance out of Rightissue of shares [Note A 1(c) to A 1(e), Schedule 14] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,271.0 — 3,648.2 — 938.4 —

(c) Consequent to amalgamation of Telco Dadajee Dhackjee Ltd [Note C (iii), Schedule 14] . . . . . . . . . . . . . . . . . — — 115.6 115.6 — —(d) FCCN issue expenses (2005-06 expenses net of tax) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 306.2 — 50.4 — —(e) Provision for premium on redemption of FCCN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2,920.7 — — — —(f) Exchange difference on Provision for premium on redemption of FCCN [including credit for reversal upon

conversion of FCCN Rs. 69.5 millions (2005-06 net of credit for reversal of Rs. 12.7 millions, 2004-05Rs. Nil)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 46.0 139.5 —

(g) Stamp Duty charges on conversion of FCCN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 3.7 — 0.9

1,271.0 3,345.5 3,763.8 215.7 1,077.9 0.9

F-11

Page 143: Tata Motors

SCHEDULE FORMING PART OF THE BALANCE SHEET

SCHEDULE 2 (Contd.)

2004-05 2005-06 2006-07

Additions Deductions Additions Deductions Additions Deductions

(iii) Changes consequent to amalgamations in 2005-06(a) Capital redemption reserve on account of amalgamation of Tata Finance Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 393.5 393.5 — —(b) Debenture redemption reserve on account of amalgamation of Tata Finance Ltd . . . . . . . . . . . . . . . . . . . . . . . . — — 203.0 201.0 — —(c) Amalgamation reserve on account of amalgamation of Tata Finance Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 4.8 4.8 — —(d) Special reserve on account of amalgamations of:

(i) Tata Finance Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 537.8 — — —(ii) Telco Dadajee Dhackjee Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 12.7 — — —

— — 550.5 — — —

(e) Revaluation reserve on account of:(i) Amalgamation of Telco Dadajee Dhackjee Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 268.2 — — —(ii) Depreciation on revalued portion of assets taken over on amalgamation of Telco Dadajee Dhackjee Ltd . . . — — — 4.3 — 4.4

— — 268.2 4.3 — 4.4

(iv) Changes in General Reserve(a) Upon amalgamation of:

(i) Tata Finance Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1,853.0 1,252.2 — —(ii) Telco Dadajee Dhackjee Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 7.3 330.5 — —(iii) Suryodaya Capital and Finance (Bombay) Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 7.7 — —

(b) Difference in opening liability upon implementation of Accounting Standard Revised AS 15 Employee Benefits(net of tax of Rs. 72.1 millions) [Note B(5)(d), Schedule 14] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — 141.9

(c) Excess of assets over liabilities on merger of spare parts division of Tata Motors Insurance Services Limited(formerly known as Concorde Motors Ltd.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8 — — — — —

(d) Amount transferred from Profit and Loss Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000.0 — 7,500.0 — 10,000.0 —

5,004.8 — 9,360.3 1,590.4 10,000.0 141.9

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SCHEDULES FORMING PART OF THE BALANCE SHEET

SCHEDULE 3

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

LOANS—Secured (Note A (2) Schedule 14)(a) Privately placed Non-Convertible Debentures:

(i) 14.75% Non-Convertible Debentures (2008) [Notes A(2)(i)(a) & A(2)(ii)] . . . . . . . . . . . . . 705.0 705.0 705.0 16.2(ii) 13.50% Non-Convertible Debentures (2005) [Notes A(2)(i)(a) & A(2)(ii)] . . . . . . . . . . . . 70.0 — — —(iii) Floating Rate Non-Convertible Debentures (2007) [Notes A(2)(i)(a) & A(2)(ii)]* . . . . . . 50.0 50.0 50.0 1.2

(b) Loan from Technology Development Board [Note A(2)(i)(b)] . . . . . . . . . . . . . . . . . . . . . . . . 230.0 180.0 60.0 1.4(c) Sales Tax Deferment Loan [Note A(2)(i)(e)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,106.1 869.8 732.8 16.9(d) Loans from Housing Development Finance Corporation Ltd. [Note A(2)(i)(c)] . . . . . . . . . . . 30.1 — — —(e) Loan from International Finance Corporation US$ 50 million [Note A(2)(i)(d)]** . . . . . . . . . 2,187.5 — — —(f) From Banks:

(i) Loans and Cash Credit Accounts [Note A(2)(i)(g)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349.1 5,779.8 14,007.5 322.2(ii) Loans and Overdraft Accounts [Note A(2)(i)(h)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170.3 643.0 352.5 8.1(iii) Buyers line of credit [Note A(2)(i)(f) and A(2)(i)(g)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 4,312.6 99.2

4,898.1 8,227.6 20,220.4 465.2

* At 1 year Government Security benchmark semi-annual rate + 140 basis points** At 6 month LIBOR + 150 basis points

SCHEDULE 4

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

LOANS—Unsecured(a) Foreign Currency Convertible Notes (FCCN) [Note (C) (i) Schedule 14] . . . . . . . . . . . . . . 17,962.0 19,046.2 17,646.9 405.9(b) Long term loans in foreign currency (others) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,092.4 2,091.0 2,028.3 46.7(c) Loans from others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7 3.6 195.8 4.5

20,056.1 21,140.8 19,871.0 457.1

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SCHEDULE FORMING PART OF THE BALANCE SHEET

SCHEDULE 5

Cost as at March 31, [Note (iv)]Accumulated Depreciation up to

March 31, [Note (v) and (viii)]Net Book Valueas at March 31,

2005 2006 2007 2005 2006 2007 2005 2006 2007 2007

(in Rs. Millions) (in Rs. Millions) (in Rs. Millions) (in U.S. $Millions)

FIXED ASSETS(a) Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.0 53.1 53.1 — — — 4.0 53.1 53.1 1.2(b) Buildings, etc. [Note (i), (ii)(a) & (iii)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,238.1 8,020.6 8,391.1 2,156.1 2,344.8 2,564.2 5,082.0 5,675.8 5,826.9 134.0(c) Leasehold Land [(Note (ii)(b)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 387.4 387.4 722.7 36.5 40.3 44.4 350.9 347.1 678.3 15.6(d) Railway Sidings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 — — 1.3 — — — — — —(e) Plant & Machinery and Equipment, etc. [Note (ii)(a) & (iii)] . . . . . . . . . . . . . . . . 53,255.8 60,000.1 67,074.4 30,115.3 34,255.5 38,181.4 23,140.5 25,744.6 28,893.0 664.7(f) Water System and Sanitation [Note (ii)(a)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425.6 452.2 554.7 195.6 213.6 233.5 230.0 238.6 321.2 7.4(g) Furniture, Fixtures and Office Appliances [Note (iii)] . . . . . . . . . . . . . . . . . . . . . 443.4 702.7 734.2 242.0 347.6 369.2 201.4 355.1 365.0 8.4(h) Technical Know-how . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345.1 345.1 345.1 345.1 345.1 345.1 — — — —(j) Vehicles and Transport [Note (iii)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 788.9 932.8 1,022.6 500.3 568.5 595.7 288.6 364.3 426.9 9.8(k) Plant taken on lease [Note (vii)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,887.3 1,885.7 1,507.5 729.3 885.0 883.9 1,158.0 1,000.7 623.6 14.3(l) Leased premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 312.8 312.8 — 6.6 11.7 — 306.2 301.1 6.9(m) Assets given on lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 4,517.0 4,429.4 — 4,257.0 4,193.1 — 260.0 236.3 5.4(n) Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 580.8 911.3 1,255.6 16.5 204.7 500.1 564.3 706.6 755.5 17.4(o) Product Development Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 761.8 1,194.7 1,354.8 204.8 546.4 1,023.1 557.0 648.3 331.7 7.6

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66,119.5 79,715.5 87,758.0 34,542.8 44,015.1 48,945.4 31,576.7 35,700.4 38,812.6 892.7

Capital Work-in-Progress [Note (vi)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,388.4 9,511.9 25,133.2 578.2

Grand Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,965.1 45,212.3 63,945.8 1,470.9

Notes:

(i) Buildings include Rs. 8,631 (As at March 31, 2006 Rs. 8,881, as at March 31, 2005 Rs. 10,631) being value of investments in shares of Co-operative Housing Societies.(ii) (a) Buildings, Water system and Sanitation and Plant and Machinery include Gross block Rs 47.6 millions, Rs.15.0 millions, Rs. 37.6 millions (as at March 31, 2006 Rs 47.6 millions, Rs.15.0

millions, Rs. 37.6 millions; as at March 31, 2005 Rs 47.6 millions, Rs.15.0 millions, Rs. 35.5 millions and Net block Rs. 0.8 million, Rs. 0.8 million and Rs. 3.5 millions (as at March 31, 2006Rs 1.2 millions, Rs.0.8 million, Rs. 4.1 millions; as at March 31, 2005 Rs 3.1 millions, Rs.0.8 million, Rs. 7.3 millions respectively , in respect of expenditure incurred on capital assets,ownership of which does not vest in the Company.

(b) The registration of leasehold land acquired during 2006-07 is in process.(iii) Includes Buildings, Plant & Machinery and Equipment, Furniture, Fixtures and Office Appliances and Vehicles and Transport having Gross Block of Rs. NIL, Rs. 1441.5 million, Rs.

4.5 million, Rs. 13.6 million (as at March 31, 2006, Rs. 0.2 million, Rs. 397.5 million, Rs. 3.9 million, Rs. 4.4 million; as at March 31, 2005, Rs. NIL, Rs. 452.0 Millions, Rs. 0.2 Million, Rs.0.9 Million), and Net Block of Rs. NIL, Rs. 78.9 million, Rs. 0.1 million and Rs. 1.0 million (as at March 31, 2006, Rs. NIL, Rs. 10.5 million, Rs. NIL, Rs. 0.2 million; as at March 31, 2005,Rs. NIL, Rs. 9.6 Millions, Rs. NIL and Rs. NIL) respectively, held for disposal.

(iv) Cost of fixed assets includes:(a) exchange differences and net premiums on derivative contracts, net gain of Rs.170.8 million (as at March 31, 2006 net loss of Rs. 24.9 million; as at March 31, 2005 Rs. Nil).(b) Rs. 6,546.5 million, including assets given on lease prior to April 1, 2001, taken over on amalgamation of Tata Finance Ltd (TFL) with effect from April 1, 2005.(c) Rs. 380 million taken over on amalgamation of Telco Dadajee Dhakjee Ltd (TDDL) with effect from April 1, 2005.

(v) Accumulated Depreciation includes:(a) an adjustment of Rs. 899.2 millions (as at March 31, 2006 Rs.540.2 millions; as at March 31, 2005 Rs. 197.3 millions) on assets transferred / sold / discarded during the year.(b) Rs. 4,749.7 millions (including lease terminal adjustment of Rs. 1,616.3 millions) and Rs. 33.7 millions taken over on amalgamation of TFL and TDDL respectively with effect from April 1,

2005.(c) lease equalisation of Rs. 37.8 millions (2005-06 Rs. 15.4 millions; 2004-05 Rs.NIL) adjusted in lease rental income.(d) depreciation of Rs. 4.4 millions (2005-06 Rs. 4.3 millions) on revalued portion of gross block of TDDL transferred to Revaluation Reserve.(e) includes loss of Rs. 113.7 millions (2005-06 Rs. 53.2 millions; 2004-05 Rs. 195.4 millions) on assets held for disposal and is net of a credit on reversal of write down Rs. NIL (2005-06 Rs.

70.6 millions; 2004-05 Rs. 70.6 millions).(vi) Capital Work-in-progress includes:

(a) Product Development Cost Rs. 4,195.6 millions (as at March 31, 2006 Rs. 1,670.7 millions, as at March 31, 2005 Rs. 869.1 millions) and Technical Know-how fees for Product developmentprojects Rs. 4,744.2 millions (as at March 31, 2006 Rs. 2,076 millions, as at March 31, 2005 Rs. 844.7 millions).

(b) advances for capital expenditure of Rs. 4,156 millions (as at March 31, 2006 Rs.752.2 millions; as at March 31, 2005 Rs. 589.2 millions)(c) exchange differences and net premiums on derivative contracts, net gain of Rs. 54 millions (as at March 31, 2006 net loss of Rs. 13.1 millions; as at March 31, 2005 Rs. Nil).

(vii) The assets are under renewable secondary lease.(viii) Accumulated Depreciation includes amortisation, diminution in value of assets and write down of assets net of reversals.

F-14

Page 146: Tata Motors

SCHEDULE FORMING PART OF THE BALANCE SHEET

INVESTMENTS

SCHEDULE 6

As at March 31, 2007

Number

Face ValuePer UnitRupees Description

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

I. Long Term Investments (at Cost)(A) Trade Investments

(1) Fully paid Ordinary/Equity shares (Quoted)493,970 10 Automobile Corporation of Goa Ltd. . . . . . . . . . . . . . . . . . . 8.8 8.8 8.8 0.2

25,806,729 10 Tata Steel Ltd [Note 15] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,162.3 2,162.3 2,162.3 49.7— — Tata Finance Ltd [Note 13] . . . . . . . . . . . . . . . . . . . . . . . . . . 599.3 — — —

70,249 10 Tata Chemicals Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4 2.4 2.4 0.1

2,772.8 2,173.5 2,173.5 50.0

(2) Investments in Subsidiary Companies(a) Fully Paid Ordinary / Equity Shares (Unquoted)

7,500,000 100 Sheba Properties Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 750.0 750.0 750.0 17.330,300,600 10 Tata Technologies Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221.0 2,241.0 2,241.0 51.6

— — Telco Dadajee Dhackjee Ltd [Note 13] . . . . . . . . . . . . . . . . . 452.7 — — —59,750,000 10 Telco Construction Equipment Company Ltd [Note 10] . . . . 1,595.0 1,195.0 1,195.0 27.52,448,120 10 Concorde Motors (India) Ltd. . . . . . . . . . . . . . . . . . . . . . . . . 296.3 296.3 296.3 6.8

65,000,000 10 TAL Manufacturing Solutions Ltd. (Note 7) . . . . . . . . . . . . . 1,500.0 1,500.0 1,500.0 34.540,000,000 10 HV Transmissions Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800.0 800.0 800.0 18.445,000,000 10 HV Axles Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900.0 900.0 900.0 20.7

500,000 10 Tata Motors Insurance Services Ltd [Note 16] . . . . . . . . . . . 173.1 173.1 173.1 4.0— — Suryodaya Capital and Finance (Bombay) Ltd [Note 13] . . . 8.2 — — —

3,016,060 (KRW) 5000 Tata Daewoo Commercial Vehicle Co. Ltd (Korea) . . . . . . . 2,487.5 2,454.1 2,454.1 56.5500,000 (GBP) 1 Tata Motors European Technical Centre Plc, UK . . . . . . . . . — 40.2 40.2 0.9

7,900 — INCAT Systems Inc. (formerly Tata Technologies Ltd,USA) [Note 9] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 6.3 6.3 0.1

450,000,000 10 TML Financial Services Ltd. . . . . . . . . . . . . . . . . . . . . . . . . — — 5,500.0 126.5(450,000,000 shares acquired during 2006-07)

25,500 10 Tata Marcopolo Motors Ltd. . . . . . . . . . . . . . . . . . . . . . . . . — — 0.3 *(25,500 shares acquired during 2006-07)

9,183.8 10,356.0 15,856.3 364.8(b) Partly Paid Up Equity Shares (Unquoted)

3,507,000 (THB) 100 Tata Motors (Thailand) Ltd (25% paid Up) . . . . . . . . . . . . . . — — 116.1 2.7(3,507,000 Shares acquired during 2006-07)

(c) Fully paid Cumulative Redeemable Preference Shares(Unquoted)

1,354,195 100 7% Concorde Motors (India) Limited . . . . . . . . . . . . . . . . . . 119.3 135.4 135.4 3.1

9,303.1 10,491.4 16,107.8 370.6

(3) Fully Paid Ordinary / Equity Shares (Unquoted) in Others5,059,203 1(S$) Tata Precision Industries Pte. Ltd., (Singapore) [Note 5] . . . . . . . 31.1 31.1 31.1 0.7

25,000 1000 Tata International Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.5 38.5 38.5 0.91,383 1000 Tata Services Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4 1.4 1.4 *

350 900 The Associated Building Company Ltd. . . . . . . . . . . . . . . . . . . . 0.1 0.1 0.1 *6,665,780 100 Tata Industries Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 779.4 829.7 829.7 19.1

22,500 100 Tata Projects Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.8 1.8 46.8 1.1(7,500 shares allotted @ Rs. 6,000/- per share on conversion of7,500 partly convertible debentures during 2006-07) . . . . . . . . . .

16,000 (TK)1000 NITA Co. Ltd., (Bangladesh) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.7 12.7 12.7 0.333,600 100 Kulkarni Engineering Associates Ltd. . . . . . . . . . . . . . . . . . . . . . 6.7 6.7 6.7 0.2

90,000,000 10 Tata Cummins Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900.0 900.0 900.0 20.712,375 1000 Tata Sons Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687.5 687.5 687.5 15.8

— — Tata Holset Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.5 22.5 — —(2,250,000 shares sold during 2006-07)

22,000,200 10 Tata Teleservices Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.0 320.0 320.0 7.483,867,086 10 Tata AutoComp Systems Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . 986.7 986.7 986.7 22.722,500,001 10 Haldia Petrochemicals Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225.0 225.0 225.0 5.2

28,263 (Euro) 31.28 Hispano Carrocera, S. A [Note 8] . . . . . . . . . . . . . . . . . . . . . . . . . 23.4 23.4 23.4 0.5300,430 10 Tata Securities Private Ltd [Note 14] . . . . . . . . . . . . . . . . . . . . . . . — 1.4 1.4 *

[184,880 Bonus shares received during 2006-07] . . . . . . . . . . . . .240,000 10 Oriental Floratech (India) Pvt. Ltd [Note 14] . . . . . . . . . . . . . . . . . — 2.4 2.4 0.1

49,436 100 TSR Darashaw Ltd [Notes 14 & 17] . . . . . . . . . . . . . . . . . . . . . . . — 36.3 19.4 0.4(42,886 shares sold during 2006-07) . . . . . . . . . . . . . . . . . . . . . . .

3,736.8 4,127.2 4,132.8 95.1

Carried forward 15,812.7 16,792.1 22,414.1 515.7

F-15

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SCHEDULE FORMING PART OF THE BALANCE SHEET

INVESTMENTS (Contd.)

SCHEDULE 6 (Contd.)

Number

FaceValue Per

UnitRupees Description

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

I. Long Term Investments (at Cost) (Contd.)Brought forward 15,812.7 16,792.1 22,414.1 515.7

(4) Fully paid Cumulative Redeemable Preference Shares(Unquoted) in others

100,000 1,000 6% Tata Sons Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0 100.0 100.0 2.321,000,000 10 7% Tata AutoComp Systems Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . 210.0 210.0 210.0 4.8

5,000,000 10 7.50% Rallis India Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.0 50.0 50.0 1.2

360.0 360.0 360.0 8.3

(5) Non Convertible Debentures (Unquoted)— — 11.00% Automobile Corporation of Goa Ltd. . . . . . . . . . . . . . . . . . 60.0 — — —— — 0.01% Tata Finance Limited [Note 13] . . . . . . . . . . . . . . . . . . . . . . . 1,500.0 — — —

680,000 100 Rushi Automobiles Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 23.8 18.9 0.47,500 3000 8% Tata Projects Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 22.5 0.5

(15,000 partly convertible debentures allotted during 2006-07 ofwhich 7,500 were converted into 7,500 fully paid shares)

1,560.0 23.8 41.4 0.9

Total (A) Trade Investments . . . . . . . . . . . . . . . . . . . . . . . . . . 17,732.7 17,175.9 22,815.5 524.9

(B) Other Investments(1) Fully paid Equity Shares (Unquoted)

50,000 10 NICCO Jubilee Park Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.5 0.5 0.5 *(2) Fully paid Corporate Bonds (Quoted)

10 10,000,000 6.25% EXIM 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97.9 97.9 97.9 2.310 10,000,000 6.50% EXIM 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98.7 98.7 98.7 2.3

5 10,000,000 8.30% EXIM 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.7 51.7 51.7 1.2100 1,000,000 8.60% HDFC Limited 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104.2 104.2 104.2 2.4700 500,000 8.70% Indogulf Fertilisers Limited 2007 . . . . . . . . . . . . . . . . . . . . . . 365.7 365.7 365.7 8.4

— — 10.25% Indian Oil Corporation 2006 . . . . . . . . . . . . . . . . . . . . . . . . . 53.2 53.2 — —— — 5.00% Tax free National Housing Bank 2005 . . . . . . . . . . . . . . . . . . 50.2 — — —25 10,000,000 6.60% Panatone Fininvest Ltd 2008 . . . . . . . . . . . . . . . . . . . . . . . . . 246.2 246.2 246.2 5.7

3,607,493 100 6.75% Tax free Unit Trust of India 2008 . . . . . . . . . . . . . . . . . . . . . . 378.5 378.5 378.5 8.710 10,000,000 7.10% Tata Sons 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0 100.0 100.0 2.3

1,546.3 1,496.1 1,442.9 33.3

Total (B) Other Investments . . . . . . . . . . . . . . . . . . . . . . . . . . 1,546.8 1,496.6 1,443.4 33.3

Long Term Investments (Sub-total A + B) . . . . . . . . . . . . . . 19,279.5 18,672.5 24,258.9 558.2Less: Provision for Diminution in value of Long Term

Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 853.4 777.2 785.8 18.1

Total (I) Long Term Investments . . . . . . . . . . . . . . . . . . . . . . 18,426.1 17,895.3 23,473.1 540.1

II. Current Investments—others (at Cost or Fair value whichever islower)

(A) Investments in Mutual Fund (Unquoted)(a) Floater Dividend (including dividend reinvested)

— — Deutsche Floating Rate Fund Regular Plan—Weekly Dividend . . . 150.8 — — —— — HDFC Floating Rate Income Fund—Short Term Plan Growth . . . . 52.3 — — —

— —HSBC Floating Rate Fund—Long Term Plan Institutional

Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257.4 — — —— — HSBC Floating Rate—Long Term Plan Institutional Option . . . . . . 202.0 — — —— — ING Vysa Floating Rate Fund—Quarterly Dividend . . . . . . . . . . . . 151.8 — — —— — J M Floater (Long-Term) Premium Dividend . . . . . . . . . . . . . . . . . . 355.3 — — —— — Kotak Flexidebt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182.6 — — —— — Kotak Floater Long Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.8 — — —— — Principal Floating Rate Fund—FMP—Institutional Option . . . . . . . 102.2 — — —

(b) Liquid Dividend Plan (including dividend reinvested)— — DSP Liqidity Fund—Weekly Dividend . . . . . . . . . . . . . . . . . . . . . . . 300.5 — — —

— —HDFC Cash Management Savings Plan—Weekly Dividend

Reinvestment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400.0 — — —— — HDFC Cash Management Savings Plus Plan—Dividend . . . . . . . . . 551.5 — — —— — HSBC Cash Fund Institutonal Plus—Weekly Dividend . . . . . . . . . . 1.9 — — —— — JM High Liquidity Super Institutional . . . . . . . . . . . . . . . . . . . . . . . . 380.3 — — —— — Kotak Liquid IP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.2 — — —— — Principal Cash Management Fund—Institutional Premium Plan . . . 553.7 — — —— — SBI Magnum Institutional Income—Savings—Dividend . . . . . . . . . 351.3 — — —— — Tata Liquid Super High Investment Fund—Weekly Dividend . . . . . 650.1 — — —— — UTI Liquid Cash Plan Institutional—Weekly Income Option . . . . . 150.1 — — —

Investments in Mutual Fund (Unquoted) Carried forward 4,996.8 — — —

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SCHEDULE FORMING PART OF THE BALANCE SHEET

INVESTMENTS (Contd.)

SCHEDULE 6 (Contd.)

Number

Face ValuePer UnitRupees Description

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

II. Current Investments—others (at Cost or Fair value whichever is lower) (Contd.)(A) Investments in Mutual Fund (Unquoted) (Contd.)

Investments in Mutual Fund (Unquoted) Broughtforward 4,996.8 — — —

(c) Short Term Plan (including dividend reinvested)

— —Birla Bond Plus Institutional Plan—Dividend

Reinvestment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75.3 — — —— — Deutsche Short Maturity Fund—Weekly Dividend Plan . . . 150.8 — — —— — Reinvestment monthly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75.2 — — —— — Prudential ICICI Institutional Short Term Plan . . . . . . . . . . 150.0 — — —

(d) Monthly Income Plan— — HDFC Multiple Yield Fund—Growth . . . . . . . . . . . . . . . . . 200.0 200.0 — —

(e) Fixed Maturity Plan— — Birla Fixed Maturity Plan Yearly Growth 14 Plan B . . . . . . 150.0 — — —— — Birla Fixed Term Plan Series A—Growth . . . . . . . . . . . . . . 250.0 250.0 — —— — Grindlays Fixed Maturity Annual Plan Growth . . . . . . . . . . 250.0 — — —— — Grindlays Fixed Maturity Annual Plan 2 . . . . . . . . . . . . . . . 191.9 — — —— — Grindlays Fixed Maturity 7th Plan B—Growth . . . . . . . . . . 100.0 100.0 — —

— —HDFC Fixed Investment Plan—March 2004

(I)—Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150.0 — — —— — HDFC Fixed Investment Plan July 2004 (2)—Growth . . . . . 330.0 — — —

— —ING Vysa Fixed Maturity Fund Series -(2)- Growth

Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0 100.0 — —— — JM Fixed Maturity Plan QSA5 . . . . . . . . . . . . . . . . . . . . . . . 302.6 — — —

— —Principal Deposit Fund (FMP-6) 371days—March 2004

Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150.0 — — —— — Principal Deposit Fund (FMP-3) 91days . . . . . . . . . . . . . . . . 100.8 — — —— — Pru ICICI FMP Quarterly Series XXV . . . . . . . . . . . . . . . . . 253.0 — — —

— —SBI Magnum Debt Fund Series 60 days (FEB 05 Series)Dividend Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151.1 — — —

— —SBI Magnum Debt Fund Series 15 mths (Jan’ 05) Growth

Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200.0 200.0 — —— — Tata Fixed Horizon Fund Yearly—Growth . . . . . . . . . . . . . . 130.0 — — —— — Tata Fixed Horizon Fund Yearly Growth Sept’ 04 . . . . . . . . 500.0 — — —

— —Tata Fixed Horizon Series 1—Plan A (371

Days)—Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150.0 150.0 — —— — Tata Fixed Horizon Yearly Growth (Jan’ 05) . . . . . . . . . . . . 150.0 — — —— — Tata Fixed Horizon Fund Yearly Growth (Nov’ 04) . . . . . . . 100.0 — — —— — UTI FMP-QFMP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0 — — —— — UTI FMP-YFMP—Growth Plan . . . . . . . . . . . . . . . . . . . . . . 250.0 250.0 — —

(f) Income Plan30,000,000 10 JM Equity and Derivative Fund Growth . . . . . . . . . . . . . . . . 300.0 300.0 300.0 6.921,757,084 10 JM Equity and Derivatives fund—Dividend Option . . . . . . . — 205.5 219.9 5.1

(B) Investments in Equity shares (Quoted)35,000 10 Elcot Power Control Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . — 3.7 3.7 0.191,800 10 Munis Forge Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 3.7 3.7 0.130,997 10 Roofit Industries Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1.9 1.9 *

(C) Investments in Government Securities (Quoted)— — 11.50% Government of India 2007 Stock . . . . . . . . . . . . . . . — 0.3 — —

170 1000 12.00% Uttar Pradesh 2011 Stock . . . . . . . . . . . . . . . . . . . . . — 0.2 0.2 *200 1000 13.00% Maharashtra State Development Loan 2007 . . . . . . — 0.2 0.2 *

7,500 100013.00% Industrial Finance Corporation of India 2007

Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 7.5 7.5 0.2— — 12.50% Madhya Pradesh Electricity Board 2007 Bonds . . . — 10.0 — —

(D) Investments in Preference Shares (Unquoted)100,000 100 15.50% Pennar Paterson Securities Ltd . . . . . . . . . . . . . . . . . — 10.0 10.0 0.2

200,000 10015.00% Atcom Technologies Ltd.—Cumulative Preference

Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 20.0 20.0 0.5

10,007.5 1,813.0 567.1 13.1Less: Provision for Diminution in value of Current

Investments — 39.3 39.3 0.9

Total (II)—Current Investments . . . . . . . . . . . . . . . . 10,007.5 1,773.7 527.8 12.2

III. Retained interest in securitisation transactions ( Unquoted)(long term) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687.0 482.5 769.1 17.7

Total—Investments (I + II + III) . . . . . . . . . . . . . . . . 29,120.6 20,151.5 24,770.0 570.0

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SCHEDULE FORMING PART OF THE BALANCE SHEET

INVESTMENTS (Contd.)

SCHEDULE 6 (Contd.)

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

NOTES :(1) Face Value per unit in Rupees unless stated otherwise . . . . . . . . . . . . . . . . . . . . . . . . . . . .(2) Book Value of quoted investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,319.1 3,665.8 3,591.4 82.6(3) Book Value of unquoted investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,801.5 16,485.7 21,178.6 487.2(4) Market Value of quoted investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,608.5 15,500.0 13,230.8 304.4(5) The Company has, given an undertaking to Citibank NA, for non-disposal of its

shareholding in Tata Precision Industries Pte Ltd (TPI), Singapore against loans andother facilities extended by the Bank to TPI and Tata Engineering Services Pte Ltd(TES), Singapore, a wholly owned subsidiary of TPI, aggregating Singapore $ 3 Millionand Singapore $ 10.85 Million respectively.

(6) i) During 2004-05, in terms of the Scheme approved by The High Courts ofJudicature at New Delhi and Mumbai, the Sales and Service division of ConcordeMotors Ltd (CML) was transferred to Concorde Motors (India) Ltd. (CMIL) and inconsideration of such divestment of net assets, CMIL issued 2,435,000 PreferenceShares of Face Value Rs.100 each at par to the shareholders of CML. TheCompany received 1,193,150 Preference Shares issued by CMIL and accordinglythe cost of investments in CML was adjusted.

ii) The Company made a further investment of Rs. 92.4 Millions on October 21, 2004in CML by way of purchase of shares. Consequently, CML became 100%subsidiary of the Company.

iii) During 2004-05, CML effected reduction of it’s Equity Share Capital as per thescheme approved by The High Court of Judicature at Mumbai. Consequent to suchreduction of Share Capital, the Company holds 500,000 shares of face value of Rs10 each in CML in place of 24,350,000 shares of Rs 10 each.

(7) The Company has an investment of Rs. 1,500.0 Millions (As at March 31, 2006 Rs.1,500.0 Millions, As at March 31, 2005 Rs.1,500.0 Millions) in TAL ManufacturingSolutions Ltd. (TAL). During 2004-05, TAL has effected reduction of its Equity ShareCapital as per the Scheme approved by The High Court of Judicature at Mumbai.Consequent to such reduction of Share Capital, the Company holds 65,000,000 shares offace value of Rs 10 each in TAL in place of 150,000,000 shares of Rs 10 each. Theprovision of Rs. 600 millions (as at March 31, 2006, Rs. 600 millions; as at March 31,2005, Rs. NIL) towards diminution in value of investments in TAL, is considered by themanagement to be adequate.

(8) The Company acquired 21% shares in Hispano Carrocera, S.A. on March 16, 2005. Asper the terms of agreement, the Company has given an unsecured loan of Euro 7 million(Rs. 405.2 millions) and the Company has an Option to acquire the remaining 79% ofthe shares through one or more transfers, as per terms and conditions duly agreed uponat a price not exceeding Euro 2 millions. The Company has also given a letter of comfortto Standard Chartered Bank and Citibank NA against working capital loans extended byboth the banks to Hispano aggregating Euro 7 million each. The Company has alsogiven an undertaking to Standard Chartered Bank and Citibank NA for non-disposal ofits shareholding in Hispano during the tenure of the loan.

(9) The Company has given a letter of comfort to Standard Chartered Bank against the termloan upto US $ 60 million extended by the bank to INCAT Systems Inc. (formerly TataTechnologies Ltd, USA), an indirect subsidiary of the Company.

(10) As per the shareholders agreement dated December 9, 2005, between HitachiConstruction Machinery Co. Ltd and the Company, these shares are under restriction forsale, assign or transfer for a period of 5 years from the date of the agreement.

(11) Trade Investments also include:

Number

FaceValue

Per UnitRupees Description Rupees Rupees Rupees

5,000 10 Metal Scrap Trade Corporation Ltd. . . . . . . . . . . . 25,000 25,000 25,00050 5 Jamshedpur Co-operative Stores Ltd. . . . . . . . . . . 250 250 250

1,656,517 1(M$) Tatab Industries Sdn. Bhd. Malaysia . . . . . . . . . . . . 1 1 1100 10 American Express Services Ltd . . . . . . . . . . . . . . . — 1 1

4 25,000 ICICI Money Multiplier Bond . . . . . . . . . . . . . . . . . — 1 1100 10 Optel Telecommunications . . . . . . . . . . . . . . . . . . . — 1,995 1,995200 10 Punjab Chemicals . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1 1

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SCHEDULE FORMING PART OF THE BALANCE SHEET

INVESTMENTS (Contd.)

SCHEDULE 6 (Contd.)

(12) Current Investments acquired and sold during 2006-07:

NameNo. ofUnits

Face valuein Rs. Millions

Purchase Costin Rs. Millions

(in U.S. $Millions)

Birla Cash Plus IP Premium—Weekly Dividend Reinvestment . . . . . . . . . . . . . . . . . . 133,636,183 1,336.4 1,340.4 30.8Birla Sun Life Cash Manager-IP—Daily Dividend Reinvestment . . . . . . . . . . . . . . . . 135,030,032 1,350.3 1,350.6 31.1Grindlays CF Super IP C Daily Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,007,439 500.1 500.1 11.5HDFC Liquid Fund Premium Plan—Daily Dividend Reinvest . . . . . . . . . . . . . . . . . . 40,790,685 407.9 500.1 11.5ING Vysya Liquid Fund Super Institutional—Daily Dividend Option . . . . . . . . . . . . . 84,990,973 849.9 850.1 19.6ING Vysya Liquid Fund Institutional Weekly Dividend Option . . . . . . . . . . . . . . . . . 44,616,300 446.2 450.0 10.4JM Equity and Derivative Fund—Dividend Option . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,394,656 13.9 14.3 0.3LIC Liquid Fund-Dividend Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314,275,192 3,142.8 3,450.6 79.4Principal Cash Management fund Institutional Premium Plan—Weekly Dividend . . . 473,968,864 4,739.7 4,741.4 109.1Principal Cash Management Fund-Liquid Option-Inst Premium- Dividend

Reinvestment Daily . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,004,315 600.0 600.1 13.8Prudential ICICI Institutional Liquid Plan—Super Institutional Daily Dividend . . . . . 204,036,053 2,040.4 2,040.4 46.9SBI Magnum Institutional Income-Savings Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . 358,921,705 3,589.2 3,600.9 82.8Tata Liquid Super High Investment Fund-Daily Dividend . . . . . . . . . . . . . . . . . . . . . . 1,884,634 1,884.6 2,100.5 48.3Templeton India Treasury Management Account Super Institutional Plan-Daily

Dividend Reinvestment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249,974 2.5 250.0 5.8Templeton India Treasury Management Account Super Institutional Plan—Weekly

Dividend Reinvestment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 640,304 6.4 650.8 15.0UTI Liquid Cash Plan Institutional—Daily Income Option-Reinvestment . . . . . . . . . 2,891,209 2,891.2 2,947.0 67.8

(13) Consequent to amalgamation of Tata Finance Ltd, Telco Dadajee Dhackjee Ltd, Suryodaya Capital and Finance (Bombay) Ltd with thecompany, the cost of investment in these companies have been adjusted as per the scheme [Note C(ii) & C(iii), Schedule 14].

(14) Acquired on amalgamation of Tata Finance Ltd.(15) With effect from August 12, 2005, the name of Tata Iron and Steel Company Ltd. has been changed to Tata Steel Ltd.(16) With effect from October 5, 2005, the name of Concorde Motors Limited has been changed to Tata Motors Insurance Services Ltd(17) With effect from January 12, 2006, the name of Tata Share Registry Ltd has been changed to TSR Darashaw Ltd.

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SCHEDULES FORMING PART OF THE BALANCE SHEET

SCHEDULE 7

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

INVENTORIES (As valued and certified by the Management)(a) Stores and spare parts (at or below cost) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,423.5 1,355.0 1,390.0 32.0(b) Consumable tools (at cost) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180.5 165.2 174.4 4.0(c) Raw materials and components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,300.6 7,326.9 8,725.9 200.7(d) Work-in-progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,644.6 2,863.1 3,013.2 69.3(e) Stock-in-trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,332.9 7,683.5 11,030.2 253.7(f) Goods-in-transit (at cost) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131.5 728.7 675.8 15.6

16,013.6 20,122.4 25,009.5 575.3

Note: Items (c), (d) and (e) above are valued at lower of cost and net realisable value.

SCHEDULE 8

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

SUNDRY DEBTORS(a) Over six months : (unsecured)

Considered good. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196.4 355.7 565.6 13.0Considered doubtful . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 521.0 342.9 318.0 7.3

(b) Others (unsecured)Considered good . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,952.7 6,183.8 6,792.0 156.2

5,670.1 6,882.4 7,675.6 176.5Less : Provision for doubtful debts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 521.0 342.9 318.0 7.3

5,149.1 6,539.5 7,357.6 169.2(c) Future instalments receivable from hirers/lessees [secured under Hire purchase / lease

agreements and by promissory notes from hirers]—[Note A(4) Schedule 14]:Considered good . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,174.1 656.9 510.9 11.8Considered doubtful . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.5 218.0 112.4 2.6

3,221.6 874.9 623.3 14.4Less : Provision for doubtful instalments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.5 218.0 112.4 2.6

3,174.1 656.9 510.9 11.8Unearned finance and service charges on lease receivable /hire purchase contracts . . . . . . (337.4) (30.4) (46.7) (1.1)

2,836.7 626.5 464.2 10.7

7,985.8 7,166.0 7,821.8 179.9

SCHEDULE 9

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

CASH AND BANK BALANCES(a) Cash on hand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.0 68.0 27.6 0.6(b) Current Accounts with Scheduled Banks [including in foreign currencies Rs. 78.4

millions (as at March 31, 2006 Rs. 114.3 millions, as at March 31, 2005 Rs. 215.5millions) and cheques on hand Rs. 1,387.6 millions (as at March 31, 2006 Rs. 1,268.8millions as at March 31, 2005 Rs. 1,182.6 millions) and remittances in transit Rs. 2,349.8millions (as at March 31, 2006 Rs.1,055.9 millions; as at March 31, 2005 Rs. 992.6millions)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,439.6 3,208.6 5,330.2 122.7

(c) Short term deposits with Scheduled Banks [including in foreign currencies Rs. NIL (as atMarch 31, 2006 Rs. 4,407.2 millions, as at March 31, 2005 Rs. 11,795.8 millions)]* . . . . 15,841.9 5,089.0 1.8 *

(d) Margin Money/Cash Colleteral with Scheduled Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 755.9 2,828.7 2,908.0 66.9

20,050.4 11,194.3 8,267.6 190.2

* Includes unutilised proceeds from FCCN issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,568.5 4,407.2 — —

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SCHEDULES FORMING PART OF THE BALANCE SHEET

SCHEDULE 10

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

LOANS AND ADVANCESA) SECURED

Vehicle loans [Note 1 below and [Note A(4) Schedule 14]]*Considered good . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,581.3 44,233.0 42,474.1 977.1Considered doubtful . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268.3 1,105.5 1,689.5 38.9

14,849.6 45,338.5 44,163.6 1,016.0Less: Provision for doubtful loans # . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268.3 1,105.5 1,689.5 38.9

14,581.3 44,233.0 42,474.1 977.1

__________* Includes Rs. 2685.9 millions (as at March 31, 2006 Rs. 916.7 millions; as at March 31,

2005 Rs. 72.4 millions on account of overdue Securitised Receivables)# Includes Rs. 1050.8 millions (as at March 31, 2006 Rs. 382.7 millions; as at March 31,

2005 Rs. 186 millions towards overdue Securitised Receivables)

B) UNSECURED-considered good(a) Advances to suppliers, contractors and others (Notes 2 and 3 below) . . . . . . . . . . . . . . . 3,006.8 4,942.0 6,657.6 153.1(b) Dues from subsidiary companies (Note 4 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94.1 66.9 892.5 20.5(c) Loans to associates and others (Note 5 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,096.6 455.1 490.4 11.3(d) Inter-corporate deposits [net of provision of Rs. 81.2 millions (as at March 31, 2006 Rs.

83.7 millions; as at March 31, 2005 Rs. Nil )] (Note 6 below) . . . . . . . . . . . . . . . . . . . . . 815.5 1,403.5 4,028.6 92.7(e) Deposits with government, public bodies and others :

(i) Balances with Customs, Port Trust, Excise, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 651.5 1,143.3 1,237.1 28.5(ii) Others [net of provision of Rs. 1.0 million (as at March 31, 2006 Rs. 1.0 million;

as at March 31, 2005 Rs. Nil )] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 398.0 810.4 1,167.4 26.9(f) Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248.2 484.4 500.9 11.5(g) Advance payments against taxes (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600.6 2,795.2 2,811.3 64.7

10,911.3 12,100.8 17,785.8 409.2

25,492.6 56,333.8 60,259.9 1,386.3

Notes:—

(1) Loans are secured against hypothecation of vehicles.(2) Advances to suppliers, contractors and others include :

Loans and advances due from:Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6 3.4 3.2 0.1Maximum during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9 3.6 3.4 0.1

(3) Advances to suppliers, contractors and others are net of advances considered doubtfulwhich have been provided for . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 313.7 1,024.7 902.9 20.8

(4) Dues from subsidiary companies:(i) HV Axles Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.0 — 27.1 0.6(ii) HV Transmissions Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.0 34.4 103.4 2.4(iii) Telco Construction Equipment Company Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.5 19.9 30.3 0.7(iv) Tata Daewoo Commercial Vehicle Co. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6 5.9 5.1 0.1(v) Tata Motors European Technical Centre Plc, UK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 6.7 6.9 0.2(vi) TML Financial Services Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 703.5 16.2(vii) Tata Marcopolo Motors Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 12.1 0.3(viii) Tata Motors (Thailand) Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 4.1 0.1

(5) Loans to associates, subsidiaries and others :(i) Hispano Carrocera, S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396.6 377.7 405.2 9.3(ii) Tata Finance Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,700.0 — — —(iii) Tata Motors European Technical Centre Plc, UK-(subsidiary) . . . . . . . . . . . . . . . . . . . . — 77.4 85.2 2.0

(6) Inter-corporate deposits with subsidiaries:(i) Sheba properties Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67.5 280.0 195.0 4.5(ii) HV Transmissions Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.0 — 40.0 0.9(iii) Concorde Motors (India) Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0 60.0 250.0 5.8(iv) Tata Technologies Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.0 — — —(v) TAL Manufacturing Solutions Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.0 70.0 50.0 1.2(vi) Telco Construction Equipment Company Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 100.0 — —(vii) TML Financial Services Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 2,000.0 46.0

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SCHEDULES FORMING PART OF THE BALANCE SHEET

SCHEDULE 11

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

CURRENT LIABILITIES(a) Acceptances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,072.8 26,973.8 20,038.0 461.0(b) Sundry creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,839.0 26,649.9 37,097.1 853.4(c) Advance and progress payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,716.1 3,340.7 2,436.8 56.1(d) Liability towards Investors Education and Protection Fund under Section 205C of the

Companies Act, 1956 not duei) Unpaid dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.4 54.8 66.3 1.5ii) Application money pending refund Rs. 1,140/- (as at March 31, 2006 Rs 1,140/-, as at

March 31, 2005 Rs. 1,140/-) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —iii) Unclaimed matured deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3 43.0 36.1 0.8iv) Unclaimed matured debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.4 8.9 1.8 *v) Interest accrued on (iii) and (iv) above . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5 6.3 4.2 0.1

(e) Interest/commitment charges accrued on loans but not due . . . . . . . . . . . . . . . . . . . . . . . . . 195.9 190.8 254.2 5.8

52,889.4 57,268.2 59,934.5 1,378.7

Notes:—Sundry creditors include amounts payable to small scale industrial undertakings . . . . 467.5 600.8 908.8 20.9

SCHEDULE 12

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

PROVISIONS(a) Proposed dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,521.9 4,979.4 5,780.7 133.0(b) Provision for tax on dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 634.2 698.4 982.5 22.6(c) Provision for retirement and other employee benefit schemes [Note B (5)

Schedule 14] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,435.9 1,811.7 2,550.0 58.7(d) Other Provisions [Note B (6) Schedule 14] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,668.6 4,660.9 4,330.0 99.6

11,260.6 12,150.4 13,643.2 313.9

SCHEDULE 13

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S.$Millions)

MISCELLANEOUS EXPENDITURE(to the extent not written off or adjusted)Employee Separation Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181.6 141.2 100.9 2.3

181.6 141.2 100.9 2.3

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SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

SIGNIFICANT ACCOUNTING POLICIES

(a) Sales

The Company recognizes revenues on the sale of products when the products are delivered to the dealer/customer orwhen delivered to the carrier for exports sales, which is when risks and rewards of ownership pass to the dealer/customer.

Sales are inclusive of income from services, excise duty, export incentive and exchange fluctuations on exportreceivables and are net of trade discount.

(b) Depreciation

(i) Depreciation is provided on straight line basis (SLM), at the rates and in the manner prescribed in Schedule XIV tothe Companies Act, 1956 except in the case of:

• Leasehold Land—amortised over the period of the lease

• Technical Know-how—at 16.67% (SLM)

• Laptops—at 23.75% (SLM)

• Cars—at 19% (SLM)

• Assets acquired prior to April 1, 1975—on Written Down Value basis at rates specified in Schedule XIV to theCompanies Act, 1956.

• Capital assets, the ownership of which does not vest in the Company, other than leased assets, are depreciatedover the estimated period of their utility or five years, whichever is less.

• Software in excess of Rs. 25,000 is amortised over a period of sixty months or on the basis of estimated usefullife, whichever is lower.

(ii) Assets given on lease as on March 31, 2000, acquired upon amalgamation of Tata Finance Ltd., are depreciated atrates specified in Schedule XIV to the Companies Act, 1956. The difference between the depreciation charge ascomputed using the Internal Rate of Return (IRR) implicit in the lease, to ensure capital recovery over the primarylease period, and the charge as disclosed for the year, is reflected in the lease equalisation account.

(iii) In respect of assets whose useful life has been revised, the unamortised depreciable amount has been charged overthe revised remaining useful life.

(c) Fixed Assets

(i) Fixed Assets (except for a building acquired on amalgamation with Telco Dadajee Dhackjee Ltd which is atrevalued figure) are stated at cost of acquisition or construction less accumulated depreciation / amortisation. Allcosts relating to the acquisition and installation of Fixed Assets are capitalised and include financing costs relatingto borrowed funds attributable to construction or acquisition of Fixed Assets, upto the date the asset is ready forintended use, adjusted for charges on foreign exchange contracts and exchange rate differences relating to specificborrowings, where applicable, attributable to those fixed assets.

(ii) Product development costs incurred on new vehicle platforms, variants on existing platforms and new vehicleaggregates are recognised as Intangible Assets (included under Fixed Assets) and amortised over a period of thirtysix months or on the basis of actual production to planned production volumes for thirty six months fromcommencement of commercial production.

(iii) Software not exceeding Rs. 25,000 and product development costs relating to minor product enhancements, faceliftsand upgrades are charged off to the profit and loss account as and when incurred.

(d) Leases

Assets acquired under finance leases are recognised at the lower of the fair value of the leased assets at inception and thepresent value of minimum lease payments. Lease payments are apportioned between the finance charge and the outstandingliability. The finance charge is allocated to periods during the lease term at a constant periodic rate of interest on theremaining balance of the liability. Assets given under finance leases, except for those stated in b(ii) above, are recognised asreceivables at an amount equal to the net investment in the lease and the finance income is based on a constant rate of returnon the outstanding net investment.

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SIGNIFICANT ACCOUNTING POLICIES—(Contd.)

(e) Transactions in Foreign Currencies

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Foreigncurrency monetary assets and liabilities are translated at year end exchange rates. Exchange difference arising on settlement oftransactions and translation of monetary items are recognised as income or expense in the year in which they arise, except inrespect of liabilities for the acquisition of fixed assets from a country outside India and liabilities incurred prior to April 1,2004, where such exchange difference is adjusted in the carrying cost of fixed assets.

Premium or discount on forward contracts is amortised over the life of such contract and is recognised as income orexpense, except in respect of liabilities for the acquisition of fixed assets incurred prior to April 1, 2004, where suchamortisation is adjusted in the carrying cost of the fixed assets. Foreign currency options are stated at fair value as at year end.

(f) Product Warranty Expenses

The estimated liability for product warranties is recorded when products are sold. These estimates are established usinghistorical information on the nature, frequency and average cost of warranty claims and management estimates regardingpossible future incidence based on corrective actions on product failures.

(g) Income on Vehicle Loan / Hire-Purchase Income / Finance Income from Lease

Interest income from hire purchase and loan contracts and finance income in respect of vehicles and income from plantgiven on lease, are accounted for by using the Internal Rate of Return method. Consequently, a constant rate of return on thenet outstanding amount is accrued over the period of contract. The Company provides an allowance for hire purchase and loanreceivables that are in arrears for more than 11 months, to the extent of an amount equivalent to the outstanding principal andamounts due but unpaid. In respect of loan contracts that are in arrears for more than 6 months but not more than 11 months,allowance is provided to the extent of 10% of the outstanding and amount due but unpaid.

(h) Inventories

Inventories of raw materials and components, work-in-progress and stock-in-trade are valued at the lower of cost and netrealisable value. Cost is ascertained on a moving weighted average / monthly moving weighted average basis. The cost ofwork-in-progress and finished goods is determined on full absorption cost basis.

(j) Employee Benefits

i) Gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees.The plan provides for a lump sum payment to vested employees at retirement, death while in employment or ontermination of employment of an amount equivalent to 15 to 30 days salary payable for each completed year ofservice. Vesting occurs upon completion of five years of service. The Company makes annual contributions togratuity fund established as trust. The Company accounts for the liability for gratuity benefits payable in futurebased on an independent actuarial valuation.

ii) Superannuation

The Company has two superannuation plans, a defined benefit plan and a defined contribution plan. An eligibleemployee on April 1, 1996 could elect to be a member of either plan.

Employees who are members of the defined benefit superannuation plan are entitled to benefits depending on theyears of service and salary drawn. The monthly pension benefits after retirement range from 0.75% to 2% of theannual basic salary for each year of service. The Company accounts for the liability for superannuation benefitspayable in future under the plan based on an independent actuarial valuation.

With effect from April 1, 2003, this plan was amended and benefits earned by covered employees have beenprotected as at March 31, 2003. Employees covered by this plan are prospectively entitled to benefits computed on abasis that ensures that the annual cost of providing the pension benefits would not exceed 15% of salary.

The Company maintains a separate irrevocable trust for employees covered and entitled to benefits. The Companycontributes up to 15% of the eligible employees’ salary to the trust every year. The Company recognizes suchcontributions as an expense when incurred. The Company has no further obligation beyond this contribution.

iii) Bhavishya Kalyan Yojana (BKY)

Bhavishya Kalyan Yojana is an unfunded defined benefit plan. The benefits of the plan accrue to an eligibleemployee at the time of death or permanent disablement, while in service, either as a result of an injury or as certifiedby the Company’s Medical Board. The monthly payment to dependents of the deceased/disabled employee under the

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SIGNIFICANT ACCOUNTING POLICIES—(Contd.)

plan equals 50% of the salary drawn at the time of death or accident or a specified amount, whichever is higher. TheCompany accounts for the liability for BKY benefits payable in future based on an independent actuarial valuation.

iv) Post-retirement Medicare SchemeUnder this scheme, employees get medical benefits subject to certain limits of amount, periods after retirement andtypes of benefits, depending on their grade and location at the time of retirement. Employees separated from theCompany as part of Early Separation Scheme, on medical grounds or due to permanent disablement are also coveredunder the scheme. The liability for post-retirement medical scheme is based on an independent actuarial valuation.

v) Provident fundThe eligible employees of the Company are entitled to receive benefits under the provident fund, a defined contributionplan, in which both employees and the Company make monthly contributions at a specified percentage of the coveredemployees’ salary (currently 12% of employees’ salary). The contributions as specified under the law are paid to theprovident fund and pension fund set up as irrevocable trust by the Company or to respective Regional Provident FundCommissioner and the Central Provident Fund under the State Pension scheme. The Company is generally liable forannual contributions and any shortfall in the fund assets based on the government specified minimum rates of return orpension and recognises such contributions and shortfall, if any, as an expense in the year incurred.

vi) Compensated absencesThe Company provides for the encashment of leave or leave with pay subject to certain rules. The employees areentitled to accumulate leave subject to certain limits, for future encashment. The liability is provided based on thenumber of days of unutilised leave at each balance sheet date on the basis of an independent actuarial valuation.

(k) Investments

Long term investments are stated at cost less other than temporary diminution in value, if any. Current investmentscomprising investments in mutual funds are stated at lower of cost and fair value, determined on a portfolio basis.

(l) Taxes on Income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with theprovisions of the Income—Tax Act, 1961. Current tax includes Fringe benefit tax.

Deferred tax is recognised, on timing differences, being the difference between taxable income and accounting incomethat originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised if there is virtualcertainty that there will be sufficient future taxable income available to realise such losses.

(m) Redemption premium / discount on Foreign Currency Convertible Notes (FCCN)

Premium payable on redemption of FCCN as per the terms of issue is provided fully in the year of issue by adjustingagainst the Securities Premium Account (SPA). Any changes to this premium payable on account of conversion or exchangefluctuation is also adjusted in the SPA. Discount on redemption of FCCN, if any, will be recognised on redemption.

(n) Business Segments

The Company is engaged mainly in the business of automobile products consisting of all types of commercial andpassenger vehicles including financing of the vehicles sold by the Company. These, in the context of Accounting Standard 17on Segment Reporting, issued by the Institute of Chartered Accountants of India, are considered to constitute one singleprimary segment.

(o) Miscellaneous Expenditure (to the extent not written off or adjusted)

Cost under individual Employee Separation Schemes are amortised over periods between 24 and 84 months dependingupon the estimated future benefit.

CHANGES IN ACCOUNTING POLICIES

1. During 2004-05, premium payable on redemption of FCCN has been fully provided considering Accounting Standard -AS 29 “Provisions, Contingent Liabilities and Contingent Assets” issued by the Institute of Chartered Accountants ofIndia becoming applicable in the financial year 2004-05, and debited to Securities Premium Account (SPA) as againstthe past practice of providing premium on a pro-rata basis and debiting to SPA. As a result, the debit to SPA is higher byRs. 2,530.9 millions.

2. Consequent to revision of Accounting Standard - AS 15 “Employee Benefits”, the Company has adopted the revisedaccounting standard effective April 1, 2006 . Pursuant to the adoption, an amount of Rs. 141.9 millions (net of tax Rs. 72.1millions) have been adjusted to General Reserve during 2006-07 for difference as per revised AS 15 [Refer Note B (5),Schedule 14].

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SCHEDULE FORMING PART OF THE BALANCE SHEET ANDPROFIT AND LOSS ACCOUNT

SCHEDULE 14

(A) Notes to Balance Sheet

1. I. The Issued and subscribed capital includes :-

(a) Ordinary Shares allotted as fully paid up shares for consideration other than cash:

• 753,470 Ordinary Shares allotted to Daimler—Benz AG in consideration of materials supplied to the Company in thefinancial year 1956-57,

• 300,000 Ordinary Shares allotted to the Shareholders of Investa Machine Tools and Engineering Company Limited in termsof the Scheme of Amalgamation sanctioned by the Bombay High Court in the financial year 1966-67,

• 759,510 Ordinary Shares allotted to the Shareholders of the Central Bank of India in terms of the Scheme of Amalgamationin the financial year 1970-71,

• 183,823 Ordinary Shares issued to the Shareholders of the erstwhile Noduron Founders Maharashtra Limited in terms of themerger in the financial year 1992-93,

• 152,429,751 (as at March 31, 2006 152,429,751; as at March 31, 2005 152,429,751) Ordinary Shares issued to FinancialInstitutions and holders of convertible debentures / bonds on conversion of term loans / debentures / bonds,

• 14,504,949 Ordinary Shares issued to the Shareholders of the erstwhile Tata Finance Limited in terms of the merger in thefinancial year 2005-06 [Note C(ii)].

(b) 111,292,760 (as at March 31, 2006 111,292,760; as at March 31, 2005 111,292,760) Ordinary Shares issued as fully paid upBonus Shares by utilising Securities Premium Account, Capital Reserve, Capital Redemption Reserve, Amalgamation Reserve,contribution for Capital Expenditure Account and General Reserve.

(c) 25,502,255 (as at March 31, 2006 25,502,255; as at March 31, 2005 25,502,255) Ordinary Shares allotted against the exercise ofequivalent number of warrants pertaining to the rights issue of 2001 at Rs.120/- per share.

(d) 1,620,003 (for 2005-06 : 312,955; for 2004-05 : 2,490,199) Ordinary Shares allotted during 2006-07, consequent to conversion of8,800 (for 2005-06 : 1,700; for 2004-05 : 13,527) 1% Foreign Currency Convertible Notes (‘FCCN’) due 2008 aggregating US$8.8 million [Rs.412.7 millions] (for 2005-06 : US$ 1.7 million [Rs.75.9 millions]; for 2004-05 : US$ 13.53 millions [Rs. 591.5millions] ) and 919,297 (for 2005-06 : 6,264,476; for 2004-05 : Nil ) Ordinary Shares were allotted during the year, consequent toconversion of 12,015 (for 2005-06 : 81,875; for 2004-05 : Nil) 0% Foreign Currency Convertible Notes (‘FCCN’) due 2009aggregating US$ 12.01 millions [Rs.551.0 millions] (for 2005-06 : US$ 81.87 millions [Rs.3,638.1 millions]; (for 2004-05 : US$Nil [Rs. Nil]), resulting in an aggregate conversion of 18,398,095 (as at March 31, 2006 : 16,778,092; as at March 31, 2005 :16,465,097) Ordinary Shares against 99,940 (as at March 31, 2006 : 91,140; as at March 31, 2005 : 89,440) 1% FCCN due 2008and 7,183,773 (as at March 31, 2006 : 6,264,476; as at March 31, 2005 : Nil) Ordinary Shares against 93,890 (as at March 31,2006 : 81,875; as at March 31, 2005 : Nil) 0% FCCN due 2009.

(e) 454 Ordinary Shares allotted during the year on settlement of legal cases against the rights entitlement which were held inabeyance.

(f) Subsequent to the year ended March 31, 2007, 100 Zero coupon FCCN (due 2009) aggregating U.S.$ 0.10 Million (Rs. 4.1millions), have been converted into 7,651 Ordinary Shares.

II. The entitlements to 49,989 Ordinary Shares are subject matter of various suits filed in the courts / forums by third parties for whichfinal order is awaited and hence kept in abeyance.

2. Secured Loans:

(i) Nature of Security (on loans including interest accrued thereon):

(a) 14.75% Non-Convertible Debentures (2008), 13.50% Non-Convertible Debentures (2005), and Floating Rate Non-ConvertibleDebentures (2007) are secured by a pari passu charge by way of equitable mortgage of immovable properties and fixed assetsin or attached thereto, both present and future, and a first charge on all other assets save and except stocks and book debts,present and future, the Export Showroom at Shivsagar Estate, Worli, Mumbai; Lloyds Showroom and basement at Prabhadevi,Mumbai; plot of land with structures at Mahim, Mumbai; the Company’s residential flats at Mumbai, Pune and Jamshedpurand the Company’s freehold land admeasuring 4245 sq. mtrs. approximately, situated at village Mouje—Naupada in ThaneDistrict.

(b) Loan from Technology Development Board has a specific charge on the Company’s movable plant and machinery, machineryspares, tools and accessories and other movables, both present and future, save and except book debts and stocks pertaining tothe Indica Car Plant at Chikali.

(c) Loans from Housing Development Finance Corporation Limited were secured against pledge of the Company’s investment inthe Ordinary Shares of The Tata Iron and Steel Co. Ltd.

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SCHEDULE FORMING PART OF THE BALANCE SHEET ANDPROFIT AND LOSS ACCOUNT

SCHEDULE 14 (Contd.)

(A) Notes to Balance Sheet (contd.)

(d) Loan from International Finance Corporation was secured by a pari passu charge on all the immovable and movable propertiesexcluding the Export Showroom at Shivsagar Estate, Worli, Mumbai; the Lloyds Showroom and basement at Prabhadevi, Mumbai;the plot of land with structures thereon at Mahim, Mumbai; the Company’s residential flats at Mumbai, Pune and Jamshedpur andthe Company’s freehold land admeasuring 4245 sq. mtrs. approximately, situated at village Mouje—Naupada in Thane District.

(e) Sales Tax Deferment Loan is secured by a residual charge on the immovable and movable properties at Lucknow.

(f) The Buyers line of credit from Banks is repayable at the end of three years from the drawdown dates. All the repayments are due in2009-10.

(g) Loans, Cash Credit Accounts and Buyers line of credit from Banks are secured by hypothecation of existing and future stocks ofraw materials, stock in trade, stores, work in progress and book debts, except Hire Purchase book debts and outstanding amounts onvehicle loan contracts.

(h) Loans and Overdraft Accounts from Banks are secured under Hire Purchase Agreements and by Promissory Notes in respect offuture instalments receivable from hirers [Schedule 8 (c)] and outstanding amounts on vehicle loan contracts and hypothecation ofvehicles.

(ii) Terms of Redemption :

Non Convertible Debentures (NCD’s) Redeemable on

14.75% Non-Convertible Debentures (2008) October 11, 2008 (At par)

Floating Rate Non-Convertible Debentures (2007) October 1, 2007 (At par)

13.50% Non-Convertible Debentures (2005) July 23, 2005 (At par)

3. (a) Major components of deferred tax arising on account of timing differences are:

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

Liabilities:Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,929.2) (6,180.4) (6,495.8) (149.4)Product Development Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (732.0) (1,479.4) (3,059.8) (70.4)Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18.5) (73.1) (78.7) (1.8)

(6,679.7) (7,732.9) (9,634.3) (221.6)

Assets:Employee benefits / Expenses allowable on payment basis . . . . . . . . . . . . . . . . . . . . 418.1 500.5 672.6 15.5Employees Separation Schemes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183.3 145.4 108.8 2.5Provision for Doubtful Debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371.8 783.2 958.0 22.0Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.7 78.4 26.6 0.6

1,026.9 1,507.5 1,766.0 40.6

Net Deferred Tax Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,652.8) (6,225.4) (7,868.3) (181.0)

(b) Deferred Tax charge for the year

Opening Deferred Tax Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,141.5 5,652.8 6,225.4 143.2Add:Net deferred tax balances taken over upon merger of Tata Finance Ltd and

Telco Dadajee Dhackjee Ltd (net of amount transferred to GeneralReserve) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (848.9) — —

Add:Net deferred tax asset created on difference in opening liability as per revisedAS 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (129.3) (3.0)

5,141.5 4,803.9 6,096.1 140.2Less: Closing Deferred Tax Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,652.8 6,225.4 7,868.3 181.0

Deferred Tax charge for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511.3 1,421.5 1,772.2 40.8

F-27

Page 159: Tata Motors

SCHEDULE FORMING PART OF THE BALANCE SHEET ANDPROFIT AND LOSS ACCOUNT

SCHEDULE 14 (Contd.)

(A) Notes to Balance Sheet (contd.)

(c) Tax expense:

a) Current Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,638.2 3,633.5 4,760.0 109.5b) Fringe Benefit Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 190.0 65.0 1.5c) Deferred Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 511.3 1,421.5 1,772.2 40.8

4,149.5 5,245.0 6,597.2 151.8

4. Future instalments receivable from Hirer / vehicle loans [Schedule 8 (c) and Schedule 10 (A)] includes Rs. 5,983.7 millions (as atMarch 31, 2006 Rs. 2,939.6 millions, as at March 31, 2005 Rs. 573.1 millions) in respect of instalments that have become due but havenot been recovered. Out of these Rs. 1,596.5 millions (as at March 31, 2006 Rs. 962.7 millions, as at March 31, 2005 Rs.111.8 millions )are due for over six months. There is an aggregate provision of Rs. 1,500.3 millions (as at March 31, 2006 Rs. 870.9 millions, as atMarch 31, 2005 Rs. 60.6 millions) made in respect of overdue instalments.

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)5.

5. I Disclosure in respect of finance leases:Assets given on Lease:(a) (i) Total gross investment in the leases [Schedule 8(c)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,221.6 874.9 623.3 14.4

Total gross investment in the leases for a periodNot later than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,076.4 453.9 376.2 8.7Later than one year and not later than five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,145.2 421.0 247.1 5.7

(ii) Present value of the minimum lease payments receivable . . . . . . . . . . . . . . . . . . . . . . . 2,884.2 844.5 576.6 13.2Present value of the minimum lease payments receivable for a period

Not later than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,834.5 432.5 349.6 8.0Later than one year and not later than five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,049.7 412.0 227.0 5.2

(b) Unearned finance income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337.4 30.4 46.7 1.1(c) The accumulated provision for the uncollectible minimum lease payments

receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.5 218.0 112.4 2.6(d) A general description of significant leasing arrangements:- Finance lease and Hire

purchase agreements: The Company has given own manufactured vehicles andmachines and equipment on Hire Purchase / Lease. The contingent lease rentals isbased on bank interest rate and depreciation in respect of the assets given on lease.

II Disclosure in respect of operating leases:Assets taken on lease:(a) Total of minimum lease payments

The total of minimum lease payments for a period:Not later than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76.1 6.1 32.0 0.7Later than one year and not later than five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.7 0.6 90.9 2.1

(b) Lease payments recognised in the statement of profit and loss for the year . . . . . . . . . . . 102.2 81.6 29.4 0.7(c) A general description of the significant leasing arrangements:-

The Company has entered into operating lease arrangements for computers and dataprocessing equipments from a vendor

F-28

Page 160: Tata Motors

SCHEDULE FORMING PART OF THE BALANCE SHEET ANDPROFIT AND LOSS ACCOUNT

SCHEDULE 14 (Contd.)

(A) Notes to Balance Sheet (contd.)

6. i) Related party disclosures

a) Related Party and their relationship

1. Subsidiaries

Tata Technologies Ltd Tata Technologies Investments Pte.Ltd, Singapore

TAL Manufacturing Solutions Ltd (from December 7, 2005)

H V Axles Ltd Tata Technologies Sdn Bhd, Malaysia (from December 7,2005)

H V Transmissions Ltd INCAT International Plc. �Sheba Properties Ltd INCAT Limited

Concorde Motors (India) Ltd INCAT SAS

Telco Construction Equipment Co. Ltd INCAT GmbH

Tata Daewoo Commercial Vehicle Co. Ltd INCAT Holdings B.V.

Tata Motors Insurance Services Ltd Lemmerpoort B.V

(formerly known as Concorde Motors Ltd.) (formerly known as INCAT Engineering Solutions B.V.)

Tata Motors European Technical Centre Plc INCAT K.K fromOctober 3,2005(from September 1, 2005) Tata Technologies iKS Inc

TML Financial Services Ltd (Formerly known as iKnowledge Solutions Inc.)

(from June 1, 2006) CADPO Asia Pte. Ltd

Tata Marcopolo Motors Ltd INCAT Systems Inc

(from September 20, 2006) Integrated Systems Technologies de Mexico, S.A. de C.V.

Tata Motors (Thailand) Ltd INCAT Solutions of Canada Inc

(from February 28, 2007) INCAT Holdings Inc. � Merged withINCAT Systems Inc.w.e.f April 1, 2006INCAT (Thailand) Ltd INCAT Financial Services Inc.

(formerly known as Tata Technologies Ltd,Thailand)

Tata Technologies Ltd. U.S.A

(from October 10, 2005) Cedis Mechanical Engineering GmbH (from January 1,2006)

Tata Technologies Pte Ltd, Singapore(from December 7, 2005)

2. Associates :

Tata AutoComp Systems Ltd Hispano Carrocera, S. A (from March 16, 2005)

Tata Cummins Ltd TSR Darashaw Ltd

Tata Precision Industries Pte. Ltd Tata Securities Private Ltd

Tata Engineering Services Pte. Ltd (Due to Nita Company Ltd

Common Key Management Personnnel) Niskalp Investments and Trading Co. Ltd

Tata Sons Ltd (Investing Party) (upto January 20, 2006)

3. Key Management Personnnel

Mr. Ravi Kant

Mr. Praveen P Kadle

Dr. V Sumantran (upto August 24, 2005)

F-29

Page 161: Tata Motors

SCHEDULE FORMING PART OF THE BALANCE SHEET ANDPROFIT AND LOSS ACCOUNT

SCHEDULE 14 (Contd.)

(A) Notes to Balance Sheet (contd.)

b) Transactions with the related parties

Subsidiaries Associates

KeyManagement

Personnel

Total(in Rs.

Millions)(in U.S. $Millions)

Purchase of goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 601.6 17,608.8 — 18,210.4 418.92005-06 914.2 12,550.3 — 13,464.52004-05 68.2 9,477.8 — 9,546.0

Sale of goods (inclusive of sales tax) . . . . . . . . . . . . . . . . . 2006-07 6,044.2 1,145.8 — 7,190.0 165.42005-06 4,339.2 967.0 — 5,306.22004-05 3,297.4 1,662.6 — 4,960.0

Purchase of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 685.5 — — 685.5 15.82005-06 503.4 180.0 — 683.42004-05 420.8 96.1 — 516.9

Sale of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 577.0 — — 577.0 13.32005-06 0.4 — — 0.42004-05 1.0 — — 1.0

Services received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 9,432.6 429.1 45.7 9,907.4 227.92005-06 6,454.6 529.6 37.5 7,021.72004-05 5,957.2 348.0 39.3 6,344.5

Services rendered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 415.7 30.0 — 445.7 10.32005-06 367.8 42.4 — 410.22004-05 331.3 35.5 — 366.8

Finance given (including loans and equity) . . . . . . . . . . . . 2006-07 9,817.9 — — 9,817.9 225.92005-06 8,920.6 — — 8,920.62004-05 3,009.9 956.6 — 3,966.5

Finance taken (including loans and equity) . . . . . . . . . . . . 2006-07 1,459.8 — — 1,459.8 33.62005-06 674.5 — — 674.52004-05 445.7 — — 445.7

Interest / Dividend paid / (received) (net) . . . . . . . . . . . . . 2006-07 (927.5) 676.0 — (251.5) (5.8)2005-06 (546.6) 756.6 — 210.02004-05 (244.3) 32.8 — (211.5)

Amount receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 1,050.4 87.6 — 1,138.0 26.22005-06 133.7 101.5 — 235.22004-05 403.3 156.4 — 559.7

Bills discounted (in respect of amount receivable) . . . . . . 2006-07 — — — — —2005-06 — 11.9 — 11.92004-05 — 101.8 — 101.8

Amount payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 1,308.1 1,145.7 — 2,453.8 56.42005-06 545.8 612.6 — 1,158.42004-05 208.9 506.6 — 715.5

Amount receivable (in respect of loans) . . . . . . . . . . . . . . 2006-07 2,621.4 412.9 2.8 3,037.1 69.92005-06 587.9 394.7 3.0 985.62004-05 277.5 396.6 3.2 677.3

Amount payable (in respect of loans) . . . . . . . . . . . . . . . . 2006-07 195.8 — — 195.8 4.52005-06 — — — —2004-05 — — — —

F-30

Page 162: Tata Motors

SCHEDULE FORMING PART OF THE BALANCE SHEET ANDPROFIT AND LOSS ACCOUNT

SCHEDULE 14 (Contd.)

(A) Notes to Balance Sheet (contd.)

c) Disclosure in respect of material transactions with related parties

Year Ended March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

i) Purchase of goods Tata Cummins Ltd . . . . . . . . . . . . . . . . . . . . 9,471.6 10,537.0 14,935.6 343.6Tata AutoComp Systems Ltd . . . . . . . . . . . . — 2,002.8 2,659.0 61.2

ii) Sale of goods Concorde Motors (India) Ltd . . . . . . . . . . . . 3,106.5 4,039.4 5,663.6 130.3Tata Cummins Ltd . . . . . . . . . . . . . . . . . . . . 998.8 925.8 1,044.4 24.0

iii) Purchase of fixed assets TAL Manufacturing Solutions Ltd . . . . . . . 398.6 501.2 685.5 15.8Hispano Carrocera, S. A . . . . . . . . . . . . . . . 96.1 180.0 — —

iv) Sale of fixed assets H V Axles Ltd . . . . . . . . . . . . . . . . . . . . . . . — 0.2 398.0 9.2H V Transmissions Ltd . . . . . . . . . . . . . . . . 0.9 — 179.0 4.1Telco Construction Equipment Co. Ltd . . . . 0.1 0.1 — —

v) Receiving of services H V Axles Ltd . . . . . . . . . . . . . . . . . . . . . . . 3,026.1 3,100.5 4,413.0 101.5H V Transmissions Ltd . . . . . . . . . . . . . . . . 1,746.9 1,788.2 2,468.4 56.8Tata Technologies Ltd . . . . . . . . . . . . . . . . . 1,044.4 1,233.4 1,280.1 29.4

vi) Rendering of services H V Axles Ltd . . . . . . . . . . . . . . . . . . . . . . . 120.1 117.2 119.3 2.7H V Transmissions Ltd . . . . . . . . . . . . . . . . 124.5 123.1 124.0 2.9Telco Construction Equipment Co. Ltd . . . . 69.8 81.2 86.7 2.0

vii) Finance given (including loans and equity)Investment in Equity TAL Manufacturing Solutions Ltd . . . . . . . 750.0 — — —Investment in Equity Sheba Properties Ltd . . . . . . . . . . . . . . . . . . 393.8 — — —Investment in Equity Tata Technologies Ltd . . . . . . . . . . . . . . . . . — 2,020.0 — —Investment in Equity TML Financial Services Ltd . . . . . . . . . . . . — — 5,500.0 126.5Inter Corporate Deposit TML Financial Services Ltd . . . . . . . . . . . . — — 2,000.0 46.0Inter Corporate Deposit Sheba Properties Ltd . . . . . . . . . . . . . . . . . . 582.9 928.8 1,416.6 32.6Inter Corporate Deposit Concorde Motors (India) Ltd . . . . . . . . . . . . 465.0 — — —Inter Corporate Deposit TAL Manufacturing Solutions Ltd . . . . . . . 120.0 — — —Loan Hispano Carrocera, S. A (from

March 16, 2005) . . . . . . . . . . . . . . . . . . . . 396.6 — — —Loan INCAT Systems Inc . . . . . . . . . . . . . . . . . . . — 4,114.2 — —

viii) Finance taken (including loans and equity)Inter Corporate Deposit Tata Technologies Ltd . . . . . . . . . . . . . . . . . — 325.0 1,327.5 30.5Inter Corporate Deposit Sheba Properties Ltd . . . . . . . . . . . . . . . . . . 263.5 105.0 — —Inter Corporate Deposit Concorde Motors (India) Ltd . . . . . . . . . . . . 115.1 230.0 — —Inter Corporate Deposit Telco Dadajee Dhackjee Ltd . . . . . . . . . . . . 67.1 — — —

ix) Interest / Dividend paid / (received)Dividend paid Tata Sons Ltd . . . . . . . . . . . . . . . . . . . . . . . . 316.3 991.4 1,096.1 25.2Dividend received Tata Cummins Ltd . . . . . . . . . . . . . . . . . . . . (180.0) (72.0) (288.0) (6.6)Dividend received Tata Sons Ltd . . . . . . . . . . . . . . . . . . . . . . . . (74.3) (91.6) (86.4) (2.0)Dividend received H V Axles Ltd . . . . . . . . . . . . . . . . . . . . . . . (67.5) (135.0) (315.0) (7.2)Dividend received H V Transmissions Ltd . . . . . . . . . . . . . . . . (60.0) (120.0) (280.0) (6.4)Dividend received Telco Construction Equipment Co. Ltd . . . . (39.9) (119.6) (184.7) (4.2)Dividend received Tata Technologies Ltd . . . . . . . . . . . . . . . . . (30.3) (30.3) (40.1) (0.9)Dividend received Concorde Motors (India) Ltd . . . . . . . . . . . . — — (49.6) (1.1)Interest received Tata Technologies Ltd . . . . . . . . . . . . . . . . . (11.7) — — —Interest received Telco Construction Equipment Co. Ltd . . . . (4.6) — — —Interest received H V Transmissions Ltd . . . . . . . . . . . . . . . . (8.0) — — —Interest received Tata Sons Ltd . . . . . . . . . . . . . . . . . . . . . . . . (0.7) — — —Interest received INCAT Systems Inc . . . . . . . . . . . . . . . . . . . — (97.0) — —Interest received Niskalp Investments and Trading Co.

Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (42.9) — —Interest received Sheba Properties Ltd . . . . . . . . . . . . . . . . . . — — (33.0) (0.8)

F-31

Page 163: Tata Motors

SCHEDULE FORMING PART OF THE BALANCE SHEET ANDPROFIT AND LOSS ACCOUNT

SCHEDULE 14 (Contd.)

(A) Notes to Balance Sheet (contd.)

ii) Disclosures required by clause 32 of the Listing Agreement.

Amount of loans / advances in the nature of loans outstanding from Subsidiaries and Associates

Name of the Company

OutstandingAs at

March 31,

OutstandingAs at

March 31,

MaximumAmount

Outstandingduring theyear endedMarch 31,

Investmentin shares

of theCompany

Directinvestmentin shares ofsubsidiaries

of theCompany

(in Rs.Millions)

(in U.S. $Millions)

(in Rs.Millions)

No. ofShares

No. ofShares

a) SubsidiariesH V Transmissions Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 40.0 0.9 140.0 — —

2006 — 90.0 — —2005 20.0 200.0 — —

Sheba Properties Ltd. [Note (i) below] . . . . . . . . . . . . . . . . . 2007 195.0 4.5 931.2 — 250,0002006 280.0 482.3 — 250,0002005 67.5 246.5 — 250,000

Tata Technologies Ltd. [Note (ii) below] . . . . . . . . . . . . . . . 2007 — — — — 85,110,0002006 — 350.0 — 85,318,4002005 40.0 250.0 — 150,000

INCAT System Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 — — — — —2006 — 4,152.4 — 2,0002005 — — — —

TAL Manufacturing Solutions Ltd. . . . . . . . . . . . . . . . . . . . 2007 50.0 1.2 70.0 — —2006 70.0 100.0 — —2005 50.0 827.3 — —

Telco Construction Equipment Co. Ltd. . . . . . . . . . . . . . . . . 2007 — — 100.0 — —2006 100.0 500.0 — —2005 — 300.0 — —

Concorde Motors (India) Ltd. . . . . . . . . . . . . . . . . . . . . . . . . 2007 250.0 5.8 250.0 — —2006 60.0 100.0 — —2005 100.0 100.0 — —

H V Axles Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 — — 160.0 — —2006 — 30.0 — —2005 — — — —

Tata Motors European Technical Centre Plc., UK . . . . . . . . 2007 85.2 2.0 85.2 — —2006 77.4 77.4 — —2005 — — — —

TML Financial Services Limited . . . . . . . . . . . . . . . . . . . . . 2007 2,000.0 46.0 2,000.0 — —(From June 1, 2006) 2006 — — — —

2005 — — — —b) Associates

Tata International Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 — — — — —(upto February 28, 2005) 2006 — — — —

2005 — 100.0 683,461 —

Hispano Carrocera, S. A. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 405.2 9.3 405.2 — —(from March 16, 2005) 2006 377.7 396.6 — —

2005 396.6 396.6 — —

Niskalp Investments and Trading Co. Ltd . . . . . . . . . . . . . . 2007 — — — — —(Net of provision of Rs. 59.7 millions) 2006 893.5 964.8 — —(upto January 20, 2006) 2005 — — — —

Note :(i) Shares in Telco Construction Equipment Co. Ltd. 250,000 Shares (As at March 31, 2006 250,000 Shares, as at March 31, 2005 250,000

Shares)(ii) 150,000 shares (As at March 31, 2006: 150,000 shares; as at March 31, 2005: 150,000 shares) in INCAT System Inc., Nil shares (As at

March 31, 2006: 208,400 shares; as at March 31, 2005: Nil shares) in Tata Technologies (Thailand Ltd.) and 84,960,000 shares (As atMarch 31, 2006: 84,960,000 shares; as at March 31, 2005: Nil shares) in Tata Technologies Pte. Ltd. Singapore.

7(a) There are no Small Scale Industrial undertakings to whom amount is outstanding for more than 30 days as at March 31, 2007.(b) There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding as at March 31, 2007. The above

information and that given in “Current Liabilities” (Schedule-11) regarding Micro, Small and Medium Enterprises has been determinedto the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by theauditors.

F-32

Page 164: Tata Motors

SCHEDULE FORMING PART OF THE BALANCE SHEET ANDPROFIT AND LOSS ACCOUNT

SCHEDULE 14 (Contd.)

(A) Notes to Balance Sheet (contd.)

8. Claims against the Company not acknowledged as debts—

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

(i) Sales Tax—Gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,593.4 1,404.9 2,364.8 54.4—Net of Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,644.4 932.0 1,561.0 35.9

(ii) Excise Duty—Gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 981.6 239.5 309.7 7.1—Net of Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 622.4 158.9 204.4 4.7

(iii) Others —Gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 725.1 717.6 1,023.8 23.6—Net of Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 459.8 476.0 675.8 15.5

(iv) Income tax (exclusive of the effect of similar matters in respect of assessments remainingto be completed) in respect of matters:(a) Decided in Company’s favour by Appellate authorities and for which Department is in

further appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 650.7 593.3 547.9 12.6(b) Pending before Appellate authorities in respect of which the Company is in appeal and

expects to succeed, based on decision in earlier assessment years . . . . . . . . . . . . . . . . . 315.4 411.2 2,868.8 66.0(c) Pending in appeal / other matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157.7 1,767.5 2,822.4 64.9

(v) The counter claim made by a party upon termination of distributorship arrangement by theCompany - GBP NIL (As at March 31, 2006 and 2005 GBP 4.432 Millions) . . . . . . . . . . . 364.7 343.1 — —

9. The claims / liabilities in respect of excise duty, sales tax and other matters where theissue were decided in favour of the Company for which the Department is in furtherappeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,435.0 180.8 270.8 6.2

10. Estimated amount of contracts remaining to be executed on capital account and notprovided for . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,326.3 10,952.5 32,624.8 750.5

11. Other money for which the Company is contingently liable—(i) In respect of bills discounted and export sales on deferred credit . . . . . . . . . . . . . . . . . . . . 2,316.9 4,867.6 4,057.8 93.3(ii) The Company has given guarantees for liability in respect of receivables assigned by

way of securitization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 1,314.7 6,327.0 145.5(iii) Cash Margins / Collateral [Schedule 9 (d)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 755.9 2,741.4 2,819.1 64.9(iv) In respect of retained interest on securitisation transactions . . . . . . . . . . . . . . . . . . . . . . . 687.0 482.5 769.1 17.7(v) In respect of subordinate receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 458.3 694.5 16.0(vi) Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.3 64.1 50.0 1.2

12. Uncalled liability on partly paid shares of Tata Motors (Thailand) Ltd. . . . . . . . . . . . . . . . — — 352.1 8.1

F-33

Page 165: Tata Motors

SCHEDULE FORMING PART OF THE BALANCE SHEET ANDPROFIT AND LOSS ACCOUNT

SCHEDULE 14 (Contd.)

(B) Notes to Profit and Loss Account:

(1) Purchase of products for sale etc. include:Year Ended March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

(i) (a) Spare parts and accessories for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,082.4 4,615.5 5,589.1 128.6(b) Bodies and trailers for mounting on chassis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,609.9 5,297.2 8,600.6 197.8(c) Passenger cars 1,328 nos. (2005-06 : 209 nos.; 2004-05 : Nil) . . . . . . . . . . . . . . . . — 74.7 402.3 9.3

6,692.3 9,987.4 14,592.0 335.7

(ii) Sales and Opening and Closing Stocks of vehicles and cars include chassis mounted with bodies / trailers and passenger cars. [Also referSchedule 14 (E) and 15]

(2) The total expenditure incurred on Research and development :(a) Expenditure charged to profit and loss account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,284.5 1,322.1 1,601.3 36.8(b) Expenditure capitalised during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,648.9 3,439.1 6,367.3 146.5

3,933.4 4,761.2 7,968.6 183.3

Year Ended March 31,

2005 2006 2007 2007

( in Rupees) (in U.S. $)(3) (a) Auditors’ Remuneration (excluding Service Tax) :

(i) Audit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,600,000* 20,000,000 22,500,000 517,598.3(ii) Audit Fees for financial statements as per US GAAP . . . . . . . . . . . . . . . . . . 21,000,000^ 5,000,000 14,500,000# 333,563.4(iii) In other Capacities :

Company Law Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,000* 35,000* 35,000 805.2Tax Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,500,000* 2,500,000* 3,200,000 73,614.0Corporate Governance certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250,000* 250,000 250,000 5,751.1Taxation Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,180,300 135,000* — —

(iv) Other Services (Refer Note 1 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,574,000 2,243,065 1,126,446 25,913.2(v) Reimbursement of travelling and out-of-pocket expenses . . . . . . . . . . . . . . . 311,840* 561,267* 316,152* 7,272.9

(b) Cost Auditors’ Remuneration (excluding Service Tax):(i) Audit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800,000 800,000 800,000 18,403.5(ii) Reimbursement of travelling and out-of-pocket expenses . . . . . . . . . . . . . . . 32,254 28,100 29,500 678.6

Notes :1 Excludes Rs. Nil (2005-06 Rs. 3,000,000; 2004-05 Rs. 3,000,000*) towards FCCN issue related audit expenses debited to Securities

premium account* Includes remuneration for professional services rendered by firms of auditors in which some of the partners of the statutory auditors firm

are partners.^ Including amount paid for preceeeding year Rs. 16,000,000# Including amount paid for preceeding year Rs. 4,000,000

(4) Interest:Year Ended March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

(a) On Debentures and fixed loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 632.5 727.6 1,124.7 25.9(b) Discounting charges (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,410.7 1,649.9 1,756.4 40.4(c) Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164.5 587.4 1,017.5 23.4

2,207.7 2,964.9 3,898.6 89.7Less: (i) Transferred to Capital account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.6 30.0 213.5 4.9

(ii) Interest received on bank and other accounts [tax deducted at source Rs. 61.1 millions(2005-06 Rs. 84.3 millions, 2004-05 Rs. 48.1 millions)] . . . . . . . . . . . . . . . . . . . . . . . . . 636.6 671.4 554.4 12.8

1,541.5 2,263.5 3,130.7 72.0

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Page 166: Tata Motors

SCHEDULE FORMING PART OF THE BALANCE SHEET ANDPROFIT AND LOSS ACCOUNT

SCHEDULE 14 (Contd.)

(B) Notes to Profit and Loss Account (contd.):

(5) Defined benefit plans / Long term compensated absences—As per actuarial valuations as on March 31, 2007 (Refer F-36 forUS $ Millions equivalents)

GratuitySuper-

annuationCompensated

absences

Post-retirementMedicarescheme BKY

(in Rs. Millions)i Components of employer expense

Current Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114.6 37.5 104.2 21.5 11.9Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177.6 73.5 59.6 27.3 23.3Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (205.9) (48.2) — — —Actuarial Losses/(Gains) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 651.3 (30.1) 314.8 140.0 42.3

Total expense / (income) recognised in the Statement of Profit & Loss Account in . . . . 737.6 32.7 478.6 188.8 77.5

Schedule B under item : (4)(b) (4)(b) (4)(a) (4)(c) (4)(c)ii Actual Contribution and Benefit Payments for year ended March 31, 2007

Actual benefit payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325.4 224.4 177.2 36.6 32.8Actual Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 788.6 182.9 N/A N/A N/A

iii Net asset/(liability) recognised in balance sheet as at March 31, 2007Present Value of Defined Benefit Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,099.8 948.8 1,235.9 511.4 352.8Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,111.1 561.0 — — —

Net asset/(liability) recognised in balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.3 (387.8) (1,235.9) (511.4) (352.8)iv Change in Defined Benefit Obligations (DBO) during the year ended March 31, 2007

Present Value of DBO at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,382.1 1,161.8 934.5 359.2 308.1Current Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114.6 37.5 104.2 21.5 11.9Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177.6 73.5 59.6 27.3 23.3Actuarial (gains)/ losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 750.9 (99.6) 314.8 140.0 42.3Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (325.4) (224.4) (177.2) (36.6) (32.8)

Present Value of DBO at the end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,099.8 948.8 1,235.9 511.4 352.8v Change in Fair Value of Assets during the year ended March 31, 2007

Plan assets at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,342.4 623.8 N/A N/A N/AActual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305.5 (21.3) N/A N/A N/AActual Company contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 788.6 182.9 N/A N/A N/ABenefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (325.4) (224.4) N/A N/A N/A

Plan assets at the end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,111.1 561.0 N/A N/A N/Avi Actuarial Assumptions

Discount Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5% 8.0% 8.5% 8.5% 8.5%Expected Return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.0% 8.0% N/A N/A N/ASalary escalation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5%-7.5% N/A 5%-7.5% N/A 5%-7.5%Medical cost inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A 4.0% N/A

vii The major categories of plan assets as percentage of total plan assetsDebt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51% 72% N/A N/A N/ABalances with banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49% 28% N/A N/A N/A

viii Effect of one percentage point change in assumed Medical inflation rate

One percentage pointincrease in Medical

inflation rate

One percentage pointdecrease in Medical

inflation rate

Revised DBO as at March 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563.9 465.5Revised service cost for 2006-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.8 19.6Revised interest cost for 2006-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.1 24.8

a) Defined Contribution Plans—

The Company’s contribution to defined contribution plan aggregated Rs.1,005.8 millions for the year ended March 31, 2007 has been recognised in thestatement of Profit and Loss Account under item 4 (b) in Schedule B.

b) The expected rate of return on plan assets is based on market expectation, at the beginning of the year, for returns over the entire life of the related obligation.

c) The assumption of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, suchas supply and demand in the employment market.

d) Effective April 1, 2006, the Company adopted the revised accounting standard on employee benefits. Pursuant to the adoption, the following amounts havebeen adjusted to General Reserve for difference as per revised AS15 :

Gross Tax Net

(in Rs. Millions)Gratuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.7 (13.4) 26.3Superannuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (65.8) 22.2 (43.6)BKY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (209.8) 70.6 (139.2)Ex Gratia on retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449.9 (151.5) 298.4

214.0 (72.1) 141.9

F-35

Page 167: Tata Motors

SCHEDULE FORMING PART OF THE BALANCE SHEET ANDPROFIT AND LOSS ACCOUNT

SCHEDULE 14 (Contd.)

(B) Notes to Profit and Loss Account (contd.):

(5) Defined benefit plans / Long term compensated absences—As per actuarial valuations as onMarch 31, 2007

GratuitySuper-

annuationCompensated

absences

Post-retirementMedicarescheme BKY

(in US $ Millions)i Components of employer expense

Current Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6 0.9 2.4 0.5 0.3Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 1.7 1.4 0.6 0.5Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.7) (1.1) — — —Actuarial Losses/(Gains) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.0 (0.7) 7.2 3.2 1.0

Total expense / (income) recognised in the Statement of Profit &Loss Account in . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.0 0.8 11.0 4.3 1.8

Schedule B under item: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4)(b) (4)(b) (4)(a) (4)(c) (4)(c)ii Actual Contribution and Benefit Payments for year ended

March 31, 2007Actual benefit payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.5 5.2 4.1 0.8 0.8Actual Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.1 4.2 N/A N/A N/A

iii Net asset/(liability) recognised in balance sheet as at March 31,2007Present Value of Defined Benefit Obligation . . . . . . . . . . . . . . . . . . . 71.3 21.8 28.4 11.8 8.1Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71.6 12.9 — — —

Net asset/(liability) recognised in balance sheet . . . . . . . . . . . . . . . 0.3 (8.9) (28.4) (11.8) (8.1)iv Change in Defined Benefit Obligations (DBO) during the year

ended March 31, 2007Present Value of DBO at beginning of year . . . . . . . . . . . . . . . . . . . . 54.8 26.7 21.5 8.3 7.1Current Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6 0.9 2.4 0.5 0.3Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 1.7 1.4 0.6 0.5Actuarial (gains)/ losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.3 (2.3) 7.2 3.2 1.0Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.5) (5.2) (4.1) (0.8) (0.8)

Present Value of DBO at the end of year . . . . . . . . . . . . . . . . . . . . 71.3 21.8 28.4 11.8 8.1v Change in Fair Value of Assets during the year ended March

31, 2007Plan assets at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.9 14.4 N/A N/A N/AActual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.0 (0.5) N/A N/A N/AActual Company contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.1 4.2 N/A N/A N/ABenefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7.5) (5.2) N/A N/A N/A

Plan assets at the end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71.5 12.9 N/A N/A N/Avi Actuarial Assumptions

Discount Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5% 8.0% 8.5% 8.5% 8.5%Expected Return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.0% 8.0% N/A N/A N/ASalary escalation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5%-7.5% N/A 5%-7.5% N/A 5%-7.5%Medical cost inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A 4.0% N/A

vii The major categories of plan assets as percentage of total planassetsDebt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51% 72% N/A N/A N/ABalances with banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49% 28% N/A N/A N/A

viii Effect of one percentage point change in assumed Medicalinflation rate

One percentage pointincrease in Medical

inflation rate

One percentage pointdecrease in Medical

inflation rate

Revised DBO as at March 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . 13.0 10.7Revised service cost for 2006-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . 0.5 0.5Revised interest cost for 2006-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . 0.7 0.6

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SCHEDULE 14 (Contd.)

(B) Notes to Profit and Loss Account (contd.):

a) Defined Contribution Plans—

The Company’s contribution to defined contribution plan aggregated US $ 23.1 millions for the year endedMarch 31, 2007 has been recognised in the statement of Profit and Loss Account under item 4 (b) inSchedule B.

b) The expected rate of return on plan assets is based on market expectation, at the beginning of the year, forreturns over the entire life of the related obligation.

c) The assumption of future salary increases, considered in actuarial valuation, take account of inflation,seniority, promotion and other relevant factors, such as supply and demand in the employment market.

d) Effective April 1, 2006, the Company adopted the revised accounting standard on employee benefits.Pursuant to the adoption, the following amounts have been adjusted to General Reserve for difference as perrevised AS 15 :

Gross Tax Net

(in US $ Millions)Gratuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9 (0.3) 0.6Superannuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.5) 0.5 (1.0)BKY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4.8) 1.6 (3.2)Ex Gratia on retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3 (3.5) 6.8

4.90 (1.70) 3.2

(6) Other Provisions include [Schedule 12 (d)]:

Year Ended March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

a) Product warranty :Opening Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,428.7 1,582.6 1,374.9 31.6Add:- Provision for the year (net)

(including additional provision for earlier years) . . . . . . . . . . . . . 1,460.4 1,238.6 1,775.0 40.8Less: Payments/ debits (net of recoveries from suppliers) . . . . . . . . . . . (1,306.5) (1,446.3) (1,662.4) (38.2)

Closing Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,582.6 1,374.9 1,487.5 34.2

The provision is expected to be utilised for settlement of warrantyclaims within a period of 2 to 3 years.

b) Premium on redemption of Foreign Currency Convertible Notes(FCCN) : [Note (C)(i)]:Opening Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.3 2,936.0 2,982.0 68.6Add:- Provisions for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,920.7 — — —Add /(Less) : Foreign currency exchange difference . . . . . . . . . . . . . . . — 58.7 (70.0) (1.6)Less : Reversal due to conversion of FCCN . . . . . . . . . . . . . . . . . . . . . . — (12.7) (69.5) (1.6)

Closing Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,936.0 2,982.0 2,842.5 65.4

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SCHEDULE 14 (Contd.)

(B) Notes to Profit and Loss Account (contd.):

(7) Earnings Per Share:

Year Ended March 31,

2005 2006 2007 2007

(a) Profit after tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rs. Millions 12,369.5 15,288.8 19,134.6 US $ Millions 440.2(b) The weighted average number of Ordinary Share

for Basic EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nos. 359,837,353 376,804,863 384,544,205(c) The nominal value per Ordinary Share . . . . . . . . . . Rupees 10 10 10(d) Earnings Per Share (Basic) . . . . . . . . . . . . . . . . . . . Rupees 34.38 40.57 49.76 US $ 1.14(e) Profit after tax for Basic EPS . . . . . . . . . . . . . . . . . Rs. Millions 12,369.5 15,288.8 19,134.6 US $ Millions 440.2

Add: Interest payable on outstanding ForeignCurrencyConvertible Notes . . . . . . . . . . . . . . . . . . . . . . . . . . Rs. Millions 90.5 101.8 99.4 US $ Millions 2.3

(f) Profit after tax for Diluted EPS . . . . . . . . . . . . . . . . Rs. Millions 12,460.0 15,390.6 19,234.0 US $ Millions 442.5(g) The weighted average number of Ordinary Shares

for Basic EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nos. 359,837,353 376,804,863 384,544,205(h) Add: Adjustment for Options relating to warrants,

fractional coupons and Foreign CurrencyConvertible Notes . . . . . . . . . . . . . . . . . . . . . . . . . . Nos. 26,719,121 26,042,196 22,622,790

(j) The weighted average number of Ordinary Sharefor Diluted EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nos. 386,556,474 402,847,059 407,166,995

(k) Earnings Per Share (Diluted) . . . . . . . . . . . . . . . . . . Rupees 32.23 38.20 47.24 US $ 1.09

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SCHEDULE 14 (Contd.)

(C) Other Notes

(i) Issue of Foreign Currency Convertible Notes (FCCN)

The Company issued the FCCN which are convertible into Ordinary Shares or ADRs. The particulars,terms of issue and the status of conversion as at March 31, 2007 is given below :

Issue 1% FCCN (due 2008) 0% FCCN (due 2009) 1% FCCN (due 2011) 0% FCCN (due 2011)

Issued on July 31, 2003 April 27, 2004 April 27, 2004 March 20, 2006

Issue Amount (in INR at thetime of the issue) US $100 million US $100 million US $300 million JP ¥11,760 million

(Rs.4,615.6 millions) (Rs.4,385.0 millions) (Rs.13,155.0 millions) (Rs.4,500.3 millions)

Face Value US $1000 US $1000 US $1,000 JP ¥10,000,000

Conversion Price per share Rs.250.745 Rs.573.106 Rs.780.400 Rs.1,001.39

at fixed exchange rate US $1 = Rs.46.16 US $1 = Rs.43.85 US $1 = Rs.43.85 Rs.1 = JP ¥2.66

Exercise Period after September 11,2003 June 7, 2004 to June 7, 2004 to May 2, 2006 to

and upto July 1,2008 March 28, 2009 March 28, 2011 February 19, 2011

Early redemption at theoption of the Companysubject to certainconditions

on or after July 31,2006

on or after April 27,2005 (in whole but

not in part) Not Applicable

i) after March 20, 2009 butprior to February 8, 2011

(in whole or in part) subjectto certain conditions

orii) any time (in whole butnot in part) in the event ofcertain changes affecting

taxation in India

Redeemable on July 31, 2008 April 27, 2009 April 27, 2011 March 21, 2011

Redemption percentage of thePrincipal Amount 116.824% 95.111% 121.781% 99.253%

Amount converted US $99.94 million US $93.89 million

(Rs.4,520.9 millions) (Rs.4,189.0 millions) Nil Nil

Aggregate conversion intoShares / ADRs 18,398,095 7,183,773 Nil Nil

Notes Outstanding as atMarch 31, 2007 60 6,110 300,000 1,176

Aggregate amount of sharesthat could be issued onconversion of outstandingnotes 11,045 467,494 16,856,740 4,414,916

(ii) In terms of the Scheme of Amalgamation (Scheme) sanctioned by order dated June 28, 2005, ofHon’ble High Court of Judicature at Mumbai, Tata Finance Ltd. (TFL) whose core business wasproviding finance for commercial vehicles, passenger cars and construction equipments wasamalgamated with the Company with effect from April 1, 2005.

In accordance with the said Scheme:

(a) the Authorised Share Capital of the Company was increased to Rs.4,100,000,000 divided into410,000,000 Ordinary Shares of Rs. 10 each.

(b) the assets, liabilities, rights and obligations of TFL were vested in the Company with effect fromApril 1, 2005 and were recorded at their respective carrying values under the pooling

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SCHEDULE 14 (Contd.)

(C) Other Notes (contd.)

of interest method of accounting for amalgamation after making adjustments to ensure uniform setof accounting policies as stated in (d) below.

(c) 14,504,949 Equity Shares of Rs.10 each of the Company were issued as fully paid-up to theholders of 181,311,857 Equity Shares of TFL, in the ratio of 8 Shares of the Company of Rs.10each for every 100 Shares of TFL of Rs.10 each, without payment being received in cash.

(d) the debit balance of Rs.1047.5 millions remaining in the Profit and Loss Account of TFL wastransferred to General Reserves and an amount of Rs.204.7 millions (net of deferred tax) wasadjusted to the General Reserves to ensure uniform set of accounting policies, in respect of someof the items of TFL.

(e) the reserves of TFL were incorporated in the Company’s books of account as reduced by Rs.599.3 millions towards cost of investments of the Company in the Equity Shares of TFL.

(f) the Preference Share Capital of TFL of Rs. 1500 millions was fully adjusted against theinvestments of the Company in the said Capital.

(g) the difference of Rs.1853.0 millions between the amounts recorded as Equity Share Capital to beissued to TFL shareholders and the amount of the Equity Share Capital of TFL was credited to theGeneral Reserve of the Company.

(h) Arrears of dividend on cumulative preference shares of TFL was provided from the broughtforward profits of the Company.

(iii) In terms of the Scheme of Amalgamation (Scheme) sanctioned by order dated June 29, 2005, ofHon’ble High Court of Judicature at Mumbai, Telco Dadajee Dhackjee Ltd (TDDL) and SuryodayaCapital Finance (Bombay) Ltd (SCFL), both 100% subsidiaries of the Company as on March 31, 2005,were amalgamated with the Company with effect from April 1, 2005.

In accordance with the said Scheme:

(a) the assets, liabilities, rights and obligations of TDDL and SCFL were vested in theCompany with effect from April 1, 2005 and were recorded at their respective carryingvalues under the pooling of interest method of accounting for amalgamation after makingadjustments to ensure uniform set of accounting policies as stated in (b) below.

(b) the credit balance of Rs. 6.6 millions remaining in the Profit and Loss Accounts of TDDLand the debit balance of Rs. 0.1 million of SCFL was transferred to General Reserve of theCompany and an amount of Rs. 0.8 million was adjusted to the General Reserves to ensureuniform set of accounting policies, in respect of some of the items of TDDL.

(c) the paid up share capital of TDDL and SCFL of Rs. 6.5 millions and Rs. 0.5 millionrespectively was adjusted against the cost of investment of the Company in the equity sharecapital of TDDL and SCFL respectively, and the balance cost of investment of Rs. 446.1millions and Rs. 7.7 millions of the Company in the equity share capital of TDDL andSCFL respectively, were adjusted against the reserves of the Company as under :

— Securities Premium Rs. 115.6 millions (TDDL)

— General Reserves Rs. 338.2 millions

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SCHEDULE 14 (Contd.)

(C) Other Notes (contd.)

(d) the Special Reserve (created pursuant to section 45 IC of the RBI Act, 1934) of Rs. 12.7 millionsand the Revaluation Reserve of Rs. 268.2 millions were recorded in the Company’s books in thesame form.

(iv) In the year 2005-06, the Company diluted its shareholding in its subsidiary Telco ConstructionEquipment Company Ltd (TELCON) from 79.75% to 59.75%. As a result of this transaction, theCompany earned a profit of Rs. 1,643.0 millions.

(v) The Company acquired 21% shares in Hispano Carrocera, S.A. on March 16, 2005 at a cost of Rs. 23.4Millions. Additionally, the Company has given a unsecured loan of Euro 7 million (Rs. 396.6Millions).

(vi) Figures for 2005-06 and 2004-05 have been re-grouped, where necessary, to make them comparable.

(vii) The rate of exchange used for converting rupees into U.S. $1 = Rs. 43.47 being the average of the T.T(telegraphic transfer) buying and selling rates as on March 30, 2007 as quoted by the State Bank ofIndia.

(viii) The figures disclosed in the non-consolidated Financial Statements are extracted from the auditedfinancial statements for the years ended March 31, 2005, March 31, 2006 and March 31, 2007,approved by the Board of Directors on May 17, 2005, May 19, 2006 and May 18, 2007 respectively,and on which auditor viz. Messrs Deloitte Haskins & Sells ( joint auditors Messrs A.F.Ferguson & Co.and Messrs S. B. Billimoria for the year ended March 31, 2005) have issued their opinion datedMay 17, 2005, May 19, 2006 and May 18, 2007 respectively. Any event subsequent to the said dateshas not been considered/ adjusted.

(ix) The financial results for the years ended March 31, 2006 and March 31, 2007, include the results of theoperations of erstwhile TFL, TDDL and SCFL. The comparative figures for the year ended March 31,2005, do not include the results of the operations of TFL, TDDL and SCFL, and as such, the financialresults for the years ended March 31, 2006 and March 31, 2007, are not comparable to this extent.

(x) Figures in the Notes / Schedules to the Financial Statements pertain to 2006-07 unless otherwise stated/ indicated.

(xi)*under column “in U.S.$ Millions” represents amount less than U.S.$ 50,000/-

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SCHEDULE 14 (Contd.)

(D) Derivative transactions

The Company uses forward exchange contracts, principal only swaps, interest rates swaps, currency swapsand currency options to hedge its exposure in foreign currency and interest rates. The information on derivativeinstruments is as follows :

a) Derivative Instruments outstanding as at March 31, 2007 and March 31, 2006

Currency

Amount(Foreign Currency

in Millions) Buy/SellAmount

(Rs in Millions)

i) Forward exchange contracts (net)US$ / INR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 US$ 239.90 Sold 10,433.1

2006 US$ 160.08 Sold 7,142.3EUR / US$ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 €6.77 Sold 391.8

2006 €1.60 Bought 86.4US$ / JPY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 US$ 2.00 Bought 87.0

2006 — —ii) Principal only swaps (net)

US$ / INR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 US$ 10.27 Bought 446.82006 US$ 10.27 Bought 458.7

iii) Currency swapsUS$ / JPY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 — —

2006 US$ 5.00 Bought 223.1JPY / INR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 — —

2006 ¥638.11 Sold 241.8iv) Interest swaps (notional principal)

US$ Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 US$ 25.00 — 1,087.32006 US$ 25.00 — 1,115.4

INR Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 INR 1,250.00 — 1,250.02006 — — —

v) Options (net)US$ / JPY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 US$ 96.49 To Sell 4,196.5

2006 — —US$ / INR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 US$ 27.50 To Sell 1,196.0

2006 US$ 84.50 To Sell 3,770.1EUR / US$ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 €35.00 Hybrid 2,026.2

2006 €13.00 Bought 701.5US$ / CHF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 US$ 9.50 Hybrid 413.2

2006 — —

b) Foreign exchange currency exposures not covered by derivative instruments as at March 31, 2007and March 31, 2006

Amount(Foreign Currency

in Millions)

Amount(Rs in

Millions)

Amount(in U.S. $Millions)

i) Amount receivable on account of Sales of Goods, loan and interestcharges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 US$ 1.10 47.9 1.1

2006 US$ 2.54 113.42007 €7.62 441.0 10.12006 €10.93 589.62007 £1.46 124.5 2.92006 £2.17 168.0

ii) Creditors payable on account of Loan and Interest charges and otherforeign currency expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 US$ 702.41 30,547.8 702.7

2006 US$ 355.14 15,845.52007 €21.35 1,235.9 28.42006 — —2007 £1.94 165.1 3.82006 £0.73 56.52007 ¥129.97 47.8 1.12006 ¥141.32 53.22007 Others 28.3 0.72006 Others 17.5

c) Figures for the year 2004-05 in (a) & (b) above have not been disclosed as the provisions of theAnnouncement issued by the Institute of Chartered Accountants of India were not applicable in the year2004-05.

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SCHEDULE 14 (Contd.)

(E) Information in regard to opening stock and closing stock :

Year Ended March 31,

2005 2006 2007 2007

QuantityNos.

Value inRs. Millions

QuantityNos.

Value inRs. Millions

QuantityNos.

Value inRs. Millions

(in U.S. $Millions)

(a) Opening Stock—Light, medium and heavy commercialvehicles, jeep type vehicles, passengercars, utility vehicles etc. and bodiesthereon . . . . . . . . . . . . . . . . . . . . . . . . . . 9,107 3,581.0 10,028 4,066.2 11,874 6,181.4 142.2Manufactured and purchasedcomponents for sale :Spare Parts for Vehicles . . . . . . . . . . . . 1,093.0 1,177.9 1,395.6 32.1Scrap . . . . . . . . . . . . . . . . . . . . . . . . . . . 78.9 88.8 106.5 2.5

4,752.9 5,332.9 7,683.5 176.8

(b) Closing Stock—Light, medium and heavy commercialvehicles, jeep type vehicles, passengercars, utility vehicles etc. and bodiesthereon . . . . . . . . . . . . . . . . . . . . . . . . . . 10,028* 4,066.2 11,874* 6,181.4 17,093* 8,888.8 204.5Manufactured and purchasedcomponents for sale :Spare Parts for Vehicles . . . . . . . . . . . . 1,177.9 1,395.6 2,048.9 47.1Scrap . . . . . . . . . . . . . . . . . . . . . . . . . . . 88.8 106.5 92.5 2.1

5,332.9 7,683.5 11,030.2 253.7

* Excluding:(i) Capitalised / transferred for internal use 569 vehicles (2005-06 : 506 vehicles; 2004-05: 406 vehicles) including 3 vehicles

(2005-06 : 13 vehicles; 2004-05: Nil) for homologation / testing.(ii) Transferred on settlement of insurance claims for damaged vehicles 37 vehicles (2005-06 : 50 vehicles; 2004-05: 47 vehicles).(iii) Donated 9 vehicles (2005-06 : Nil; 2004-05: 1 vehicle).

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SCHEDULE 15

Information in regard to Sales effected by the Company (excluding inter-divisional transfers, settlementsfor damaged goods and goods capitalised) :

Year Ended March 31,

2005 2006 2007 2007

QuantityNos.

Value inRs. Millions

QuantityNos.

Value inRs. Millions

QuantityNos.

Value inRs. Millions

(in U.S. $Millions)

1. Light, medium and heavy commercialvehicles, jeep type vehicles, passengercars, utility vehicles etc. and bodiesthereon . . . . . . . . . . . . . . . . . . . . . . . . . 399,566 190,626.9 454,129 218,215.3 580,280 292,110.4 6,719.8

2. Spare Parts for Vehicles . . . . . . . . . . . 7,576.1 9,427.0 12,201.0 280.73. Export incentives . . . . . . . . . . . . . . . . . 653.9 1,986.5 589.7 13.64. Diesel Engines . . . . . . . . . . . . . . . . . . . 5,623 523.1 7,077 664.9 8,587 698.9 16.15. Scrap . . . . . . . . . . . . . . . . . . . . . . . . . . 900.1 1,003.6 1,112.9 25.66. Castings and Forgings . . . . . . . . . . . . . 1,590.0 2,621.8 2,841.4 65.47. Income from Services . . . . . . . . . . . . . 304.1 475.0 440.0 10.1

202,174.2 234,394.1 309,994.3 7,131.3

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SCHEDULE 16

Quantitative information in regard to installed capacity and the goods manufactured by the Company :Unit of

measurementYear endingMarch 31,

Installedcapacity*

Actualproduction**

1. On road automobiles having four or more wheels such as light,medium and heavy commercial vehicles, jeep type vehicles andpassenger cars covered under Sub-heading (5) of Heading (7) of FirstSchedule (Jamshedpur Works) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nos. 200720062005

96,00066,00060,000

98,22769,89171,023

2. Motor Vehicles for transport of ten or more persons including thedriver, motor cars and other motor vehicles for transport of persons,motor vehicles for transport of goods, chassis fitted with engine formotor vehicles (Pune Works) Licensed Capacity : 400,000 Nos . . . . .

Nos. 200720062005

556,000439,500424,500

458,324366,468311,269

3. Motor Vehicles for transport of ten or more persons including thedriver, motor cars and other motor vehicles for transport of persons,motor vehicles for transport of goods, chassis fitted with engine formotor vehicles (Lucknow Works) . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Nos. 200720062005

30,00030,00030,000

28,23519,96318,649

4. Diesel Engines for Industrial and Marine applications . . . . . . . . . . . . . Nos. 200720062005

*********

8,4987,1415,667

5. S. G. Iron Castings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tonnes 200720062005

12,00012,00011,000

14,50513,10212,615

6. S. G. / Grey Iron Semis by continuous casting process . . . . . . . . . . . . Tonnes 200720062005

3,6003,6003,600

———

7. Power Generation (windmills on amalgamation of Tata FinanceLtd.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

KW 200720062005

192282000192282000

( —)

3440762532719092

( —)

8. Manufactured Components for Sale **** . . . . . . . . . . . . . . . . . . . . . . Rupees Millions 200720062005

4,449.14,060.42,604.6

US $Millions 2007 102.3

* On double shift basis including capacity for manufacture of replacement parts as certified by the management and relied upon by theAuditors.

** Includes production for internal use.*** These are manufactured against spare capacity under (1) and (2) above.**** The production disclosed against manufactured components is the value (as this is more meaningful than quantity) of such components

transferred during the year to the warehouses for sale.

NOTE :

In addition to the above, Company holds following industrial licenses / Industrial Enterpreneurs Memoranda (IEM) for which there is noproduction during the year:

a) Rotary position encoder and readout, electronic comparator, electronic weighing instruments, crane-weighing instruments and test rigequipment.

b) Special Purpose Motor Vehicle, other than those principally designed for the transport of persons or goods.

c) Truck and Bus Bodies.

d) Automotive equipment for various defence applications such as different types of armoured vehicles, heavy tank carriers, sheltars,containers, tactical floating bridges and ferries, bullet proof vehicles, high mobility vehicles, mechanised material handling and bridgingequipment, mine protected vehicles, etc.

e) Certain types of electric equipment such as printed circuit motors, spot welding guns, in-process gauging, linear poistion encoder andreadout, proximity switch, numerical control machine tools, solid state controllers for machine tools, Hoists and LDTV,vertical bardisplay, analogue timer, digital counter / timer.

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SCHEDULE FORMING PART OF THEPROFIT AND LOSS ACCOUNT

SCHEDULE 17

Information regarding exports and imports and other matters :

Year ended March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

1. Earnings in foreign exchange :(i) F.O.B. value of goods exported [including sales through Exports House, exports

to Nepal, Bhutan and local sales eligible for export incentives and exchangedifferences (net)—loss of Rs. 12.9 Millions (2005-06 loss of Rs. 28.3 Millions,2004-05 loss of Rs. 78.3 Millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,526.9 21,966.9 26,873.0 618.2

(ii) Interest and Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284.2 238.2 31.1 0.7(iii) Others (Profit on sale of investments) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167.4 1,643.0 242.7 5.6

2. C.I.F. value of Imports(i) Raw materials and components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,613.4 8,179.8 9,300.5 214.0(ii) Machinery spares and tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335.7 275.9 319.2 7.3(iii) Capital goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,268.4 2,648.8 4,727.6 108.8(iv) Spare Parts for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 53.4 113.8 2.6(v) Other items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.2 73.4 86.6 2.0

3. (a) Value of imported and indigenous raw materials and components consumed :(i) Imported at Rupee cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,598.5 6,160.1 6,967.1 160.3(ii) Indigenously obtained . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110,004.0 126,491.1 172,190.2 3,961.1

(b) Percentage to total consumption :(i) Imported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . % 2.3 4.6 3.9 3.9(ii) Indigenously obtained . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .% 97.7 95.4 96.1 96.1

Note : In giving the above information, the Company has taken the view that spares and components as referred to in Clause 4D(c) of Part IIof Schedule VI covers only such items as consumed directly in production.

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SCHEDULES FORMING PART OF THEPROFIT AND LOSS ACCOUNT

SCHEDULE 17 (Contd.)

Year Ended March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

4. Expenditure in foreign currency (subject to deduction of tax whereapplicable) :(i) Technical Know-how fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 768.9 915.6 1,888.8 43.5(ii) Interest (including interest on convertible debentures held by non-

residents and payments in Rupees to financial institutions on foreigncurrency loans) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450.2 591.9 886.0 20.4

(iii) Commission on Exports (paid through Export House) . . . . . . . . . . . 158.2 65.7 - -(iv) Consultancy/Professional charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 309.9 281.8 640.7 14.7(v) Payments on Other Accounts [including Exchange differences

(net)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,025.4 891.5 1,811.8 41.75. Remittances in foreign currencies for dividends:

The Company does not have complete information as to the extent towhich remittances in foreign currencies on account of dividends havebeen made by or on behalf of non-resident shareholders. The particularsof dividends declared during the year and payable to non- residentshareholders for the years 2005-06, 2004-05 and 2003-04 are asunder:—(i) Number of non-resident shareholders

a) For 2005-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nos. — — 5,288b) For 2004-05 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nos. — 5,093 —c) For 2003-04 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nos. 5,004 — —

(ii) Number of shares held by thema) For 2005-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nos. — — 151,792,702b) For 2004-05 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nos. — 140,562,391 —c) For 2003-04 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nos. 131,002,712 — —

(iii) Gross amount of dividenda) For 2005-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1,973.3b) For 2004-05 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1,757.0 —c) For 2003-04 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,240.0 — —

SCHEDULE 18Information in regard to raw materials and components consumed :

Year Ended March 31,

Unit ofMeasurement 2005 2006 2007

QuantityValue in

Rs. Millions QuantityValue in

Rs. Millions QuantityValue in

Rs. Millions(in U.S. $Millions)

Steel . . . . . . . . . . . . . . . . . . . Tonnes 137,562 4,386.5 164,284 5,815.0 216,083 6,610.5 152.1Steel Tubes . . . . . . . . . . . . . . Tonnes 750 39.2 730 47.5 112 8.6 0.2Non-ferrous

alloys/metals . . . . . . . . . . . Tonnes 2,238 242.4 2,306 272.5 2,658 429.5 9.9Ferro Alloys . . . . . . . . . . . . . Tonnes 1,711 100.0 1,626 100.5 1,862 119.6 2.8Steel Melting Scrap . . . . . . . Tonnes 78,735 1,245.6 79,463 1,205.9 97,608 1,471.1 33.8Paints, Oils and

Lubricants . . . . . . . . . . . . . Tonnes 4,075 4,390 8,827Kilo liters 11,189� 1,561.0 14,366� 1,749.0 14,769� 2,183.3 50.2

Tyres, Tubes and Flaps . . . . . Nos. 3,516,894 7,467.8 3,700,687 8,412.0 4,610,652 13,597.0 312.8Engines . . . . . . . . . . . . . . . . . Nos. 68,011 8,014.0 61,643 8,658.4 84,472 11,790.1 271.2Other components . . . . . . . . . 89,546.0 106,390.4 142,947.6 3,288.4

112,602.5 132,651.2 179,157.3 4,121.4

Note: The Consumption figures shown above are after adjusting excesses and shortages ascertained on physical count, unserviceable items,etc. The figures of other components is a balancing figure based on the total consumption shown in the profit and loss account.

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Page 179: Tata Motors

AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

To The Board of DirectorsTata Motors Limited

1. We have examined the Consolidated Balance Sheets of Tata Motors Limited (‘the Company’), and itssubsidiaries (the Company and its subsidiaries constitute ‘the Group’) as at March 31, 2005, 2006 and 2007and also the Consolidated Profit and Loss Account and Consolidated Cash Flow Statement for the yearsended on these dates and the accompanying notes and schedules (together comprising the “ConsolidatedFinancial Statements”) all expressed in Indian Rupees, as set out in the accompanying Memorandum onpages F-50 to F-91. These Consolidated Financial Statements are the responsibility of the Company’sManagement. Our responsibility is to express an opinion on these Consolidated Financial Statements basedon our audit.

2. The figures disclosed in the Consolidated Financial Statements are extracted from the audited IndianConsolidated Accounts, regrouped where necessary, and our opinion stated herein is as stated in the opinionfor each of the years [note (C) 8 on Schedule 14]. The Indian Consolidated Accounts for the years endedMarch 31, 2005 were jointly audited by Messrs A. F. Ferguson & Co. and Messrs S. B. Billimoria & Co.(‘the Erstwhile Auditors’) and have been relied upon for the purpose of this report. The audit is conducted inaccordance with auditing standards generally accepted in India. Those standards require that the audit beplanned and performed to obtain reasonable assurance about whether the Financial Statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the Financial Statements. An audit also includes assessing the accounting principles used andsignificant estimates made by the Management. The audit provides a reasonable basis for the opinion.

3. (a) We did not audit the financial statements of certain subsidiaries, whose financial statements reflecttotal assets (net) of Rs. 26,725.3 Millions as at March 31, 2007 (March 31,2006 Rs. 17,662.2 Millions),total revenues for the year ended March 31, 2007 of Rs. 62,842.5 Millions (March 31, 2006 Rs.41,500.9 Millions) and net cash outflows from operating activities for the year ended March 31, 2007amounting to Rs. 31,477.1 Millions (March 31, 2006 Rs. 3,657.1 Millions) and of certain associateswhose financial statements reflect the Group’s share of profit (net) of Rs. 463.3 Millions for the yearended March 31, 2007 (March 31, 2006 Rs.312.1 Millions) and Group’s share of profit (net) ofRs. 547.8 Millions up to March 31, 2007 (March 31, 2006 Rs. 388.7 Millions). These financialstatements and other financial information have been audited by other auditors whose reports havebeen furnished to us by the Management of the Group, and our opinion is based solely on the reports ofthe other auditors.

(b) Further, the Erstwhile Auditors did not audit the financial statements of certain subsidiaries, whosefinancial statements reflect total assets (net) of Rs. 8,480.5 Millions as at March 31, 2005, and totalrevenue for the year ended March 31, 2005 of Rs. 15,496.0 Millions, and net cash flows from operatingactivities amounting to Rs. 56.1 Millions, and of the associates which reflect the Group’s share of loss(net) of Rs. 1.9 Millions for the year ended March 31, 2005 and up to March 31, 2005 Group’s share ofloss (net) Rs. Nil. These financial statements and other financial information have been audited by theother auditors whose reports have been furnished to the Erstwhile Auditors by the Management of theGroup, and the Erstwhile Auditors’ opinion, is based solely on the reports of the other auditors.

(c) As stated in note (B) (6) on the Schedule 14 as the audited financial statements of associates, whosefinancial statements reflect the Group’s share of loss (net) for the year ended March 31, 2007 ofRs. 69.1 Millions (for March 31, 2006 profits (net) of Rs. 127.2 Millions and for March 31, 2005profits (net) of Rs. 206.7 Millions), and up to March 31, 2007 Group’s share of loss (net) of Rs. 17.1Millions (up to March 31, 2006 profits (net) of Rs. 67.0 Millions and up to March 31, 2005 profits (net)of Rs. 131.9 Millions) were not available, we / the Erstwhile Auditors have relied upon the unauditedfinancial statements as provided by the management of those components for the purpose of ourexamination of the Consolidated Financial Statements.

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4. We report that the Consolidated Financial Statements have been prepared by the Company’s Management inaccordance with the requirements of Accounting Standard 21 ‘Consolidated Financial Statements’ andAccounting Standard 23 ‘Accounting for Investments in Associates in Consolidated Financial Statements’,issued by the Institute of Chartered Accountants of India.

5. In our opinion and to the best of our information and according to the explanations given to us, on the basisstated in paragraph (2) above, the Consolidated Financial Statements give a true and fair view in conformitywith the accounting principles generally accepted in India:

i. in the case of the Consolidated Balance Sheet, of the consolidated state of affairs of the Group as atMarch 31, 2005, 2006 and 2007;

ii. in the case of the Consolidated Profit and Loss Account, of the consolidated profits of the Group for theyears ended on those dates; and

iii. in the case of the Consolidated Cash Flow Statement, of the consolidated cash flows of the Group forthe years ended on those dates.

6. The amounts for the year ended and as at March 31, 2007 expressed in U.S. dollars, provided assupplementary information solely for the convenience of the reader, have been translated on the basis setforth in note (C) (7) on Schedule 14 to the Financial Statements.

For DELOITTE HASKINS & SELLSChartered Accountants

M. S. DharmadhikariPartnerMembership No. 30802Mumbai: July 6, 2007

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AUDITED CONSOLIDATED FINANCIAL STATEMENTS OFTATA MOTORS LIMITED

CONSOLIDATED BALANCE SHEET

As at March 31,

Schedule 2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

SOURCES OF FUNDS1. SHAREHOLDERS’ FUNDS

(a) Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 3,617.9 3,828.7 3,854.1 88.7(b) Reserves and Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 40,353.7 57,486.0 73,362.6 1,687.6

43,971.6 61,314.7 77,216.7 1,776.32. MINORITY INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 630.5 1,739.3 2,499.6 57.53. LOAN FUNDS

(a) Secured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 5,767.0 8,816.2 44,626.5 1,026.5(b) Unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 21,375.0 24,975.2 28,392.5 653.2

27,142.0 33,791.4 73,019.0 1,679.74. DEFERRED TAX LIABILITY (NET) [Note A (6) Schedule 14] . . . . . . . 6,205.4 6,767.9 8,172.7 188.1

5. TOTAL FUNDS EMPLOYED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,949.5 103,613.3 160,908.0 3,701.6

APPLICATION OF FUNDS6. FIXED ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

(a) Gross Block . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,006.3 93,050.0 103,591.8 2,383.1(b) Less—Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,593.3 48,435.6 54,266.5 1,248.4

(c) Net Block . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,413.0 44,614.4 49,325.3 1,134.7(d) Capital Work-in-Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,409.9 9,744.9 25,816.5 593.9

45,822.9 54,359.3 75,141.8 1,728.6

7. GOODWILL (On Consolidation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 516.2 4,122.1 4,430.1 101.9

8. INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 21,263.6 12,615.0 11,745.9 270.2

9. CURRENT ASSETS, LOANS AND ADVANCES(a) Interest accrued on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.3 64.9 62.7 1.4(b) Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 20,620.4 24,810.4 31,669.0 728.5(c) Sundry Debtors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 12,414.0 13,544.8 17,022.2 391.6(d) Cash and Bank Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 20,973.2 13,864.4 11,542.7 265.5(e) Loans and Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 26,472.7 58,284.0 97,828.3 2,250.5

80,541.6 110,568.5 158,124.9 3,637.510. CURRENT LIABILITIES AND PROVISIONS

(a) Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 57,958.7 64,436.6 72,349.6 1,664.3(b) Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 12,453.0 13,754.1 16,304.4 375.0

70,411.7 78,190.7 88,654.0 2,039.311. NET CURRENT ASSETS [(9) less (10)] . . . . . . . . . . . . . . . . . . . . . . . . . 10,129.9 32,377.8 69,470.9 1,598.2

12. MISCELLANEOUS EXPENDITURE . . . . . . . . . . . . . . . . . . . . . . . . . . .(to the extent not written off or adjusted)

13 216.9 139.1 119.3 2.7

13. TOTAL ASSETS (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,949.5 103,613.3 160,908.0 3,701.6

14. BASIS OF CONSOLIDATION AND SIGNIFICANT ACCOUNTINGPOLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15. NOTES TO BALANCE SHEET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

F-50

Page 182: Tata Motors

TATA MOTORS LIMITED

CONSOLIDATED PROFIT AND LOSS ACCOUNT

Year Ended March 31,

Schedule 2005 2006 2007 2007

(in Rs. Millions) ( in U.S.$Millions)

INCOME1. SALE OF PRODUCTS AND OTHER INCOME FROM OPERATIONS . . . A(1) 227,046.6 272,637.3 369,878.2 8,508.8

LESS: EXCISE DUTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,435.1 34,942.8 45,614.1 1,049.3

195,611.5 237,694.5 324,264.1 7,459.52. DIVIDEND AND OTHER INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A(2) 1,339.4 2,435.2 1,531.8 35.2

196,950.9 240,129.7 325,795.9 7,494.7EXPENDITURE3. MANUFACTURING AND OTHER EXPENSES . . . . . . . . . . . . . . . . . . . . . . B 173,359.9 211,007.6 290,504.8 6,682.94. EXPENDITURE TRANSFERRED TO CAPITAL AND OTHER

ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,673.8) (3,795.8) (7,399.1) (170.2)

170,686.1 207,211.8 283,105.7 6,512.7

PROFIT BEFORE DEPRECIATION, INTEREST,AMORTISATION, EXCEPTIONAL ITEMS AND TAX . . . . . . . . . . . . . . . . . 26,264.8 32,917.9 42,690.2 982.05. PRODUCT DEVELOPMENT EXPENDITURE . . . . . . . . . . . . . . . . . . . . . . . 671.2 717.7 850.2 19.66 DEPRECIATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,310.1 6,233.1 6,880.9 158.37. INTEREST [Note B (1) Schedule 14] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,696.6 2,460.1 4,058.1 93.48. AMORTISATION OF MISCELLANEOUS EXPENDITURE IN

SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.3 0.2 5.2 0.1

PROFIT FOR THE YEAR BEFORE EXCEPTIONAL ITEMS AND TAX . . 18,557.6 23,506.8 30,895.8 710.69. PROVISION FOR DIMINUTION IN VALUE OF INVESTMENTS

(Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (40.0) (17.0) (11.8) (0.3)10. EMPLOYEE SEPARATION COST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (36.7) — (2.6) (0.1)

PROFIT BEFORE TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,480.9 23,489.8 30,881.4 710.211. TAX EXPENSE [Note A (6c) Schedule 14] . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,906.2) (6,400.0) (8,832.1) (203.2)

PROFIT AFTER TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,574.7 17,089.8 22,049.3 507.012. ADJUSTMENT OF MISCELLANEOUS EXPENDITURE IN

SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (37.8) (25.3) (1.4) *13. SHARE OF MINORITY INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (84.8) (222.9) (742.2) (17.1)14. SHARE OF PROFIT IN RESPECT OF INVESTMENTS IN ASSOCIATE

COMPANIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401.3 439.3 394.2 9.1

PROFIT FOR THE YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,853.4 17,280.9 21,699.9 499.015. BALANCE BROUGHT FORWARD FROM PREVIOUS YEAR . . . . . . . . . 2,834.7 6,345.3 9,841.0 226.4

Less: Arrears of preference dividend pertaining to erstwhile Tata FinanceLtd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 199.4 — —

16. ADJUSTMENT FOR REVISED ‘AS’ 15 IN A SUBSIDIARY . . . . . . . . . . . — — (6.9) (0.2)17. TRANSLATION ON OPENING BALANCE IN RESPECT OF FOREIGN

SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 12.3 (10.0) (0.2)18. ADJUSTMENT IN RESPECT OF INVESTMENTS IN ASSOCIATE

COMPANIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.3 — — —

AMOUNT AVAILABLE FOR APPROPRIATIONS . . . . . . . . . . . . . . . . . . . . . 16,710.4 23,439.1 31,524.0 725.0

19. APPROPRIATIONSa) Tax on Interim Dividend by subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . — — 45.6 1.0b) Proposed Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,521.9 4,979.4 5,780.7 133.0c) Tax on Proposed Dividend (including our share of subsidiaries’

dividend tax) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 697.3 864.5 1,055.2 24.3d) Residual dividend paid for previous financial year (including tax) . . . . . 15.4 — 0.7 (0.1)e) General Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,161.6 7,683.7 10,316.3 237.3f) Special Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.8 14.3 52.6 1.2g) Reserve for Research and Human Resource Development . . . . . . . . . . . . — 56.2 608.3 14.0h) Debenture Redemption Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (46.9) — — —j) Balance carried to Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,345.3 9,841.0 13,664.6 314.3

16,710.4 23,439.1 31,524.0 725.0

20. EARNINGS PER SHARE [Note B (3) Schedule 14]Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rupees 38.50 45.86 56.43 U.S. $ 1.30Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rupees 36.07 43.15 53.54 U.S. $ 1.23

21. BASIS OF CONSOLIDATION AND SIGNIFICANT ACCOUNTINGPOLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

22. NOTES TO PROFIT AND LOSS ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . 14

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TATA MOTORS LIMITED

CONSOLIDATED CASH FLOW STATEMENT

Year Ended March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S.$Millions)

A. Cash Flow from Operating ActivitiesNet Profit after tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,853.4 17,280.9 21,699.9 499.2Adjustments for:Depreciation (including Lease Equilisation netted off against income) . . . . . . . . . . . . . 5,310.1 6,248.5 6,843.1 157.4(Profit) / Loss on Sale of Assets (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.8 (57.4) (173.9) (4.0)Profit on Sale of Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (538.5) (1,678.8) (429.4) (9.9)Provision for diminution in value of investments (net) . . . . . . . . . . . . . . . . . . . . . . . . . . 40.0 17.0 11.8 0.3Share of Profit in respect of Investments in associate companies . . . . . . . . . . . . . . . . . . (401.3) (439.3) (394.2) (9.1)Share of minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84.8 222.9 742.2 17.1Wealth tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7 4.9 6.8 0.2Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,045.2 4,978.9 7,220.4 166.1Deferred tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 861.0 1,421.1 1,611.7 37.1Interest / Dividend (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 895.7 1,789.6 2,975.3 68.4Gain on issue of shares by a subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (86.2) (19.6) (0.5)Loss on liquidation of subsidiaries (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 30.6 0.7Exchange difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (63.6) 322.6 (693.9) (16.0)Amortisation of miscellaneous expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67.1 25.5 6.6 0.2Employee separation cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75.6 56.1 40.3 0.9

Operating Profit before working capital changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,296.0 30,106.3 39,477.7 908.1Adjustments for:Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,390.6) (4,966.2) (7,872.7) (181.1)Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,834.5) (4,051.6) (6,840.1) (157.5)Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,429.7 3,403.9 8,019.1 184.5Vehicle / other loans and hire purchase receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,832.7) (17,826.0) (34,676.2) (797.7)

Cash (used in) / from Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,667.9 6,666.4 (1,892.2) (43.7)Direct Taxes Paid (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,622.1) (5,561.8) (6,862.6) (157.9)

Net Cash (used in) / from Operating Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,045.8 1,104.6 (8,754.8) (201.6)

B. Cash Flow from Investing ActivitiesPurchase of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,739.7) (12,591.9) (27,587.5) (634.6)Sale of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300.2 154.5 993.4 22.9Acquisition of a subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (92.4) (4,589.5) — —Purchase of investments in associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (233.4) (0.2) — —Loan given to associate company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (396.6) — — —Loan given to affiliate company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,700.0) — — —Sale of investments in Mutual Fund (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,773.0 8,076.5 1,383.5 31.8Purchase of investments—others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,254.9) (690.6) (183.5) (4.2)Refund of acquisition tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.9 — — —Refund from escrow account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 33.4 — —Purchase of subsidiaries shares from Minority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (94.7) — — —(Increase) / Decrease in Investments in retained interests in securitisation

transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 595.8 914.7 (286.6) (6.6)Sale/redemption of investments in subsidiary companies . . . . . . . . . . . . . . . . . . . . . . . . — 2,062.8 — —Sale of investments in associate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 14.6 0.3Sale/redemption of investments in others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,252.6 396.2 420.4 9.7Payment for purchase of business from administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (4.4) (0.1)Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 495.9 753.4 450.1 10.4Dividend received from associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 307.8 7.1Dividend / Income on investments received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,028.3 749.6 1,027.3 23.6(Increase) / Decrease in short term Inter corporate deposit . . . . . . . . . . . . . . . . . . . . . . . (370.0) 257.4 (600.0) (13.8)

Net Cash used in Investing Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,393.0) (4,473.7) (24,064.9) (553.5)

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TATA MOTORS LIMITED

CONSOLIDATED CASH FLOW STATEMENT (contd.)

Year Ended March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S.$Millions)

C. Cash Flow from Financing ActivitiesProceeds from issue of Foreign Currency Convertible Notes (net of expenses) . . . . . . . . 17,315.0 4,449.9 — —Stamp duty on FCCN conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (3.7) (0.9) *Premium on redemption of debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (118.6) — — —Proceeds from long term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,315.2 2,713.8 42,135.1 969.3Repayment of long term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,230.2) (6,263.6) (9,779.8) (225.0)Increase / (Decrease) in short term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,508.5) 989.5 8,610.0 198.1Proceeds from issue of shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 718.1 — — —Proceeds from issue of shares to minority shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 373.1 155.8 3.6Payment of premium on long term forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (30.7) (0.7)Preliminary expenses incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (27.1) (0.6)Dividends paid (including Dividend Tax) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,681.1) (5,240.2) (5,753.9) (132.4)Tax paid on Interim Dividend by Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (45.6) (1.0)Dividends paid to minority shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (73.4) (1.7)Interest paid (including discounting charges paid, Rs. 1,859.8 Millions, 2005-06 Rs.

1,649.9 Millions and 2004-05 Rs. 1,410.8 Millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,417.3) (3,256.1) (4,653.8) (107.1)

Net Cash (used in) / from Financing Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,394.9 (6,237.3) 30,535.7 702.5

Net Increase / (Decrease) in Cash & Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,047.7 (9,606.4) (2,284.0) (52.6)Cash and cash equivalents as at March 31 (Opening balance) . . . . . . . . . . . . . . . . . . . . . . 9,674.3* 20,973.2* 13,864.4* 318.9Add: Cash and bank balance taken over on merger of TFL . . . . . . . . . . . . . . . . . . . . . . . . — 1,945.8 — —Add: Cash and bank balances taken over on acquisitions of INCAT, TTPL and

CEDIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 579.7 — —Add: Cash and bank balances taken over on acquisition of TMISL . . . . . . . . . . . . . . . . . 25.9 — — —Less: Cash and bank balances of subsidiaries under liquidation, taken over by

Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (5.5) (0.1)Add: Translation adjustment on opening cash and bank balances of foreign

subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225.3 32.2 43.2 1.0Add: Translation adjustment on reserves of foreign subsidiaries . . . . . . . . . . . . . . . . . . . . — 1.9 (62.6) (1.4)Less: Exchange fluctuation on EEFC accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (62.0) (12.8) (0.3)Cash and Cash Equivalents as at March 31 (Closing balance) . . . . . . . . . . . . . . . . . . . . . . 20,973.2* 13,864.4* 11,542.7* 265.5

* Includes Cash Collateral Rs. 4,014.9 Millions (as at March 31, 2006 Rs. 2,948.2 Millions and as at March 31, 2005 Rs. 764.4 Millions)Previous year’s figures have been restated, wherever necessary, to confirm to this years’ classification.

* under column “in US $ Millions” represents amount less than US$50,000/-

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SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNT

SCHEDULE A

Year Ended March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S.$Millions)

SALE OF PRODUCTS AND OTHER INCOME1. Sale of products and other income from operations

(a) Sale of products / Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224,545.9 267,005.6 359,658.3 8,273.7(b) Income from Hire purchase / Loan Contracts (Notes 1 to 4 below) . . . . . . . . . . . . 1,608.5 4,355.7 6,725.5 154.7(c) Miscellaneous income (Note 5 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 892.2 1,276.0 2,171.7 50.0(d) Exchange difference (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1,322.7 30.4

227,046.6 272,637.3 369,878.2 8,508.82. Dividend and other income (Notes 6 to 8 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,339.4 2,435.2 1,531.8 35.2

228,386.0 275,072.5 371,410.0 8,544.0

Year Ended March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S.$Millions)

Notes:(1) Value of Hire purchase contracts entered into during the year :

(i) Purchased vehicles (Note 2 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,301.9 74.6 487.2 11.2(ii) Vehicles from Company’s stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.9 0.7 — —

(2) Value of vehicles purchased and issued on Hire purchase contracts during the year . . . 1,856.6 72.0 411.2 9.5(3) (i) Income from Hire purchase contracts includes net income from lease rentals and

income on securitisation / sale of receivable under Hire purchase contracts . . . . . — 216.7 4.2 0.1(ii) Income from Loan contracts includes income on securitisation / sale of receivables

of Loan contracts (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139.5 761.2 775.0 17.8(4) Income from Loan contracts includes Interest income (net) . . . . . . . . . . . . . . . . . . . . . . 1,017.1 3,083.1 5,483.5 126.1(5) Miscellaneous income include :

(i) Profit on sale of assets (net) [includes Capital Profits of Rs. 82.4 Millions] (2005-06Rs.1.5 Millions, 2004-05 Rs. 23.1 Millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.7 81.5 226.1 5.2

(ii) Insurance claims for loss of profit due to fire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 479.0 11.0(6) Dividend and other income includes :

(i) Income from current investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 467.6 68.2 99.6 2.3(ii) Income from long term investments (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333.3 602.3 983.2 22.6(iii) Tax deducted at source . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.6 9.6 19.3 0.4

(7) Dividend and other income includes:(i) Profit on sale of part interest in a subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364.0 1,541.2 — —(ii) Profit on sale of current investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1 137.6 122.0 2.8(iii) Profit / (loss) on sale of long-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (0.3) 307.4 7.1(iv) Additional consideration received in respect of Trade investment sold in

1999-2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167.4 — — —(8) Dividend and other income include amount received on issue of shares by a

subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 86.20 19.60 0.5

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Page 186: Tata Motors

SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNT

SCHEDULE B

Year Ended March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S.$Millions)

MANUFACTURING AND OTHER EXPENSES1. Purchase of products for sale, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,624.8 13,607.0 19,114.9 439.72. Consumption of raw materials and components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126,267.8 148,979.2 204,611.0 4,706.93. Processing charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,019.7 3,747.2 4,803.2 110.54. Payments to and provision for employees (Note 1 below) . . . . . . . . . . . . . . . . . . . . . . . .

(a) Salaries, wages and bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,176.2 14,311.2 19,480.6 448.1(b) Contribution to provident and other funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,663.5 1,958.9 2,606.9 60.0(c) Workmen and staff welfare expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500.1 1,561.1 2,067.8 47.6

14,339.8 17,831.2 24,155.3 555.75. Expenses for manufacture, administration and selling:

(a) Stores, spare parts and tools consumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,440.2 4,111.3 5,657.3 130.1(b) Freight, transportation, port charges, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,811.9 3,862.4 5,476.5 126.0(c) Repairs to buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258.3 302.1 265.2 6.1(d) Repairs to plant, machinery, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 397.0 478.8 545.8 12.6(e) Power and fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,676.9 2,914.5 3,685.3 84.8(f) Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175.2 294.6 467.6 10.8(g) Rates and taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365.5 410.7 440.4 10.1(h) Provision for Wealth tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7 4.9 6.8 0.2(j) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 278.4 318.3 357.6 8.2(k) Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,918.0 1,935.3 2,577.0 59.3(l) Incentive / Commission to dealers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,448.1 2,392.6 3,250.9 74.8(m) Other expenses ( Note 2 below ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,380.2 11,874.0 18,427.6 423.9

23,155.4 28,899.5 41,158.0 946.96. Excise Duty on Stock-in-trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128.9 330.0 775.0 17.8

7. Change in Stock-in-trade and Work-in-progress:A Opening Stock

(i) Work-in-progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,267.6 3,349.5 3,425.1 78.8(ii) Stock-in-trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,828.1 7,071.8 9,440.7 217.2Add:- Stock acquired on acquisition of Concorde Motors Ltd (now known as Tata

Motors Insurance Services Ltd.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149.1 — — —Add:- Stock acquired on acquisition of INCAT and Tata Technologies Pte.

Singapore Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 58.0 — —B Closing Stock

(i) Work-in-progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,349.5 3,425.1 3,651.0 84.0(ii) Stock-in-trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,071.8 9,440.7 13,327.4 306.6

(2,176.5) (2,386.5) (4,112.6) (94.6)

173,359.9 211,007.6 290,504.8 6,682.9

Year Ended March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S.$Millions)

NOTES :(1) Payments to and provision for employees include:

(i) Provisions for other employee benefit schemes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246.3 193.2 321.1 7.4(ii) Managerial Remuneration for Directors (excluding provision for encashable leave

and gratuity as separate actuarial valuation for Whole-time Directors is notavailable) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54.3 55.5 67.7 1.6

(2) Other expenses include—(i) Loss on assets scrapped / written off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90.5 15.5 52.2 1.2(ii) Repairs to buildings exclude amounts charged to other revenue accounts . . . . . . . . . 51.6 64.1 89.6 2.1(iii) Repairs to plant, machinery, etc exclude amounts charged to other revenue

accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,067.4 1,026.9 1,236.3 28.4(iv) Lease rentals in respect of plant and machinery . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114.3 83.4 29.6 0.7(v) Provision and write off of sundry debtors / advances (net) . . . . . . . . . . . . . . . . . . . . . 195.3 693.8 1,796.0 41.3(vi) Securitisation expenses for Hire purchase / Loan contracts . . . . . . . . . . . . . . . . . . . . 62.7 485.9 635.0 14.6(vii) Exchange differences (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272.8 170.0 — —(viii) Commission and brokerage on sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 295.4 67.1 316.6 7.3(ix) Contribution to Electoral Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.0 — — —(x) Loss on liquidation of subsidiaries (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 30.6 0.7

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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET

SCHEDULE 1

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S.$Millions)

SHARE CAPITALAuthorised:

450,000,000 Ordinary Shares of Rs. 10 each (As at March 31, 2006 410,000,000 and as atMarch 31, 2005 400,000,000 Shares) and . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000.0 4,100.0 4,500.0 103.5

4,000.0 4,100.0 4,500.0 103.5

Issued and subscribed:385,373,885 Ordinary Shares of Rs. 10 each fully paid (As at March 31, 2006 382,834,131 and

as at March 31, 2005 361,751,751 Ordinary Shares) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,617.5 3,828.3 3,853.7 88.7Less: Calls in arrears . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.1 0.1 0.1 *

3,617.4 3,828.2 3,853.6 88.7Share Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.5 0.5 0.5 *

3,617.9 3,828.7 3,854.1 88.7

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Page 188: Tata Motors

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET

SCHEDULE 2

As at April 1, For year ended March 31, As at March 31,

2004 2005 2006 2005 2006 2007 2005 2006 2007 2005 2006 2007 2007

Opening Balance AdditionsDeductions /Adjustments Closing Balance

(in Rs.Millions)

(in Rs.Millions)

(in Rs.Millions)

(in Rs.Millions)

(in U.S. $Millions)

RESERVES AND SURPLUS(a) Securities Premium Account [Note (i) and (ii)] . . . . . . 16,813.4 14,738.9 18,287.0 1,271.0 3,763.8 1,077.9 3,345.5 215.7 0.9 14,738.9 18,287.0 19,364.0 445.5(b) Capital Redemption Reserve [Note (iii)] . . . . . . . . . . . 22.8 22.8 22.8 — 393.5 — — 393.5 — 22.8 22.8 22.8 0.5(c) Capital Reserve (on consolidation) . . . . . . . . . . . . . . . . 3,363.5 3,820.3 4,082.0 456.8 268.1 39.3 — 6.4 9.2 3,820.3 4,082.0 4,112.1 94.5(d) Debenture Redemption Reserve [Note (iii)] . . . . . . . . . 3,388.4 3,341.5 3,343.5 — 203.0 — 46.9 201.0 — 3,341.5 3,343.5 3,343.5 76.9(e) Amalgamation Reserve [Note (iii)] . . . . . . . . . . . . . . . . 0.5 0.5 0.5 — 4.8 — — 4.8 — 0.5 0.5 0.5 *(f) Special Reserve [Note (iii)] . . . . . . . . . . . . . . . . . . . . . . 42.8 58.6 611.1 15.8 552.5 52.6 — — — 58.6 611.1 663.7 15.3(g) Reserve on Research and Human Resource

Development [Note (iv)] . . . . . . . . . . . . . . . . . . . . . . . . — — 56.2 — 56.2 618.2 — — — — 56.2 674.4 15.5(h) Revaluation Reserve [Note (iii)] . . . . . . . . . . . . . . . . . . — — 263.9 — 268.2 — — 4.3 4.4 — 263.9 259.5 6.0(j) General Reserve [Note (iii), (v) to (viii) ] . . . . . . . . . . . 6,518.9 11,716.7 20,490.7 5,207.9 10,386.8 10,502.3 10.1 1,612.8 569.8 11,716.7 20,490.7 30,423.2 699.9(k) Translation Reserve [Note (ix)] . . . . . . . . . . . . . . . . . . 3.4 309.1 487.3 307.2 179.5 347.0 1.5 1.3 — 309.1 487.3 834.3 19.2

30,153.7 34,008.4 47,645.0 7,258.7 16,076.4 12,637.3 3,404.0 2,439.8 584.3 34,008.4 47,645.0 59,698.0 1,373.3

(l) Profit and Loss Account . . . . . . . . . . . . . . . . . . . . . . . . . 6,345.3 9,841.0 13,664.6 314.3

40,353.7 57,486.0 73,362.6 1,687.6

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Page 189: Tata Motors

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET

SCHEDULE 2 (contd.)

Notes:2004-05 2005-06 2006-07

Additions Deductions Additions Deductions Additions Deductions

Rs. In Millions(i) Securities Premium Account opening and closing balances are net of calls in arrears Rs 0.3 Million(ii) Changes in Securities Premium Account

(a) Premium paid on early redemption of certain Non-Convertible Debentures . . . . . . . . . . . . . . . . . . . . . . . . . — 118.6 — — — —(b) Premium on shares issued on conversion of Foreign Currency Convertible Notes (FCCN) and on shares

issued which were held in abeyance out of Rights Issue of shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,271.0 — 3,648.2 — 938.4 —(c) Consequent to amalgamation of Telco Dadajee Dhackjee Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 115.6 115.6 — —(d) FCCN issue expenses (net of tax) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 306.2 — 50.4 — —(e) Provision for premium on redemption of FCCN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2,920.7 — — — —(f) Exchange difference on Provision for premium on redemption of FCCN [ including credit for reversal

upon conversion of FCCN Rs. 69.5 Millions (2005-06 net of credit for reversal of Rs.12.7 Millions,2004-05 Rs. Nil)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 46.0 139.5 —

(g) Stamp Duty charges on conversion of FCCN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 3.7 — 0.9

1,271.0 3,345.5 3,763.8 215.7 1,077.9 0.9

(iii) Changes consequent to amalgamations in 2005-06(a) Capital Redemption Reserve on account of amalgamation of Tata Finance Ltd. . . . . . . . . . . . . . . . . . . . . . — — 393.5 393.5 — —(b) Debenture Redemption Reserve on account of amalgamation of Tata Finance Ltd. . . . . . . . . . . . . . . . . . . — — 203.0 201.0 — —(c) Amalgamation Reserve on account of amalgamation of Tata Finance Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . — — 4.8 4.8 — —(d) Special Reserve on account of amalgamation of Tata Finance Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 537.8 — — —(e) Revaluation Reserve on account of amalgamations of:

(i) Telco Dadajee Dhackjee Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 268.2 — — —(ii) Depreciation on revalued portion of assets taken over on amalgamation of Telco Dadajee Dhackjee

Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 4.3 — 4.4

— — 268.2 4.3 — 4.4

(f) General Reserve on account of amalgamation of:(i) Tata Finance Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1,853.0 1,252.2 — —(ii) Telco Dadajee Dhackjee Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 7.3 330.5 — —(iii) Suryodaya Capital and Finance (Bombay) Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 7.7 — —

— — 1,860.3 1,590.4 — —

(iv) Includes translation on opening balance Rs. 9.9 Million (2005-06 Rs. Nil and 2004-05 Rs. Nil)(v) Adjustment in General Reserves towards difference in opening liability as per revised AS15 (net of tax)

(a) In respect of the Company and its subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — 185.4 565.2(b) Share of minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — 4.6(c) Our share of adjustment in an associate company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — 0.6 —

(vi) During the year 2006-07, Rs. Nil (2005-06 Rs. 842.8 Millions and 2004-05 Rs. Nil) has been added to General Reserve for associate adjustment on account of merger of Tata Finance Ltdand Rs. Nil (2005-06 Rs. 22.4 Millions and 2004-05 Rs. Nil) has been deducted to reduce the Goodwill of Concorde Motors Ltd. (now known as Tata Motors Insurance Services Ltd.)

(vii) The merger of Concorde Motors Limited (CML) (now known as Tata Motors Insurance Services Limited) sales and service division with Concorde Motors (India) Ltd. (CMIL) as per theapproved scheme has resulted in crediting General reserve by Rs. Nil (2005-06 Rs. Nil and 2004-05 Rs. 46.3 Millions) (fair value of the assets taken being in excess of the considerationpaid) and debiting General reserve by Rs. Nil (2005-06 Rs. Nil and 2004-05 Rs. 10.1 Millions) on account of dividend for pre-acquisition period paid by CMIL to the shareholders of CML.

(viii)Includes excess of assets over liabilities of Rs. Nil (as at March 31, 2006 Rs. Nil and as at March 31, 2005 Rs. 4.8 Million) on merger of spare parts division of Concorde Motors Limited(now known as Tata Motors Insurance Services Limited).

(ix) During the year 2006-07, Rs. 347.0 Millions (2005-06 Rs.179.5 Millions and 2004-05 Rs. 307.2 Millions) has been added to Translation Reserve on translation of foreign subsidiaries andminorities share thereof and foreign associates. Further Rs. Nil (2005-06 Rs. 1.3 Million and 2004-05 Rs. 1.5 Million) has been deducted in respect of translation in case of foreignassociates.

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Page 190: Tata Motors

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET

SCHEDULE 3

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

LOANS—Secured(a) Non—Convertible Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 825.0 755.0 755.0 17.4(b) Loans from Financial Institutions / Banks # . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 428.7 261.0 15,250.0 350.8(c) Sales Tax Deferment Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,106.1 869.8 732.8 16.9(d) From Banks:

(i) Buyers line of credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 4,312.6 99.2(ii) Loans and Cash Credit / Overdraft Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900.8 6,480.6 23,516.0 540.8

(e) Foreign Currency Loans from Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,275.5 269.2 — —(f) Loans from Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230.9 180.6 60.1 1.4

5,767.0 8,816.2 44,626.5 1,026.5

__________# Including payable in respect of finance lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.0 3.4 3.8 0.1

SCHEDULE 4

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

LOANS—Unsecured(a) Short Term Loans—From Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 204.8 5,096.8 117.2(b) Commercial Paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1,400.0 32.2(c) Inter Corporate Deposit / Call Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 42.5 42.5 1.0(d) Short Term Loans—From others in foreign currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.9 — — —(e) Foreign Currency Convertible Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,962.0 19,046.2 17,646.9 406.0(f) Long Term Loans in foreign currency—Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,092.4 2,098.1 2,028.3 46.7(g) Loan from Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7 3.6 — —(h) Long Term Loans in foreign currency—Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,311.0 3,580.0 2,178.0 50.1

21,375.0 24,975.2 28,392.5 653.2

F-59

Page 191: Tata Motors

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET

SCHEDULE 5

Cost as atMarch 31,

AccumulatedDepreciation

up to March 31,[Note (v)]

Net Book valueas at March 31,

2005 2006 2007 2005 2006 2007 2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

FIXED ASSETS(a) Land . . . . . . . . . . . . . . . . . . . . . . . . . . 1,013.5 1,120.7 1,587.1 — — — 1,013.5 1,120.7 1,587.1 36.5(b) Buildings [Note (i), (ii)(a) and

(iii)] . . . . . . . . . . . . . . . . . . . . . . . . . . 10,669.3 11,702.6 12,391.7 2,393.4 2,689.5 3,019.7 8,275.9 9,013.1 9,372.0 215.6(c) Leasehold Land [Note (ii)(b)] . . . . . . 445.2 444.2 779.5 38.4 42.7 47.2 406.8 401.5 732.3 16.8(d) Railway Sidings . . . . . . . . . . . . . . . . . 1.3 — — 1.3 — — — — — —(e) Plant, Machinery, Equipment, etc.

[Note (ii)(a) and (iii)] . . . . . . . . . . . . . 59,892.3 67,722.8 76,172.1 32,699.4 37,824.6 42,446.7 27,192.9 29,898.2 33,725.4 776.1(f) Water System and Sanitation [Note

(ii)(a)] . . . . . . . . . . . . . . . . . . . . . . . . . 426.3 452.9 555.4 195.8 213.8 233.7 230.5 239.1 321.7 7.4(g) Furniture, Fixtures and Office

Appliances [Note (iii)] . . . . . . . . . . . . 529.3 922.9 1,020.5 265.8 468.0 501.5 263.5 454.9 519.0 11.9(h) Technical Know-how fees . . . . . . . . . 383.7 383.7 385.3 370.7 383.7 383.8 13.0 — 1.5 *(j) Vehicles and Transport [Note (ii)(a)

and (iii)] . . . . . . . . . . . . . . . . . . . . . . . 973.9 1,150.5 1,248.6 586.5 685.4 711.3 387.4 465.1 537.3 12.4(k) Leased Assets

(i) Plant Taken on lease [ Note(vii)] . . . . . . . . . . . . . . . . . . . . . . 1,887.3 1,885.7 1,507.6 729.3 885.0 893.0 1,158.0 1,000.7 614.6 14.1

(ii) Leased Premises / Assets . . . . . . 313.1 314.1 350.0 1.8 56.6 14.2 311.3 257.5 335.8 7.7(iii) Assets Given on Lease . . . . . . . . 75.5 4,560.9 4,464.6 70.3 4,247.0 4,224.6 5.2 313.9 240.0 5.5

(l) Product Development Cost . . . . . . . . 796.6 1,259.1 1,564.7 222.0 573.5 1,088.9 574.6 685.6 475.8 10.9(m) Software . . . . . . . . . . . . . . . . . . . . . . . 599.0 1,129.9 1,564.7 18.6 365.8 701.9 580.4 764.1 862.8 19.8

GRAND TOTAL . . . . . . . . . . . . . . . . 78,006.3 93,050.0 103,591.8 37,593.3 48,435.6 54,266.5 40,413.0 44,614.4 49,325.3 1,134.7

(n) Capital Work-in- Progress [Note(iv) and (vi)] . . . . . . . . . . . . . . . . . . . . 5,409.9 9,744.9 25,816.5 593.9

45,822.9 54,359.3 75,141.8 1,728.6

Notes:(i) Buildings include Rs. 8,631 (as at March 31, 2006 Rs. 8,881 and as at March 31, 2005 Rs. 10,631) being value of investments in shares

of Co-operative Housing Societies.(ii) (a) Buildings, Water System and Sanitation, Plant and Machinery and Vehicles and Transport include Gross block Rs 47.6 Millions,

Rs.15.0 Millions, Rs. 37.6 Millions,and Rs 2.3 Millions (as at March 31, 2006 Rs. 49.1 Millions, Rs. 15.0 Millions, Rs. 37.6 Millions andRs. 2.3 Millions and as at March 31, 2005 Rs. 49.1 Millions, Rs. 15.0 Millions, Rs. 35.5 Millions and Rs. 2.3 Millions) and Net blockRs. 0.8 Million, Rs. 0.8 Million, Rs 3.5 Millions and Rs 0.3 Million (as at March 31, 2006 Rs. 1.4 Millions, Rs. 0.8 Million, Rs. 4.1Millions and Rs. 0.7 Million and as at March 31, 2005 Rs. 3.6 Millions, Rs. 0.8 Million, Rs. 7.3 Millions and Rs. 1.2 Millions)respectively in respect of expenditure incurred on capital assets, ownership of which does not vest in the Company.(b) The registration of Leasehold Land acquired during the year 2006-07 is in process.

(iii) Includes Building, Plant & Machinery and Equipment, Furniture, Fixtures and Office Appliances and Vehicles and Transport havingGross block of Rs.Nil, Rs 1,577.9 Millions, Rs 4.6 Millions, Rs 14.8 Millions (as at March 31, 2006 Rs 0.2 Million, Rs. 522.7 Millions,Rs 3.9 Millions ,Rs. 4.4 Millions and as at March 31, 2005 Rs. Nil, Rs. 479.7 Millions, Rs. 0.2 Millions, Rs. 0.9 Millions), and net blockof Rs. Nil, Rs.91.2 Millions, Rs.0.1 Million and Rs.1.0 Million (as at March 31, 2006 Rs. Nil, Rs. 22.5 Millions, Rs. Nil, Rs. 0.2 Millionand as at March 31, 2005 Rs. Nil, Rs. 28.9 Millions, Rs, Nil, Rs. Nil) respectively, held for disposal.

(iv) Cost and capital work-in-progress includes:(a) exchange differences and net premium on derivative contracts, net gain of Rs. 170.8 Millions (as at March 31,2006 Rs 24.6 Millions

and as at March 31, 2005 Rs. Nil).(b) Rs. 6,546.5 Millions , including assets given on lease prior to April 1, 2001, taken over on merger of Tata Finance Ltd (TFL) with

effect from April 1, 2005.(c) Rs. 475.4 Millions taken over by Tata Technologies Limited ( TTL) on acquisition of Incat International Plc (INCAT) and Tata

technologies Pte. Ltd, Singapore (TTPL) with effect from October 3, 2005 and December 7, 2005, respectively.(v) Accumulated Depreciation includes:

(a) an adjustment of Rs.1019.1 Millions (as at March 31, 2006 Rs.767.0 Millions and as at March 31, 2005 Rs. 202.7 Millions) onAssets transferred/sold/discarded during the year 2006-07.

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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET

SCHEDULE 5 (contd.)

(b) lease equalisation of Rs. 37.8 Millions (as at March 31, 2006 Rs.15.4 Millions and as at March 31, 2005 Rs. Nil) adjusted in leaserental income.

(c) depreciation of Rs. 4.4 Millions (as at March 31, 2006 Rs 4.3 Millions and as at March 31, 2005 Rs. Nil) on revalued portion ofgross block of TDDL transferred to Revaluation Reserve.

(d) Translation Adjustment for foreign subsidiaries of Rs. 6.8 Millions (as at March 31, 2006 Rs. 66.9 Millions and as at March 31,2005 Rs. 47.6 Millions)

(e) Rs. 4,749.7 Millions (including lease terminal adjustment of Rs.1,616.3 Millions taken over on amalgamation of TFL with effectfrom April 1, 2005.)

(f) Rs. 378.9 Millions taken over by TTL on acquisition of INCAT International Plc and Tata Technologies Pte Ltd. with effect fromOctober 3, 2005 and December 7, 2005 respectively.

(g) includes amortization, diminution in value of assets and write down of assets net of reversals.(h) includes loss of Rs. 121.3 Millions (2005-06 Rs. 54.0 Millions and 2004-05 Rs. 195.4 Millions ) on assets held for disposal and is

net of credit on reversal of write down Rs. Nil ( 2005-06 Rs. 70.6 Millions and 2004-05 Rs. 80.8 Millions)(vi) Capital Work in Progress includes :

(a) Product Development Cost Rs. 4,219.9 Millions (as at March 31, 2006 Rs 1,735.1 Millions and as at March 31, 2005 Rs. 869.1Millions) and Technical Know-how fees for Product development projects Rs. 4,864.0 Millions (as at March 31, 2006 Rs. 2076.0Millions and as at March 31, 2005 Rs. 844.7 Millions)

(b) Advances for capital expenditure of Rs. 4,354.6 Millions (as at March 31, 2006 Rs 1,030.0 Millions and as at March 31, 2005Rs. 633.1 Millions)

(c) exchange differences and net premium on derivative contracts, net gain of Rs. 54.0 Millions (as at March 31, 2006 net loss ofRs. 13.1 Millions and as at March 31, 2005 Rs. Nil)

(vii) The assets are under renewable secondary lease.

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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET

INVESTMENTS (at cost)

SCHEDULE 6

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

(A) In Associatesa) Carrying cost of Investments in Associates (Note 6) [Including Rs. 29.4 Millions, (2005-06 Rs.29.4

Millions and 2004-05 Rs.23.4 Millions) of Goodwill and net of Rs. 25.5 Millions, (2005-06 Rs. 35.1Millions and 2004-05 Rs. 4.3 Millions) of Capital Reserve arising on acquisition of associates] . . . . . 2,124.1 2,478.3 2,538.7 58.4

b) Fully paid Cumulative Convertible Preference Shares (Unquoted) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210.0 210.0 210.0 4.8(B) Others(I) Long Term Investments

Quoteda) Fully paid Ordinary/Equity shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,189.4 2,453.6 2,630.3 60.5b) Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7 6.1 — —c) Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,546.3 1,496.1 1,442.9 33.2

Unquoteda) Fully paid Ordinary/Equity shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,262.1 2,579.4 2,604.2 59.8b) Fully paid Cumulative Redeemable Preference Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,710.0 173.8 150.0 3.5c) Non Cumulative Redeemable Preference Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 5.0 20.0 0.5d) Non Convertible Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.0 35.0 76.4 1.8e) Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.0 61.6 61.6 1.4f) Retained interest in securitisation transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687.0 482.5 769.1 17.7(II) Current Investments

Quoteda) Fully paid Ordinary/Equity shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 135.6 9.3 0.2b) Government Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 18.2 7.9 0.2

Unquoteda) Fully paid Cumulative Redeemable Preference Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 30.0 30.0 0.7b) Mutual Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,473.7 2,568.4 1,327.8 30.5

21,310.3 12,733.6 11,878.2 273.2Less: Provision for diminution in value of Investments (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46.7 118.6 132.3 3.0

21,263.6 12,615.0 11,745.9 270.2

Notes:

(1) Book value of quoted investments (other than in associates) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,741.4 4,078.3 4,048.4 93.1(2) Book value of unquoted investments (other than in associates) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,188.1 5,848.4 4,948.8 113.8(3) Market value of quoted investments (other than in associates) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,835.9 18,636.2 17,261.1 397.1(4) The Company has given an undertaking to Citibank NA, for non-disposal of its shareholding in Tata Precision Industries Pte. Ltd (TPI),

Singapore against loans and other facilities extended by the Bank to TPI and Tata Engineering Services Pte. Ltd (TES), Singapore, a whollyowned subsidiary of TPI, aggregating Singapore $ 3 million and Singapore $ 10.85 million respectively.

(5) The Company acquired 21% shares in Hispano Carrocera, S.A. on March 16, 2005. As per the terms of agreement, the Company has given anunsecured loan of Euro 7 million ((March 31, 2007) Rs. 405.2 Millions) and the Company has an Option to acquire the remaining 79% of theshares through one or more transfers, as per terms and conditions duly agreed upon at a price not exceeding Euro 2 million. The Company hasalso given a letter of comfort to Standard Chartered Bank and Citi Bank against working capital loans extended by both bank to Hispanoaggregating Euro 7 million each. The Company has also given an undertaking to Standard Chartered Bank and Citi Bank for non-disposal of itsshareholding in Hispano during the tenure of the loan.

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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET

SCHEDULE 6 (Contd.)

(6) The particulars of investments in associate companies are as follows:

Sr.No. Name of the Associate

Country ofIncorporation For the year

OwnershipInterest

(%)

OriginalCost of

Investment(+)

Amount ofGoodwill /(Capital

Reserve) inOriginal Cost

Share of postacquisition

Reserves andSurplus

CarryingCost of

Investments

CarryingCost of

Investments

(in Rs. Millions) (in US $Millions)

1) Tata Cummins Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India 2006-072005-062004-05

50.0050.0050.00

900.0900.0900.0

———

579.8383.5186.2

1,479.81,283.51,086.2

34.0

2) Tata AutoComp Systems Ltd . . . . . . . . . . . . . . . . . . . . . . . . . India 2006-072005-062004-05

50.0050.0050.00

986.7986.7986.7

———

(2.7)102.822.8

984.01,089.51,009.5

22.7

3) NITA Company Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bangladesh 2006-072005-062004-05

40.0040.0040.00

12.712.712.7

(4.3)(4.3)(4.3)

(2.4)5.2—

10.317.912.7

0.2

4) Tata Precision Industries Pte. Ltd. . . . . . . . . . . . . . . . . . . . . . Singapore 2006-072005-062004-05 @

49.9949.9949.99

31.131.131.1

———

(31.1) !(31.1) !(31.1) !

———

5) Hispano Carrocera S. A.** . . . . . . . . . . . . . . . . . . . . . . . . . . Spain 2006-072005-062004-05

21.0021.0021.00

23.423.423.4

23.423.423.4

(23.4) !(23.4) !(7.7)

——

15.7

6) TSR Darashaw Ltd. (formerly known as Tata ShareRegistry Ltd.)*# . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

India 2006-072005-062004-05

26.0048.55

16.831.4

(11.1)(20.7)

11.86.1—

28.637.5

0.7

7) Tata Securities Pvt. Ltd. # . . . . . . . . . . . . . . . . . . . . . . . . . . . India 2006-072005-062004-05

29.3429.34

1.31.3—

(10.1)(10.1)

28.320.4

29.621.7

0.7

8) Telcon Ecoroad Resurfaces Pvt. Ltd. ^ . . . . . . . . . . . . . . . . . India 2006-072005-062004-05

21.6021.60

36.036.0

6.06.0—

(29.6)(7.8)

6.428.2

0.1

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-072005-062004-05

2,008.02,022.61,953.9

3.9(5.7)19.1

530.7455.7170.2

2,538.72,478.32,124.1

58.4

! Share of loss restricted to the original cost of Investment as per the equity method of accounting for associates under AS -23 ‘Accountingfor Investments in Associates in Consolidated Financial Statements’

@ Financial statements considered for the year ended December 31, 2004.** The company became an associate from March 16, 2005.+ Original cost of investment is net of permanent diminution in the value of investment.^ Associate of Telco Construction Equipment Company Limited (Telcon) one of our subsidiaries, from June 21, 2005.# Pursuant to merger of Tata Finance Limited with the Company these Companies became associates from April 1, 2005.* During the year 2006-07, the company has diluted its stake in the associate.

During the year 2004-05, Concorde Motors Ltd. (now known as Tata Motors Insurance Services Ltd.) was an associate upto October 20,2004 and Tata International Ltd was an associate upto February 28, 2005.

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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET

SCHEDULE 7

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S.$Millions)

INVENTORIES(a) Stores and spare parts (at or below cost) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,555.8 1,518.1 1,582.5 36.4(b) Consumable tools (at cost) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222.4 227.8 265.9 6.1(c) Raw materials and components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,754.8 9,098.0 11,177.6 257.1(d) Work-in-progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,349.5 3,425.1 3,651.0 84.0(e) Stock-in-trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,071.8 9,440.7 13,327.4 306.6(f) Goods-in-transit (at cost) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 666.1 1,100.7 1,664.6 38.3

20,620.4 24,810.4 31,669.0 728.5

Note: Items (c), (d) and (e) above are valued at lower of cost and net realisable value.

SCHEDULE 8

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S.$Millions)

SUNDRY DEBTORS(a) Over six months : (unsecured) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,068.2 1,138.1 1,667.8 38.4(b) Others : (unsecured) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,113.5 12,283.6 15,454.2 355.6

10,181.7 13,421.7 17,122.0 394.0Less: Provision for doubtful debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 704.8 503.4 564.0 13.0

9,476.9 12,918.3 16,558.0 381.0(c) Future instalments receivable from hirers / lessees [secured under hire purchase / lease

agreements and by promissory notes from hirers] [Note A(7), Schedule 14] . . . . . . . . . . . . . 3,318.1 874.9 623.3 14.3Less: Provision for doubtful instalments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.5 218.0 112.4 2.6Less: Unearned finance and service charges on lease receivables / hire purchasecontracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333.5 30.4 46.7 1.1

2,937.1 626.5 464.2 10.6

12,414.0 13,544.8 17,022.2 391.6

SCHEDULE 9

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S.$Millions)

CASH AND BANK BALANCES(a) Cash on hand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.5 75.8 60.9 1.4(b) Current accounts with Scheduled Banks # . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,678.5 3,713.2 6,513.3 149.8(c) Current accounts with other than Scheduled Banks # . . . . . . . . . . . . . . . . . . . . . . . . . . . . 462.5 1,049.5 423.4 9.7(d) Short term deposits with Banks * . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,047.3 6,077.7 530.2 12.2(e) Margin Money / Cash Collateral with Scheduled Banks . . . . . . . . . . . . . . . . . . . . . . . . . . 764.4 2,948.2 4,014.9 92.4

20,973.2 13,864.4 11,542.7 265.5

# Includes cheques on hand Rs 1597.5 Millions (as at March 31, 2006 Rs. 1310.2 Millions and as at March 31, 2005 Rs. 1206.9 Millions)and remittances in transit Rs. 2505.7 Millions (as at March 31, 2006 Rs. 1132.7 Millions and as at March 31, 2005 Rs. 1200.6 Millions)

* Short term deposits with Bank includes Restricted deposits of Rs. 46.4 Millions (as at March 31, 2006 Rs. 67.7 Millions and as atMarch 31, 2005 Rs. 78.07 Millions) and with other than scheduled banks for foreign subsidiaries Rs. 41.2 Millions (as at March 31, 2006Rs. 768.9 Millions and as at March 31, 2005 Rs. 99.7 Millions)

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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET

SCHEDULE 10As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

LOANS AND ADVANCESA) SECURED

Vehicle loans (Note 1 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,199.5 45,763.1 80,968.5 1,862.6Less: Provision for doubtful loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268.3 1,107.6 1,697.0 39.0

Total vehicle loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,931.2 44,655.5 79,271.5 1,823.6Other secured loans (Note 2 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 146.8 3.4

Total (A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,931.2 44,655.5 79,418.3 1,827.0

B) UNSECURED—considered good(a) Advances to suppliers, contractors and others (See Notes 3 and 4 below) . . . . . . . . . . . . . . 3,522.4 5,854.1 9,628.7 221.5(b) Loan to associate and others (Note 5 below). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,096.6 444.5 405.2 9.3(c) Deposits with government, public bodies and others [Note 6 below] . . . . . . . . . . . . . . . . . . 1,918.2 3,834.0 4,481.1 103.1(d) Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305.5 617.5 1,247.3 28.7(e) Advance payment against taxes (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 698.8 2,878.4 2,571.9 59.2(f) Other unsecured loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 75.8 1.7

Total (B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,541.5 13,628.5 18,410.0 423.5

Total (A) and (B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,472.7 58,284.0 97,828.3 2,250.5

Notes:(1) Loans are secured against hypothecation of vehicles(2) Other loans are secured by mortgage of property and lien on shares; security yet to be

created(3) Advances to suppliers, contractors and others are net of advances considered doubtful

which have been provided for . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315.1 994.8 905.9 20.8(4) Includes amount due from customers in respect of contract works. . . . . . . . . . . . . . . . . . . . 115.9 160.9 165.4 3.8(5) Loan to associates and others:

(i) Hispano Carocerra S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396.6 377.7 405.2 9.3(ii) Tata Finance Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,700.0 — — —(iii) Tata Engineering Services Singapore Pte. Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 66.8 — —

(6) Deposits with government, public bodies and others are net of deposits considereddoubtful which have been provided for. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 85.3 83.0 1.9

SCHEDULE 11

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

CURRENT LIABILITIES(a) Acceptances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,939.4 29,502.3 24,461.1 562.7(b) Sundry creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,845.7 30,602.1 44,069.0 1,013.8(c) Advance and progress payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,911.3 4,023.2 3,435.0 79.0(d) Amount due to a customer in respect of contract work. . . . . . . . . . . . . . . . . . . . . . . . . . . — 2.1 6.7 0.2(e) Interest / commitment charges accrued on Loans but not due . . . . . . . . . . . . . . . . . . . . . . 196.4 193.6 268.9 6.1(f) Liability towards Investors Education and Protection Fund under Section 205C of the

Companies Act, 1956 not due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65.9 113.3 108.9 2.5

57,958.7 64,436.6 72,349.6 1,664.3

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SCHEDULE 12

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

PROVISIONS(a) Proposed dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,521.9 4,979.4 5,780.7 133.0(b) Provision for tax on dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 697.3 785.5 1,084.2 24.9(c) Provision for retirement and other employee benefit schemes [Note B (2),

Schedule 14] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,315.2 2,913.2 4,436.0 102.0(d) Other provisions [Note B (4) Schedule 14] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,918.6 5,076.0 5,003.5 115.1

12,453.0 13,754.1 16,304.4 375.0

SCHEDULE 13

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

MISCELLANEOUS EXPENDITURE(to the extent not written off or adjusted)

(a) Employee Separation Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216.1 138.4 96.8 2.2(b) Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.8 0.7 22.5 0.5

216.9 139.1 119.3 2.7

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TATA MOTORS LIMITED

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEETAND PROFIT AND LOSS ACCOUNT

BASIS OF CONSOLIDATION AND SIGNIFICANT ACCOUNTING POLICIES

1 Basis of Consolidation:

The consolidated financial statements relate to Tata Motors Limited (the Company), its subsidiarycompanies and associates. The Company and its subsidiaries constitute the Group.

a) Basis of Accounting:

I. The financial statements of the subsidiary companies used in the consolidation are drawn upto the samereporting date as of the Company i.e. year ended March 31, 2007.

II. The financial statements of the Group have been prepared in accordance with the AccountingStandards issued by the Institute of Chartered Accountants of India, and other generally acceptedaccounting principles.

b) Principles of consolidation:

The consolidated financial statements have been prepared on the following basis:

I. The financial statements of the Company and its subsidiary companies have been combined on aline-by-line basis by adding together like items of assets, liabilities, income and expenses. The intra-group balances and intra-group transactions and unrealised profits or losses have been fully eliminated.

II. The consolidated financial statements include the share of profit / loss of the associate companieswhich has been accounted as per the ‘Equity method’, and accordingly, the share of profit / loss of eachof the associate companies (the loss being restricted to the cost of investment) has been added to /deducted from the cost of investments.

An Associate is an enterprise in which the investor has significant influence and which is neither aSubsidiary nor a Joint Venture of the investor.

III. The excess of cost to the Company of its investments in the subsidiary companies over its share ofequity of the subsidiary companies, at the dates on which the investments in the subsidiary companiesare made, is recognised as ‘Goodwill’ being an asset in the consolidated financial statements.Alternatively, where the share of equity in the subsidiary companies as on the date of investment is inexcess of cost of investment of the Company, it is recognised as ‘Capital Reserve’ and shown under thehead ‘Reserves and Surplus’, in the consolidated financial statements.

IV. Minority interest in the net assets of consolidated subsidiaries consists of the amount of equityattributable to the minority shareholders at the dates on which investments are made by the Companyin the subsidiary companies and further movements in their share in the equity, subsequent to the datesof investments as stated above.

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BASIS OF CONSOLIDATION AND SIGNIFICANT ACCOUNTING POLICIES (Contd.)

c) The following subsidiary companies are considered in the consolidated financial statements:

SrNo. Name of the Subsidiary Company

Country ofincorporation

% of holding eitherdirectly or through

subsidiary as atMarch 31,

Direct Subsidiaries 2007 2006 20051 Tata Daewoo Commercial Vehicle Co. Ltd. South Korea 100 100 1002 Telco Construction Equipment Company Ltd. India 60 60 803 HV Axles Ltd. India 100 100 1004 HV Transmissions Ltd. India 100 100 1005 TAL Manufacturing Solutions Ltd. India 100 100 1006 Sheba Properties Ltd. India 100 100 1007 Concorde Motors (India) Ltd. India 100 100 1008 Tata Motors Insurance Services Ltd. (formerly known as Concorde Motors Ltd.) India 100 100 1009 Tata Motors European Technical Centre Plc. (w.e.f. September 1, 2005) UK 100 100 -10 Tata Technologies Ltd. India 84.76 86.91 94.6011 TML Financial Services Ltd. (w.e.f. June 1, 2006) India 100 — —12 Tata Marcopolo Motors Ltd. (w.e.f. September 20, 2006) India 51 — —13 Tata Motors (Thailand) Ltd. (w.e.f. February 28, 2007) Thailand 70 — —14 Suryodaya Capital and Finance (Bombay) Ltd. (Merged with the Company w.e.f. April 1,

2005) India — — 10015 Telco Dadajee Dhackjee Ltd. (Merged with the Company w.e.f. April 1, 2005) India — — 100

Indirect Subsidiaries16 INCAT (Thailand), Limited.[formerly known as Tata Technologies (Thailand),Ltd] (w.e.f.

October 10, 2005) Thailand 84.76 86.91 —17 Tata Technologies Pte. Limited Singapore [Note (i)] Singapore 84.76 86.91 —18 INCAT International PLC. [Note (ii)] UK 84.76 86.91 —19 INCAT Limited. [Note (ii)] UK 84.76 86.91 —20 INCAT SAS. [Note (ii)] France 84.76 86.91 —21 INCAT GmbH. [Note (ii)] Germany 84.76 86.91 —22 Cedis Mechanical Engineering GmbH. (w.e.f January 1, 2006) Germany 84.76 86.91 —23 INCAT Holdings B.V. [Note (ii)] Netherlands 84.76 86.91 —24 Lemmerpoort B.V. (formerly known as INCAT Engineering Solutions B.V.) [Note (iii)] Netherlands 84.76 86.91 —25 INCAT K.K. [Note (ii)] Japan 84.76 86.91 —26 Tata Technologies iKS Inc.(formerly known as iKnowledge Solutions Inc.) [Note (ii)] USA 84.76 86.91 —27 CADPO Asia Pte. Ltd. [Note (ii) and (iii)] Singapore 84.76 86.91 —28 Tata Technologies Sdn Bhd, Malaysia [Note (i)] Malaysia 84.76 86.91 —29 Tata Technologies, U.S.A. [Note (iv)] USA — 87.01 94.6030 INCAT Holdings Inc.[Note (ii) and (iv)] USA — 87.01 —31 INCAT Systems Inc.[Note (ii)] USA 84.88 87.01 —32 INCAT Financial Services Inc. [Note (ii) and (iv)] USA — 87.01 —33 Integrated Systems Technologies de Mexico, S.A. de C.V. [Note (ii)] Mexico 84.88 87.01 —34 INCAT Solutions of Canada Inc.[Note (ii)] Canada 84.88 87.01 —35 Tata Technologies Investments Pte.Ltd, Singapore (Subsidiary holding 55%) [Note (i) and

(iii)] Singapore 46.62 47.80 —

(i) w.e.f. December 7 2005(ii) w.e.f. October 3, 2005(iii) These companies are under liquidation and hence the control doesn’t exist with the holding company now. Consequently, these

companies have not been consolidated.(iv) w.e.f April 1, 2006 merged with INCAT Systems Inc.

2. Significant Accounting Policies:

a) Revenue Recognition

The Company recognizes revenues on the sale of products when the products are delivered to the dealer /customer or when delivered to the carrier for exports sales, which is when risks and rewards of ownership pass tothe dealer / customer.

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BASIS OF CONSOLIDATION AND SIGNIFICANT ACCOUNTING POLICIES (Contd.)

Sales are inclusive of income from services, excise duty, export incentive and exchange fluctuations onexport receivables and are net of trade discount.

Revenue from software consultancy on time and materials contracts is recognised based on certification oftime sheet and billed to clients as per the terms of specific contracts. On fixed price contracts, revenue isrecognised based on milestone achieved as specified in the contracts on the proportionate completion method onthe basis of the work completed. Revenue from rendering annual maintenance services is recognisedproportionately over the period in which services are rendered. Revenue from the SAP end user licenses isrecognised on transfer of user licenses.

Revenue from fixed price construction contracts is recognised on the percentage of completion method,measured by reference to the quantum of work carried out. Revenue in respect of contracts in progress at theyear-end is recognised at cost plus attributable profits, where applicable, and included under “Sale of Productsand Services”, in the Profit and Loss Account. Provision for foreseeable loss on contracts in progress is madefully.

b) Depreciation

i) Depreciation is provided on straight line method basis (SLM) over the estimated useful lives of the assetsexcept for assets acquired before April 1, 1975, which are depreciated on a written down value basis. Estimateduseful lives of assets are as follows:

Type of Asset Estimated useful life (years)

Factory Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 to 40Plant and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 to 20Computers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 to 6Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 to 10Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 to 20Technical know-how . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 to 10

Capital assets, the ownership of which does not vest with the Company, other than leased assets, aredepreciated over the estimated period of their utility or five years, whichever is less.

Software in excess of Rs. 25,000 is amortised over a period of sixty months or on the basis of estimateduseful life whichever is lower.

ii) Assets given on lease as on March 31, 2000 acquired upon merger with Tata Finance Limited aredepreciated at rates specified in Schedule XIV to the Companies Act, 1956. The differences between thedepreciation charge as computed using the Internal Rate of Return (IRR) implicit in the lease, to ensure capitalrecovery over the primary lease period, and the charge as disclosed for the year, is reflected in the leaseequalization account.

iii) In respect of assets whose useful life has been revised, the unamortised depreciable amount has beencharged over the revised remaining useful life.

c) Fixed Assets

i) Fixed Assets (except for building acquired on amalgamation with Telco Dadajee Dhackjee Limited whichis at revalued figure) are stated at cost of acquisition or construction less accumulated depreciation / amortisation.

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BASIS OF CONSOLIDATION AND SIGNIFICANT ACCOUNTING POLICIES (Contd.)

All costs relating to the acquisition and installation of Fixed Assets are capitalised and include financing costsrelating to borrowed funds attributable to construction or acquisition of Fixed Assets, upto the date the asset isready for intended use, adjusted for charges on foreign exchange contracts and exchange rate differences relatingto specific borrowings, where applicable, attributable to those fixed assets.

ii) Product development cost incurred on new vehicle platforms, variants on existing platforms and newvehicle aggregates are recognised as Intangible Assets (included under Fixed Assets) and amortised over a periodof thirty six months to sixty months or on the basis of actual production to planned production volumes for thirtysix months from the commencement of commercial production.

iii) Software not exceeding Rs. 25,000 and product development costs relating to minor productenhancement, facelifts and upgrades cost are charged off to Profit and Loss Account as and when incurred.

d) Leases

Assets acquired under finance leases are recognised at the lower of the fair value of the leased assets atinception and the present value of minimum lease payments. Lease payments are apportioned between thefinance charge and the outstanding liability. The finance charge is allocated to periods during the lease term at aconstant periodic rate of interest on the remaining balance of the liability. Assets given under finance leasesexcept for those stated in (b) (ii) above, are recognised as receivables at an amount equal to the net investment inthe lease and the finance income is based on a constant rate of return on the outstanding net investment.

e) Transactions in Foreign Currencies

Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of thetransaction. Foreign currency monetary assets and liabilities are translated at year end exchange rates. Exchangedifferences arising on settlement of transactions and translation of monetary items are recognised as income orexpense in the year in which they arise, except in respect of the liabilities for the acquisition of Fixed Assets froma country outside India and liabilities incurred prior to April 1, 2004, where such exchange difference is adjustedin the carrying cost of the Fixed Assets.

Premium or discount on forward contracts is amortised over the life of such contract and is recognised asincome or expense, except in respect of the liabilities for the acquisitions of Fixed Assets incurred prior toApril 1, 2004, where such amortisation is adjusted in the carrying cost of the Fixed Assets. Foreign currencyoptions are stated at fair value as at year end.

On consolidation, the assets, liabilities and goodwill or capital reserve arising on the acquisition, of theGroup’s overseas operations are translated at exchange rates prevailing on the balance sheet date. Income andexpenditure items are translated at the average exchange rates for the year. Exchange differences arising arerecognised in the Group’s Translation Reserve classified under Reserves and Surplus.

f) Product Warranty Expenses

The estimated liability for product warranties is recorded when products are sold. These estimates areestablished using historical information on the nature, frequency and average cost of warranty claims andmanagement estimates regarding possible future incidence based on corrective actions on product failures.

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BASIS OF CONSOLIDATION AND SIGNIFICANT ACCOUNTING POLICIES (Contd.)

g) Income on Vehicle Loan / Hire-Purchase Income / Finance Income from Lease

Interest income from hire purchase and loan contracts and finance income in respect of vehicles and incomefrom plant given on lease, are accounted for by using the Internal Rate of Return method. Consequently, aconstant rate of return on the net outstanding amount is accrued over the period of contract. The Companyprovides an allowance for hire purchase and loan receivables that are in arrears for more than 11 months, to theextent of an amount equivalent to the outstanding principal and amounts due but unpaid. In respect of loancontracts that are in arrears for more than 6 months but not more than 11 months, allowance is provided to theextent of 10% of the outstanding and amount due but unpaid.

h) Sale of Vehicle Loans

The Company sells Vehicle Loans to Special Purpose Entities (“SPE”) in securitization transactions.Recourse is in the form of the Company’s investment in subordinated securities issued by these special purposeentities, cash collateral and bank guarantees. The loans are derecognized in the balance sheet when they are soldand consideration has been received by the Company. Sales and transfers that do not meet the criteria forsurrender of control are accounted for as secured borrowings.

Gains or losses from the sale of loans are recognized in the period the sale occurs based on the relative fairvalue of the portion sold and the portion allocated to retained interests, and are reported net of the estimated costof servicing, except for subsidiaries which are governed by prudential norms for income recognition issued bythe Reserve Bank of India for Non Banking Financial Companies (NBFC), where gains or losses on sale areaccounted for as per these norms.

j) Inventories

Inventories are valued at lower of cost and net realisable value. Cost is ascertained on a moving weightedaverage / monthly moving weighted average basis. Cost of Work-in-progress and finished goods are determinedon full absorption cost basis.

k) Employee Benefits

i) Gratuity / Pension

The Company and some of its subsidiaries have an obligation towards gratuity, a defined benefitretirement plan covering eligible employees. The plan provides for a lump sum payment to vestedemployees at retirement, death while in employment or on termination of employment of an amountequivalent to 15 to 30 days salary payable for each completed year of service. Vesting occurs uponcompletion of five years of service. The Company and the said subsidiaries make annual contributions togratuity funds established as trusts. Some subsidiaries have obtained insurance policies with the LifeInsurance Corporation of India. The Company and some of its subsidiaries account for the liability forgratuity benefits payable in future based on an independent actuarial valuation. Tata Daewoo CommercialVehicle Company Limited, TDCV a subsidiary company incorporated in Korea has an obligation towardsseverance indemnity, a defined benefit retirement plan, covering eligible employees. The plan provides for alump sum payment to all employees with more than one year of employment equivalent to 30 days’ salarypayable for each completed year of service.

ii) Superannuation

The Company and some of its subsidiares have two superannuation plans, a defined benefit plan and adefined contribution plan. An eligible employee on April 1, 1996 could elect to be a member of either plan.

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BASIS OF CONSOLIDATION AND SIGNIFICANT ACCOUNTING POLICIES (Contd.)

Employees who are members of the defined benefit superannuation plan are entitled to benefitsdepending on the years of service and salary drawn. The monthly pension benefits after retirement rangefrom 0.75% to 2% of the annual basic salary for each year of service. The Company and the saidsubsidiaries account for superannuation benefits payable in future under the plan based on an independentactuarial valuation.

With effect from April 1, 2003, this plan was amended and benefits earned by covered employees havebeen protected as at March 31, 2003. Employees covered by this plan are prospectively entitled to benefitscomputed on a basis that ensures that the annual cost of providing the pension benefits would not exceed15% of salary.

The Company and some of its subsidiares maintain separate irrevocable trusts for employees coveredand entitled to benefits. The Company and its subsidiaries contributes up to 15% of the eligible employees’salary to the trust every year. Such contributions are recognized as an expense when incurred. The Companyand the said subsidiaries have no further obligation beyond this contribution.

iii) Bhavishya Kalyan Yojana (BKY)

Bhavishya Kalyan Yojana is an unfunded defined benefit plan for employees of the Company andsome of its subsidiaries. The benefits of the plan accrue to an eligible employee at the time of death orpermanent disablement, while in service, either as a result of an injury or as certified by the appropriateauthority. The monthly payment to dependents of the deceased/disabled employee under the plan equals50% of the salary drawn at the time of death or accident or a specified amount, whichever is higher. TheCompany and the said subsidiaries account for the liability for BKY benefits payable in future based on anindependent actuarial valuation.

iv) Post-retirement Medicare Scheme

Under this scheme, employees of the Company and some of its subsidiaries get medical benefitssubject to certain limits of amount, periods after retirement and types of benefits, depending on their gradeand location at the time of retirement. Employees separated from the Company as part of Early SeparationScheme, on medical grounds or due to permanent disablement are also covered under the scheme. TheCompany and the said subsidiaries account for the liability for post-retirement medical scheme based on anindependent actuarial valuation.

v) Provident fund

The eligible employees of the Company and its subsidiaries are entitled to receive benefits in respect ofprovident fund, a defined contribution plan, in which both employees and the company/subsidiaries makemonthly/annual contributions at a specified percentage of the covered employees’ salary (currently 12% ofemployees’ salary). The contributions, as specified under the law, are made to the provident fund andpension fund set up as irrevocable trust by the Company and its subsidiaries or to respective RegionalProvident Fund Commissioner and the Central Provident Fund under the State Pension scheme. TheCompany and its subsidiaries are generally liable for monthly/annual contributions and any shortfall in thefund assets based on the government specified minimum rates of return or pension and recognises suchcontributions and shortfall, if any, as an expense in the year incurred.

vi) Compensated absences

The Company and some of its subsidiaries provides for the encashment of leave or leave with paysubject to certain rules. The employees are entitled to accumulate leave subject to certain limits, for futureencashment. The liability is provided based on the number of days of unutilized leave at each balance sheetdate on basis of an independent actuarial valuation.

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BASIS OF CONSOLIDATION AND SIGNIFICANT ACCOUNTING POLICIES (Contd.)

l) Investments

i. Long term investments are stated at cost less other than temporary diminution in value, if any.

ii. Investment in associate companies are accounted as per the ‘Equity method’, and accordingly, theshare of post acquisition reserves of each of the associate companies has been added to / deducted fromthe cost of investments.

iii. Current investments mainly comprising investments in mutual funds are stated at lower of cost and fairvalue, determined on a portfolio basis.

m) Taxes on Income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordancewith the provisions of the Income—Tax Act, 1961 or applicable foreign tax law in case of foreign subsidiaries.Current tax includes Fringe benefit tax.

Deferred tax is recognised, on timing differences, being the difference between taxable income andaccounting income that originate in one period and are capable of reversal in one or more subsequent periods.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised if thereis virtual certainty that there will be sufficient future taxable income available to realise such losses.

n) Redemption premium / discount on Foreign Currency Convertible Notes (FCCN)

Premium payable on redemption of FCCN as per the terms of issue is provided fully in the year of issue byadjusting against the Securities Premium Account (SPA). Any changes to this premium payable on account ofconversion or exchange fluctuation is also adjusted in SPA. Discount on redemption of FCCN, if any, will berecognised on redemption.

o) Business Segments

The Group’s reportable operating segment consists of Automotive and Others.

Automotive segment consists of business of automobile products consisting of all types of commercial andpassenger vehicles including financing of the vehicles sold by the Company. Others primarily includeconstruction equipment, engineering solutions, and software operations.

Segment revenues, expenses and results include transfer between business segments. Such transfers areundertaken either at competitive market prices charged to unaffiliated customers for similar goods or atcontracted rates. These transfers are eliminated on consolidation.

p) Miscellaneous Expenditure (to the extent not written off or adjusted)

Costs under individual Employee Separation Schemes are amortised over periods between 24 to 84 monthsdepending upon the estimated future benefit.

CHANGES IN ACCOUNTING POLICIES

1. During 2004-05, premium payable on redemption of FCCN has been fully provided considering AccountingStandard - AS 29 “Provisions, Contingent Liabilities and Contingent Assets” issued by the Institute ofChartered Accountants of India becoming applicable in the financial year 2004-05, and debited to SecuritiesPremium Account (SPA) as against the past practice of providing premium on a pro-rata basis and debitingto SPA. As a result, the debit to SPA is higher by Rs. 2,530.9 millions.

2. Consequent to revision of Accounting Standard - AS 15 “Employee Benefits”, the Company has adopted therevised accounting standard effective April 1, 2006 . Pursuant to the adoption, an amount of Rs. 113Millions (net of tax Rs. 57.3 millions) have been adjusted to General Reserve in the year 2006-07 fordifference as per revised AS 15 [Refer Note B (2) (a), Schedule 14].

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SCHEDULE 14

(A) Notes to Balance Sheet

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

1 (a) Claims not acknowledged as debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,532.0 2,545.0 4,090.2 94.1(b) Provision not made for income tax matters in dispute . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,155.6 2,834.1 6,333.8 145.7(c) The counter claim made by a party upon termination of distributorship arrangement by

the Company (GBP 4.432 Millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364.7 343.1 — —(d) Liquidated damages retained by customers under negotiations for waiver . . . . . . . . . . . . . — 7.2 — —

2 The claims / liabilities in respect of excise duty, sales tax and other matters where the issueswere decided in favour of the Company for which department is in further appeal . . . . . . . . . 1,435.0 180.8 275.1 6.3

3 Estimated amount of contracts remaining to be executed on capital account and not providedfor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,583.2 11,820.4 34,262.0 788.2

4 Other money for which the Company is contingently liable:(a) In respect of bills discounted and export sales on deferred credit . . . . . . . . . . . . . . . . . . . . 3,969.4 6,874.3 5,292.3 121.7(b) The Company has given guarantees for liability in respect of receivables assigned by

way of securitisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 1,314.7 6,381.5 146.8(c) Cash Margin / Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 764.4 2,793.2 3,871.5 89.1(d) In respect of retained interest in securitisation transactions . . . . . . . . . . . . . . . . . . . . . . . . 687.0 482.5 769.1 17.7(e) In respect of subordinated receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 458.3 694.5 16.0(f) Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.3 64.1 50.0 1.2

5 Pursuant to the scheme of Arrangement, stamp duty is payable on conveyance of propertiesin favour of Concorde Motors (India) Limited (CMIL), a subsidiary company, CMIL is inthe process of completing the formalities for the same. It is not possible to quantify theamount of duty payable, and adjustments, as and when effected, will be done in the cost ofland and building.

6 (a) Major components of deferred tax arising on account of timing differences are:

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

Liabilities:Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,745.7) (6,903.0) (7,352.9) (169.1)Product development cost and Reserves for Research and Development Expenses . . . . . . . . . (732.0) (1,785.3) (3,330.0) (76.6)Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (238.8) (116.3) (111.6) (2.6)

(7,716.5) (8,804.6) (10,794.5) (248.3)

Assets:Unabsorbed depreciation/ business loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155.4 59.8 92.5 2.1Employees Separation Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186.7 179.5 149.4 3.4Employee benefits / Expenses allowable on payment basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . 506.8 664.5 1,031.7 23.7Provision for doubtful debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409.2 804.4 1,012.1 23.3Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253.0 328.5 336.1 7.7

1,511.1 2,036.7 2,621.8 60.2

Net Deferred Tax Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,205.4) (6,767.9) (8,172.7) (188.1)

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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET ANDPROFIT AND LOSS ACCOUNT

SCHEDULE 14 (contd.)

(A) Notes to Balance Sheet (contd.)

(b) Deferred Tax charge for the year

Year Ended March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

Opening Deferred Tax Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,337.0 6,205.4 6,767.9 155.7Add:- Net deferred tax balance taken over upon merger of Tata Finance Ltd (net of amount

transferred to General Reserve) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (850.1) — —Add:- Net deferred tax balance taken over upon acquisition of INCAT Ltd. . . . . . . . . . . . . . . — (12.3) — —Add:- Translation impact on opening balances in respect of foreign subsidiaries . . . . . . . . . . . 2.9 3.8 8.9 0.2Add:- Net deferred tax balance on merger of Tata Motors Insurance Services Limited’s sales

and service division with Concorde Motors (India) Limited adjusted to the openingreserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5 — — —

Add:- Impact of AS-15 opening adjustment in General Reserve . . . . . . . . . . . . . . . . . . . . . . . . — — (215.8) (5.0)

5,344.4 5,346.8 6,561.0 150.9

Less:- Closing Deferred Tax Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,205.4) (6,767.9) (8,172.7) (188.1)

Deferred Tax charge for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (861.0) (1,421.1) (1,611.7) (37.2)

(c) Tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .i) Current Tax 4,045.2 4,738.2 7,121.3 163.8ii) Fringe Benefit Tax — 240.7 99.1 2.3iii) Deferred Tax. 861.0 1,421.1 1,611.7 37.1

4,906.2 6,400.0 8,832.1 203.2

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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET ANDPROFIT AND LOSS ACCOUNT

SCHEDULE 14 (contd.)

(A) Notes to Balance Sheet (contd.)

As at March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S.$Millions)

7 (A) Disclosure in respect of finance leases:(i) Assets given on lease:

(a) (i) Total Gross investment in the leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,322.0 874.9 623.3 14.3Total Gross investment in the leases for a period: . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Not later than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,176.8 453.9 376.2 8.6Later than one year and not later than five years . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,145.2 421.0 247.1 5.7

(ii) Present value of the minimum lease payments receivables. . . . . . . . . . . . . . . . . . . . 2,984.6 844.5 576.6 13.2Present Value of the minimum lease payments receivable for a period:Not later than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,934.9 432.5 349.6 8.0Later than one year and not later than five years. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,049.7 412.0 227.0 5.2

(b) Unearned Finance Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 337.4 30.4 46.7 1.1(c) The accumulated provision for the uncollectible minimum lease payments

receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47.5 218.0 112.4 2.6(d) A general description of significant leasing arrangements -

Finance lease and Hire Purchase agreements: The Group has given own manufacturedvehicles, and machines and equipment on Hire Purchase / Lease. The contingent leaserentals is based on bank interest rate and depreciation in respect of the assets given onlease.

(ii) Assets taken on lease:(a) (i) Total of minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50.3 7.3 4.1 0.1

The total of minimum lease payments for a period:Not later than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.1 4.2 1.6 *Later than one year and not later than five years. . . . . . . . . . . . . . . . . . . . . . . . . . . 30.2 3.1 2.5 0.1

(ii) Present Value of minimum lease payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.0 6.8 3.8 0.1Present Value of minimum lease payments for a period: . . . . . . . . . . . . . . . . . . . .Not later than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.6 3.9 1.4 *Later than one year and not later than five years. . . . . . . . . . . . . . . . . . . . . . . . . . . 27.4 2.9 2.4 0.1

(b) A general description of the significant leasing arrangements -The Group has taken machines and equipments on lease. The contingent lease rental isbased on State Bank Medium Term Lending Rate and the depreciation rate underIncome-tax Act, 1961 in respect of assets taken on lease. The assets are underrenewable secondary lease

(B) Disclosure in respect of operating leases:Assets taken on lease:

(a) Total of minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79.3 245.7 464.1 10.7The total of minimum lease payments for a period: . . . . . . . . . . . . . . . . . . . . . . . .Not later than one year’. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75.5 92.5 144.8 3.3Later than one year and not later than five years. . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8 153.2 319.3 7.4

(b) Lease payments recognised in the statement of profit and loss for the year . . . . . . . . . . . 113.4 132.9 139.3 3.2(c) A general description of significant leasing arrangements—

The Company has entered into operating lease arrangements for computers, propertyand office equipments from various vendors.

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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET ANDPROFIT AND LOSS ACCOUNT

SCHEDULE 14 (contd.)

(A) Notes to Balance Sheet (contd.)

8 Related party disclosures

A) Related Party and their relationshipAssociates Key Management PersonnelTata AutoComp Systems Ltd Mr. Ravi KantTata Cummins Ltd Mr. Praveen P. KadleTata Precision Industries Pte. Ltd Dr. V SumantranTata Engineering Services Pte. Ltd (Due to (Upto August 24, 2005)Common Key Management Personnel) In Subsidiary Companies: Mr. P R McGoldrickTata Sons Ltd (Investing Party) Mr. L K Pahwa Mr. U HerterNita Company Ltd Mr. Shyam Maller Mr. W K HarrisHispano Carrocera, S. A (Upto June 5, 2006) Mr. H Hutchinson(From March 16, 2005) Mr. M.V.S Prasad Mr. Fernando OviedoTSR Darashaw Ltd (From June 6, 2006) Mr. D MyersTata Securities Private Ltd Mr. Ranveer Sinha Mr. L JamesTelcon Ecoroad Resurfaces Private Ltd Mr. M L Bapna Mr. W ZofgenConcorde Motors Ltd Mr. P K Mahtha Mr. Marcus Schleer(Upto October 20, 2004) (Upto September 15, 2006) Mr. Kevin NoeTata International Ltd Mr. S C Singha Mr. Ramesh Indhewat(Upto February 28, 2005) Mr. V N Sharma Mr.A.I.RebelloNishkalp Investments and Trading Co. Ltd Mr.A K Jha (Upto January 7, 2007)(Upto January 20, 2006) (From September 16, 2006) Mr.P.C.Bandivadekar

Dr.Clive Hickman Mr. Jose Peter

B) Transactions with the related parties

AssociatesKey Management

Personnel Total Total

( in Rs. Millions ) (in U.S. $Millions)

Purchase of goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 17,608.8 — 17,608.8 405.12005-06 12,550.3 — 12,550.32004-05 9,477.8 — 9,477.8

Sale of goods (inclusive of sales tax) . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 1,165.3 — 1,165.3 26.82005-06 967.0 — 967.02004-05 1,662.6 — 1,662.6

Purchase of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 — — — —2005-06 180.0 — 180.02004-05 96.1 — 96.1

Services received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 483.9 210.7 694.6 16.02005-06 539.6 150.5 690.12004-05 348.0 51.2 399.2

Services rendered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 30.3 — 30.3 0.72005-06 45.7 — 45.72004-05 35.5 — 35.5

Finance given (including loans and equity) . . . . . . . . . . . . . . . . . . . . . 2006-07 55.5 — 55.5 1.32005-06 — — —2004-05 956.6 — 956.6

Finance taken (including loans and equity) . . . . . . . . . . . . . . . . . . . . . 2006-07 — — — —2005-06 81.2 36.5 117.72004-05 — — —

Purchase of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 — — — —2005-06 81.7 — 81.72004-05 — — —

Interest / Dividend paid / (received) (net) . . . . . . . . . . . . . . . . . . . . . . . 2006-07 673.7 — 673.7 15.52005-06 756.6 0.5 757.12004-05 32.8 — 32.8

Amount Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 94.2 — 94.2 2.22005-06 102.0 — 102.02004-05 156.4 — 156.4

Bills discounted (in respect of amount receivable) . . . . . . . . . . . . . . . . 2006-07 — — — —2005-06 11.9 — 11.92004-05 101.8 — 101.8

Amount Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 1,195.2 — 1,195.2 27.52005-06 617.7 — 617.72004-05 506.6 — 506.6

Amount Receivable (in respect of loans) . . . . . . . . . . . . . . . . . . . . . . . 2006-07 460.5 3.4 463.9 10.72005-06 394.7 3.6 398.32004-05 396.6 4.5 401.1

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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET ANDPROFIT AND LOSS ACCOUNT

SCHEDULE 14 (contd.)

(A) Notes to Balance Sheet (contd.)

8 Related party disclosures (contd.)

2004-05 2005-06 2006-07 2006-07

(in Rs. Millions) (in U.S. $Millions)

C) Disclosure in respect of material transactions with related parties

(i) Purchase of goods . . . . . . . . . . . . . . . . . . . . . . . . . Tata Cummins Ltd 9,471.6 10,537.0 14,935.6 343.6

Tata AutoComp Systems Ltd — 2,002.8 2,659.0 61.2

(ii) Sale of goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Cummins Ltd 998.8 925.8 1,044.4 24.0

NITA Company Ltd. 315.9 — — —

Tata AutoComp Systems Ltd 278.1 — — —

(iii) Purchase of fixed assets . . . . . . . . . . . . . . . . . . . Hispano Carrocera, S.A 96.1 180.0 — —

(iv) Services received . . . . . . . . . . . . . . . . . . . . . . . . . Tata Sons Ltd 250.5 443.7 400.0 9.2

Tata International Ltd 95.6 — — —

(v) Services rendered . . . . . . . . . . . . . . . . . . . . . . . . . Tata Cummins Ltd 30.7 36.5 19.4 0.4

TSR Darashaw Ltd — — 10.3 0.2

Tata International Ltd 6.1 — — —

(vi) Finance given (including loans and equity) . . . . Hispano Carrocera, S.A 396.6 — — —

Tata AutoComp Systems Ltd 210.0 — — —

Tata Sons Ltd 350.0 — — —

Telcon Ecoroad Resurfaces PrivateLtd

— — 55.5 1.3

(vii) Finance taken (including loans and equity) . . . . Tata Engineering Services Pte. Ltd. — 81.2 — —

Mr. P R McGoldrick — 36.5 — —

(viii) Purchase of investments . . . . . . . . . . . . . . . . . . Tata Engineering Services Pte. Ltd. — 81.7 — —

(ix) Interest / Dividend paid / (received)

Dividend paid . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Sons Ltd 316.3 991.4 1,096.1 25.2

Tata International Ltd 2.7 — — —

Dividend received . . . . . . . . . . . . . . . . . . . . . . . Tata Cummins Ltd (180.0) (72.0) (288.0) (6.6)

Tata Sons Ltd (74.3) (91.6) (86.4) (2.0)

Tata International Ltd (7.5) — — —

NITA Company Ltd. (4.6) — — —

Interest received . . . . . . . . . . . . . . . . . . . . . . . . . Tata AutoComp Systems Ltd (17.6) — — —

Tata International Ltd (1.1) — — —

Tata Sons Ltd (0.7) — — —

Hispano Carrocera, S. A — (14.0) (18.7) (0.4)

Niskalp Investments and TradingCo. Ltd. — (42.9) — —

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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET ANDPROFIT AND LOSS ACCOUNT

SCHEDULE 14 (contd.)

(A) Notes to Balance Sheet (contd.)

9 Consolidated Segment Information

Automotive OthersInter-SegmentEliminations Total Total

(in Rs. Millions) (in U.S. $Millions)

(A) Primary Segment

a) RevenueExternal sales and income from other operations . . . . . . 2006-07 299,472.2 24,791.9 — 324,264.1 7,459.5

2005-06 221,583.6 16,110.9 — 237,694.52004-05 186,144.4 9,467.1 — 195,611.5

Inter segment sales and other income . . . . . . . . . . . . . . . 2006-07 421.3 2,287.0 (2,708.3) — —2005-06 341.1 1,957.1 (2,298.2) —2004-05 271.6 1,414.4 (1,686.0) —

Total Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 299,893.5 27,078.9 (2,708.3) 324,264.1 7,459.52005-06 221,924.7 18,068.0 (2,298.2) 237,694.52004-05 186,416.0 10,881.5 (1,686.0) 195,611.5

b) Segment results before interest, exceptional items andtax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 30,207.4 3,329.8 (115.1) 33,422.1 768.9

2005-06 21,807.3 1,731.5 (7.1) 23,531.72004-05 18,053.5 904.4 (43.1) 18,914.8

c) i) Dividend and other income . . . . . . . . . . . . . . . . . . . . . 2006-07 1,531.8 35.22005-06 2,435.22004-05 1,339.4

ii) Interest expenses (net) . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 (4,058.1) (93.4)2005-06 (2,460.1)2004-05 (1,696.6)

iii) Exceptional item . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 (14.4) (0.3)2005-06 (17.0)2004-05 (76.7)

d) Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 30,881.4 710.42005-06 23,489.82004-05 18,480.9

Tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 (8,832.1) (203.2)2005-06 (6,400.0)2004-05 (4,906.2)

e) Profit after tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 22,049.3 507.22005-06 17,089.82004-05 13,574.7

f) Segment assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 219,597.9 13,986.0 (2,951.8) 230,632.1 5,305.62005-06 152,409.0 11,611.6 (2,036.1) 161,984.52004-05 119,054.1 7,901.8 (1,351.5) 125,604.4

g) Segment liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 72,123.6 6,987.0 (541.8) 78,568.8 1,807.42005-06 64,955.4 4,636.5 (455.0) 69,136.92004-05 59,275.7 2,880.5 (162.0) 61,994.2

h) Other informationi) Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 6,537.3 343.6 — 6,880.9 158.3

2005-06 5,780.5 452.6 — 6,233.12004-05 5,039.8 265.3 5.0 5,310.1

ii) Capital expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 27,919.2 626.3 (125.7) 28,419.8 653.82005-06 14,186.4 456.3 (9.3) 14,633.42004-05 9,469.8 258.7 (39.4) 9,689.1

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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET ANDPROFIT AND LOSS ACCOUNT

SCHEDULE 14 (contd.)

(A) Notes to Balance Sheet (contd.)

9 Consolidated Segment information (contd.)

(A) Primary Segment (contd.)

Automotive OthersInter-SegmentEliminations Total Total

(in Rs. Millions) (in U.S. $Millions)

j) Segment assets exclude:i) Goodwill (On consolidation) . . . . . . . . . . . . . . . . . . . . . . 2006-07 4,430.1 101.9

2005-06 4,122.12004-05 516.2

ii) Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 11,745.9 270.22005-06 12,615.02004-05 21,263.6

iii) Advance Tax (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 2,571.9 59.22005-06 2,878.42004-05 698.8

iv) Miscellaneous expenditure (to the extent not written offor adjusted). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 119.3 2.7

2005-06 139.12004-05 216.9

v) Interest accrued on investments . . . . . . . . . . . . . . . . . . . 2006-07 62.7 1.42005-06 64.92004-05 61.3

2006-07 18,929.9 435.42005-06 19,819.52004-05 22,756.8

k) Segment liabilities exclude:i) Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 2,499.6 57.5

2005-06 1,739.32004-05 630.5

ii) Loans secured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 44,626.5 1,026.62005-06 8,816.22004-05 5,767.0

iii) Loans unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 28,392.5 653.22005-06 24,975.22004-05 21,375.0

iv) Deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 8,172.7 188.02005-06 6,767.92004-05 6,205.4

v) Provision for premium on Redemption of ForeignCurrency Convertible Notes (FCCN) . . . . . . . . . . . . . . . 2006-07 2,842.5 65.4

2005-06 2,982.02004-05 2,936.0

vi) Proposed dividend and tax thereon . . . . . . . . . . . . . . . . 2006-07 6,864.9 158.02005-06 5,764.92004-05 5,219.2

vii) Interest / commitment charges accrued on loans butnot due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 268.9 6.2

2005-06 193.62004-05 196.4

viii) Liability towards Investors Education and ProtectionFund (under Section 205C of the Companies Act, 1956not due) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 108.9 2.5

2005-06 113.32004-05 65.9

2006-07 93,776.5 2,157.42005-06 51,352.42004-05 42,395.4

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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET ANDPROFIT AND LOSS ACCOUNT

SCHEDULE 14 (contd.)

(B) Secondary Segment

Year Ended March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

Revenue from external customersWithin India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168,707.4 196,742.5 266,983.7 6,141.8Outside India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,904.1 40,952.0 57,280.4 1,317.7Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195,611.5 237,694.5 324,264.1 7,459.5

Carrying amount of segment assetsWithin India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,294.9 139,940.0 210,782.6 4,848.9Outside India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,309.5 22,044.5 19,849.5 456.6Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125,604.4 161,984.5 230,632.1 5,305.5

Capital expenditureWithin India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,300.5 13,930.9 27,398.2 630.3Outside India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 388.6 702.5 1,021.6 23.5Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,689.1 14,633.4 28,419.8 653.8

(B) Notes to the profit and loss account :

Year Ended March 31,

2005 2006 2007 2007

(in Rs. Millions) (in U.S. $Millions)

(1) Interest:

(i) Discounting charges (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,410.8 1,649.8 1,859.8 42.8(ii) Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 980.4 1,476.6 3,004.3 69.1

2,391.2 3,126.4 4,864.1 111.9Less (i) Transferred to Capital Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.6 30.0 213.5 4.9

(ii) Interest received on bank and other accounts . . . . . . . . . . . . . . . . . . . . . 665.0 636.3 592.5 13.6

1,696.6 2,460.1 4,058.1 93.4

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SCHEDULE 14 (contd.)(B) Notes to the profit and loss account (contd.):

(2) (a) Defined benefit plans / Long term compensated absences—As per actuarial valuations as on March 31,2007(Refer page F-84 for amounts in US $)

( in Rs. Millions)

Particulars Gratuity SuperannuationCompensated

absences

Post-retirementMedicarescheme

BKY /PSY

i Components of employer expenseCurrent Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141.4 44.5 128.3 26.9 14.7Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210.2 84.6 71.7 32.2 26.6Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . (239.0) (57.6) — — —Past service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (2.5) — —Actuarial losses/(Gains) . . . . . . . . . . . . . . . . . . . . . . . . . . 687.8 (55.6) 367.7 168.9 51.8Total expense recognised in the Statement of Profit &

Loss Account in Schedule B . . . . . . . . . . . . . . . . . . . . 800.4 15.9 565.2 228.0 93.1under item: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4(b) 4(b) 4(a) 4(c) 4(c)

ii Actual Contribution and Benefit Payments for yearended March 31, 2007Actual benefit payments . . . . . . . . . . . . . . . . . . . . . . . . . . 395.5 265.7 204.6 33.4 29.0Actual Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 881.4 205.5 N/A N/A N/A

iii Net asset/(liability) recognised in balance sheet as atMarch 31, 2007Present value of Defined Benefit Obligation . . . . . . . . . . 3,622.4 1,104.0 1,464.0 614.8 411.0Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . 3,628.5 703.6 — — —Net asset/(liability) recognised in balance sheet . . . . . . 6.1 (400.4) (1,464.0) (614.8) (411.0)

iv Change in Defined Benefit Obligations (DBO) duringthe year ended March 31, 2007Present Value of DBO at beginning of year . . . . . . . . . . . 2,823.2 1,340.7 1,103.5 420.2 346.9Current Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141.4 44.5 128.3 26.9 14.7Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210.2 84.6 71.7 32.2 26.6Plan amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (7.2) — —Actuarial (gains)/ losses . . . . . . . . . . . . . . . . . . . . . . . . . . 843.1 (100.1) 372.4 168.9 51.8Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (395.5) (265.7) (204.7) (33.4) (29.0)Present Value of DBO at the end of year . . . . . . . . . . . 3,622.4 1,104.0 1,464.0 614.8 411.0

v Change in Fair Value of Assets during the year endedMarch 31, 2007Plan assets at the beginning of year . . . . . . . . . . . . . . . . . 2,769.1 750.7 N/A N/A N/AActual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . 394.3 13.1 N/A N/A N/AActual Company contributions . . . . . . . . . . . . . . . . . . . . . 860.6 205.5 N/A N/A N/ABenefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (395.5) (265.7) N/A N/A N/APlan assets at the end of the year . . . . . . . . . . . . . . . . . . 3,628.5 703.6 N/A N/A N/A

vi Actuarial AssumptionsDiscount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.50% 8.00% 8.50% 8.50% 8.50%Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . 8.00% 8.00% N/A N/A N/ASalary escalation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4% – 7.5% N/A 4% – 7.5% N/A 4% – 7.5%Medical cost inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A 4.00% N/A

vii The major categories of plan assets as percentage tototal plan assetsDebt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53% 73% N/A N/A N/ABalances with banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47% 27% N/A N/A N/A

viii Effect of one percentage point change in assumedMedical inflation rate

One percentage pointincrease in Medical

inflation rate

One percentage pointdecrease in Medical

inflation rate

Revised DBO as at March 31, . . . . . . . . . . . . . . . . . . . . . 677.8 560.0Revised service cost for 2006-07 . . . . . . . . . . . . . . . . . . . 29.7 24.7Revised interest cost for 2006-07 . . . . . . . . . . . . . . . . . . . 35.5 29.3

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SCHEDULE 14 (contd.)(B) Notes to the profit and loss account (contd.):

a) Defined Contribution Plans–The Company’s contribution to defined contribution plan aggregated Rs.1,346.2 Millions for the year endedMarch 31, 2007 has been recognised in the statement of Profit and Loss Account under item 4 (b) inSchedule B.

b) The expected rate of return on plan assets is based on market expectation, at the beginning of the year, forreturns over the entire life of the related obligation.

c) The assumption of future salary increases, considered in actuarial valuation, take account of inflation,seniority, promotion and other relevant factors, such as supply and demand in the employment market.

d) Effective April 1, 2006, the Company adopted the revised accounting standard on employee benefits.Pursuant to the adoption following amounts has been adjusted to general reserve for difference as perrevised AS-15 :

Gross Tax Net

(Rs. In Millions)Gratuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40.1 (13.5) 26.6Superannuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (70.7) 23.8 (46.9)BKY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (249.0) 83.9 (165.1)Ex Gratia on retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 449.9 (151.5) 298.4

170.3 (57.3) 113.0

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SCHEDULE 14 (contd.)(B) Notes to the profit and loss account (contd.):

(2) (a) Defined benefit plans / Long term compensated absences—As per actuarial valuations as on March 31,2007

( in U.S. $ Millions)

Particulars Gratuity SuperannuationCompensated

absences

Post-retirementMedicarescheme

BKY /PSY

i Components of employer expenseCurrent Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 1.0 3.0 0.6 0.3Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8 1.9 1.6 0.7 0.6Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . (5.5) (1.3) — — —Past service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (0.1) — —Actuarial losses/(Gains) . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.8 (1.3) 8.5 3.9 1.2Total expense recognised in the Statement of Profit &

Loss Account in Schedule B . . . . . . . . . . . . . . . . . . . . 18.4 0.3 13.0 5.2 2.1under item : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4(b) 4(b) 4(a) 4(c) 4(c)

ii Actual Contribution and Benefit Payments for yearended March 31,Actual benefit payments . . . . . . . . . . . . . . . . . . . . . . . . . . 9.1 6.1 4.7 0.8 0.7Actual Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.3 4.7 N/A N/A N/A

iii Net asset/(liability) recognised in balance sheet as atMarch 31, 2007Present value of Defined Benefit Obligation . . . . . . . . . . . 83.3 25.4 33.7 14.1 9.5Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 83.5 16.2 — — —Net asset/(liability) recognised in balance sheet . . . . . . 0.2 (9.2) (33.7) (14.1) (9.5)

iv Change in Defined Benefit Obligations (DBO) duringthe year ended March 31, 2007Present Value of DBO at beginning of year . . . . . . . . . . . 64.9 30.8 25.4 9.7 8.0Current Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 1.0 3.0 0.6 0.3Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.8 1.9 1.6 0.7 0.6Plan amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (0.2) — —Actuarial (gains)/ losses . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.4 (2.3) 8.6 3.9 1.2Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9.1) (6.1) (4.7) (0.8) (0.7)Present Value of DBO at the end of year . . . . . . . . . . . . 83.3 25.3 33.7 14.1 9.4

v Change in Fair Value of Assets during the year endedMarch 31, 2007Plan assets at the beginning of year . . . . . . . . . . . . . . . . . . 63.7 17.3 N/A N/A N/AActual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . 9.1 0.3 N/A N/A N/AActual Company Contributions . . . . . . . . . . . . . . . . . . . . . 19.8 4.7 N/A N/A N/ABenefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9.1) (6.1) N/A N/A N/APlan assets at the end of the year . . . . . . . . . . . . . . . . . . 83.5 16.2 N/A N/A N/A

vi Actuarial AssumptionsDiscount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.50% 8.00% 8.50% 8.50% 8.50%Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . 8.00% 8.00% N/A N/A N/ASalary escalation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4% – 7.5% N/A 4% – 7.5% N/A 4% – 7.5%Medical cost inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A N/A 4.00% N/A

vii The major categories of plan assets as percentage tototal plan assetsDebt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53% 73% N/A N/A N/ABalances with banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47% 27% N/A N/A N/A

viii Effect of one percentage point change in assumedMedical inflation rate

One percentage pointincrease in Medical

inflation rate

One percentage pointdecrease in Medical

inflation rate

Revised DBO as at March 31, . . . . . . . . . . . . . . . . . . . . . . 15.6 12.9Revised service cost for 2006-07 . . . . . . . . . . . . . . . . . . . . 0.7 0.6Revised interest cost for 2006-07 . . . . . . . . . . . . . . . . . . . 0.8 0.7

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SCHEDULE 14 (contd.)(B) Notes to the profit and loss account (contd.):

a) Defined Contribution Plans—

The Company’s contribution to defined contribution plan aggregated US $ 31.0 Millions for the year endedMarch 31, 2007 has been recognised in the statement of Profit and Loss Account under item 4 (b) inSchedule B.

b) The expected rate of return on plan assets is based on market expectation, at the beginning of the year, forreturns over the entire life of the related obligation.

c) The assumption of future salary increases, considered in actuarial valuation, take account of inflation,seniority, promotion and other relevant factors, such as supply and demand in the employment market.

d) Effective April 1, 2006, the Company adopted the revised accounting standard on employee benefits.Pursuant to the adoption following amounts has been adjusted to general reserve for difference as perrevised AS-15:

Gross Tax Net

(in US $ Millions)Gratuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.9 (0.3) 0.6Superannuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.6) 0.5 (1.1)BKY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5.7) 1.9 (3.8)Ex Gratia on retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3 (3.5) 6.8

3.9 (1.4) 2.5

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SCHEDULE 14 (contd.)(B) Notes to the profit and loss account (contd.):

(2) (b) Details of Severance Indemnity plan applicable to Tata Daewoo Commercial Vehicle Co. Ltd., Korea ason March 31, 2007

( in Rs.Millions) (in U.S. $ Millions)

i Components of employer expenseCurrent service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158.8 3.7Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.5 1.4Actuarial losses/(gains) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235.1 5.4Total expense recognised in the Statement of Profit & Loss Account in Schedule B under item 4

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456.4 10.5ii Actual Contribution and Benefit Payments for year ended March 31, 2007

Actual benefit payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94.3 2.2iii Net asset/(liability) recognised in Balance Sheet as at March 31, 2007

Present value of Defined Benefit Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,496.3 34.4Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —Net asset/(liability) recognised in Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,496.3) (34.4)

iv Change in Defined Benefit Obligations during the year ended March 31, 2007Present value of DBO at the beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,137.3 26.2Current service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158.8 3.7Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.5 1.4Actuarial losses/(gains) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235.1 5.4Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (94.3) (2.2)Exchange fluctuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3.1) (0.1)Present Value of DBO at the end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,496.3 34.4

v Change in Fair Value of Assets during the year ended March 31, 2007Plan assets at the beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/AAcquisition adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/AActual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/AActual Company Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/ABenefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/APlan assets at the end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A

vi Actuarial AssumptionsDiscount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.00% 5.00%Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/ASalary escalation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.00% 7.00%Medical cost inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A

Effective April 1, 2006, the Company adopted the revised Accounting Standard on Employee Benefits. Pursuantto the adoption Rs. 266.8 Millions (US $ 6.1 Millions) [(net of tax Rs. 101.2 Millions) (US $ 2.3 Millions)] hasbeen adjusted to general reserve.

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SCHEDULE 14 (contd.)(B) Notes to the profit and loss account (contd.):

(3) Earnings Per Share:

Year Ended March 31,

2005 2006 2007 2007

(a) Profit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rs. Millions 13,853.4 17,280.9 21,699.9 U.S. $ Millions 499.2(b) The weighted average number of Ordinary Shares for

Basic EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nos. 359,837,353 376,804,863 384,544,205(c) The nominal value per Ordinary Share . . . . . . . . . . . . . . Rupees 10 10 10(d) Earnings Per Share (Basic) . . . . . . . . . . . . . . . . . . . . . . . Rupees 38.50 45.86 56.43 U.S.$ 1.3(e) Profit for the year for Basic EPS . . . . . . . . . . . . . . . . . . . Rs. Millions 13,853.4 17,280.9 21,699.9 U.S. $ Millions 499.2

Add:Interest payable on outstanding Foreign CurrencyConvertible Notes . . . . . . . . . . . . . . . . . . . . . . . . . . Rs. Millions 90.5 101.8 99.4 U.S. $ Millions 2.3

(f) Profit for the year for Diluted EPS . . . . . . . . . . . . . . . . . Rs. Millions 13,943.9 17,382.7 21,799.3 U.S. $ Millions 501.5(g) The weighted average number of Ordinary Shares for

Basic EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nos. 359,837,353 376,804,863 384,544,205(h) Add: Adjustment for Options relating to warrants,

fractional coupons and Foreign Currency ConvertibleNotes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nos. 26,719,121 26,042,196 22,622,790

(j) The weighted average number of Ordinary Shares forDiluted EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nos. 386,556,474 402,847,059 407,166,995

(k) Earnings Per Share (Diluted) . . . . . . . . . . . . . . . . . . . . . . Rupees 36.07 43.15 53.54 U.S.$1.23

Year Ended March 31,

2005 2006 2007 2007

(in Rs.Millions) ( in U.S.$ Millions)

(4) Other Provision includes :(a) Product warranty

Opening Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,592.3 1,778.7 1,782.5 41.0Add: Provision for the year (net) (including

additional provision for earlier years) . . . . . . . . . 1,853.9 1,756.3 2,413.3 55.5Less: Payments / debits (net of recoveries from

suppliers) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,667.5) (1,752.5) (2,037.2) (46.9)

Closing Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,778.7 1,782.5 2,158.6 49.6

The provision is expected to be utilised for settlement of warranty claims within a period of 2 to 3 years.

(b) Premium on redemption of Foreign Currency Convertible Notes(FCCN)Opening Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.3 2,936.0 2,982.0 68.6Add: Provisions for the year # . . . . . . . . . . . . . . . . . 2,920.7 — — —Add / (Less): Foreign currency exchange

difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 58.7 (70.0) (1.6)Less: Reversal due to conversion of FCCN . . . . . . . — (12.7) (69.5) (1.6)

Closing Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,936.0 2,982.0 2,842.5 65.4

# Consequent to Accounting Standard 29 becoming applicable from April 1, 2004, the premium payable on redemption of FCCN was fullyprovided and debited to Securities Premium Account (SPA) in the year 2004-05 as against the past practice of providing on pro-rata basisand debiting to SPA. As a result, the debit to SPA was higher by Rs. 2530.9 Millions in the year 2004-05.

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SCHEDULE 14 (contd.)(B) Notes to the profit and loss account (contd.):

(5) The additional disclosure as required by AS 7 (Revised) on Construction Contracts are as follows:

a) Advance received is Rs. 24.9 Millions (as at March 31, 2006 Rs. 57.6 Millions and as at March 31,2005 Rs. Nil)

b) Retention money is Rs. 55.3 Millions (as at March 31, 2006 Rs. 36.3 Millions and as at March 31, 2005Rs. Nil)

c) Contract revenue recognised during the year is Rs. 599.0 Millions (2005-06 Rs. 485.2 Millions and2004-05 Rs. 415.6 Millions)

d) Aggregate amount of costs incurred and recognised profits (less recognised losses) Rs. 646.0 Millions(as at March 31, 2006 Rs. 454.7 Millions and as at March 31, 2005 Rs. 115.90 Millions)

(6) The share of profit / (loss) in respect of investments in associate companies include the figures which areconsidered as per the unaudited financial statements / profit and loss account for the year ended March 31,2005, 2006 and 2007, as per the details given below :

Name of the Associate

Share in Post-acquistion Reservesand Profit and Loss Account upto March 31,

Profit / (Loss) for theyear endedMarch 31,

2005 2006 2007 2005 2006 2007

( in Rs. Millions) ( in Rs. Millions)Tata AutoComp Systems Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.8 102.8 (2.7) 161.0 128.6 (90.8)Tata Securities Pvt. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 20.4 28.3 — 12.0 12.5TSR Darashaw Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 6.1 11.8 — 7.0 9.2Hispano Carrocera, S. A. (from March 16, 2005) . . . . . . . . . . . . . . (7.7) (23.4)* (23.4) (7.7) (14.8)* —*Tata Precision Industries Pte. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . (52.4)* (31.1)* (31.1) —* —* —*Telcon Ecoroad Resurfaces Private Ltd. . . . . . . . . . . . . . . . . . . . . . — (7.8) — — (5.6) —Tata International Ltd. (upto February 28, 2005) . . . . . . . . . . . . . . . 169.2 — — 53.4 — —

131.9 67.0 (17.1) 206.7 127.2 (69.1)

* The share of loss restricted to carrying cost of investment.

(7) During the year ended March 31, 2005 Minicar (India) Ltd. was renamed as Concorde Motors (India) Ltd.with effect from June 16, 2004.

(8) In terms of scheme approved by the High Courts of Judicature at New Delhi and Mumbai, the Sales andService division of Concorde Motors Ltd. (CML) has been transferred to Concorde Motors (India) Ltd.(CMIL) with effect from January 1, 2004. The effect of the demerger has been given in the respective booksof account in the year 2004-05.

(9) The Company made further investment of Rs. 92.4 Millions on October 21, 2004 in Tata Motors InsuranceServices Limited [formerly known as Concorde Motors Ltd. (CML)] by way of purchase of shares fromTata Finance Ltd. and Tata Industries Ltd. Consequently, Tata Motors Insurance Services Limited (formerlyknown as Concorde Motors Ltd. (CML) has become 100% subsidiary of the Company.

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SCHEDULE 14 (contd.)(B) Notes to the profit and loss account (contd.):

(10) In accordance with the provisions of Section 78 read with Section 100 of the Companies Act, 1956 and theapproval of High Court of Judicature at Mumbai, TAL Manufacturing Solutions Ltd, a subsidiary, in theyear 2004-05 adjusted against Share Capital, the balance in the miscellaneous expenditure of Rs. 37.8Millions, employee separation cost of Rs. 21.5 Millions, other expenses of Rs. 9.1 Millions and the debitbalance in the profit and loss account of Rs. 781.6 Millions. Consequently, miscellaneous expenditure,employee separation cost and other expenses recorded in prior years was written off.

(C) Other notes:

(1) In terms of the Scheme of Amalgamation (Scheme) sanctioned by order dated June 28, 2005, of Hon’bleHigh Court of Judicature at Mumbai, Tata Finance Ltd. (TFL) whose core business was providing financefor commercial vehicles, passenger cars and construction equipments was amalgamated with the Companywith effect from April 1, 2005. In accordance with the said Scheme:

(a) the Authorised Share Capital of the Company was increased to Rs.4,10,00,00,000 divided into41,00,00,000 Ordinary Shares of Rs. 10 each.

(b) the assets, liabilities, rights and obligations of TFL vested in the Company with effect from April 1,2005 and were recorded at their respective carrying values under the pooling of interest method ofaccounting for amalgamation after making adjustments to ensure uniform set of accounting policies asstated in (d) below.

(c) 1,45,04,949 Equity Shares of Rs.10 each of the Company were issued as fully paid-up to the holders of18,13,11,857 Equity Shares of TFL, in the ratio of 8 Shares of the Company of Rs.10 each for every100 Shares of TFL of Rs.10 each, without payment being received in cash.

(d) the debit balance of Rs.1,047.5 Millions remaining in the Profit and Loss Account of TFL wastransferred to General Reserves and an amount of Rs.204.7 Millions (net of deferred tax) was adjustedto the General Reserves to ensure uniform set of accounting policies, in respect of some of the items ofTFL.

(e) the reserves of TFL were incorporated in the Company’s books of account as reduced by Rs.599.3Millions towards cost of investments of the Company in the Equity Shares of TFL.

(f) the Preference Share Capital of TFL of Rs.1,500 Millions was fully adjusted against the investments ofthe Company in the said Capital.

(g) the difference of Rs.1,853.0 Millions between the amounts recorded as Equity Share Capital to beissued to TFL shareholders and the amount of the Equity Share Capital of TFL was credited to theGeneral Reserve of the Company.

(h) Arrears of dividend on cumulative preference shares of TFL was provided from the brought forwardprofits of the Company.

(2) In terms of the Scheme of Amalgamation (Scheme) sanctioned by order dated June 29, 2005, of Hon’bleHigh Court of Judicature at Mumbai, Telco Dadajee Dhackjee Ltd (TDDL) and Suryodaya Capital Finance(Bombay) Ltd (SCFL), both 100% subsidiaries of the Company as on March 31, 2005, were amalgamatedwith the Company with effect from April 1, 2005.

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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET ANDPROFIT AND LOSS ACCOUNT

SCHEDULE 14 (contd.)(C) Other notes (contd.):

In accordance with the said Scheme:

(a) the assets, liabilities, rights and obligations of TDDL and SCFL were vested in the Company witheffect from April 1, 2005 and were recorded at their respective carrying values under the pooling ofinterest method of accounting for amalgamation after making adjustments to ensure uniform set ofaccounting policies as stated in (b) below.

(b) the credit balance of Rs. 6.6 Million remaining in the Profit and Loss Accounts of TDDL and the debitbalance of Rs. 0.1 Million of SCFL were transferred to General Reserve of the Company and anamount of Rs. 0.8 Million was adjusted to the General Reserves to ensure uniform set of accountingpolicies, in respect of some of the items of TDDL.

(c) the paid up share capital of TDDL and SCFL of Rs. 6.5 Million and Rs. 0.5 Million respectively wereadjusted against the cost of investment of the Company in the equity share capital of TDDL and SCFLrespectively, and the balance cost of investment of Rs. 446.1 Millions and Rs. 7.7 Million of theCompany in the equity share capital of TDDL and SCFL respectively, were adjusted against thereserves of the Company as under :

• Securities Premium Rs. 115.6 Millions (TDDL)

• General Reserves Rs. 338.2 Millions

(d) the Special Reserve (created pursuant to section 45 IC of the RBI Act, 1934) of Rs. 12.7 Millions andthe Revaluation Reserve of Rs. 268.2 Millions were recorded in the Company’s books in the sameform.

(3) Tata Technologies Inc., USA, an indirect subsidiary of the Company acquired during the year 2005-06INCAT International Plc. (INCAT), a UK based company engaged in the business of Product LifecycleManagement, engineering and design, IT software and infrastructure services and solutions, renderingservices principally to the automotive, aerospace and durable goods manufacturing industries.

(4) The Company held 35.59% of the issued share capital of Niskalp Investments and Trading CompanyLimited upto January 20, 2006. This investment has not been accounted for as an associate as per AS-23, asthe management had intentions to sell it off and it was sold on January 20, 2006.

(5) The financial results for the year ended March 31, 2006 include the results of the operations of erstwhileTFL for the period April 1, 2005 to March 31, 2006, of INCAT International Plc. (INCAT) for the periodOctober 3, 2005 to March 31, 2006, of Tata Technologies (Thailand) Limited. (TTL Thailand) for the periodOctober 10, 2005 to March 31, 2006, and Tata Technologies Pte. Limited, Singapore (TTPL Singapore) forthe period December 7, 2005 to March 31, 2006. The comparative figures for the year ended March 31,2007, include the results of the operations of erstwhile TFL, INCAT, TTL Thailand and TTPL Singapore forthe entire year and as such, the financial results for the years ended March 31, 2007, March 31, 2006 andMarch 31, 2005, are not comparable to this extent.

(6) Figures for the year 2004-05 and 2005-06 have been re-grouped where necessary to make them comparable.

(7) The rate of exchange used for converting rupees into U.S.dollars is U.S. $1 = Rs. 43.47 being the average ofthe T.T. (telegraphic transfer) buying and selling rates as on March 30, 2007 as quoted by the State Bank ofIndia.

(8) The figures disclosed in the Consolidated Financial Statements are extracted from the audited IndianStatutory Accounts for the years ended March 31, 2005, March 31, 2006 and March 31, 2007, approved bythe Board of Directors on May 17, 2005, May 19, 2006 and May 18, 2007 respectively, and on which

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SCHEDULE 14 (Contd.)

auditors, viz, Messers Deloitte Haskins & Sells, (joint auditors Messers A.F.Ferguson & Co, and MessersS.B.Billimoria for the year ended March 31, 2005) have issued their opinion dated May 17, 2005, May 19,2006 and May 18, 2007 respectively. Any event subsequent to the said dates has not been considered /adjusted.

(9) Figures in the Notes / Schedules to the Financial Statements pertain to 2006-07 unless otherwise stated /indicated.

(10) * under column “in US $ Millions” represents amount less than US $ 50,000/-

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REGISTERED OFFICE OF THE ISSUER

Tata Motors Limited

Bombay House, 24 Homi Mody StreetMumbai 400 001

India

www.tatamotors.com

TRUSTEE

Citibank, N.A., London BranchCitigroup Centre, 14th Floor

Canada Square, Canary WharfLondon E14 5LB

PRINCIPAL PAYING, CONVERSION AND TRANSFER AGENT

Citibank, N.A., London BranchCitigroup Centre, 21st Floor

Canada Square, Canary WharfLondon E14 5LB

LEGAL ADVISORSTo the Issuer

as to Indian law

AZB & PartnersExpress Towers, 23rd Floor

Nariman PointMumbai 400 021

India

as to United States law

Sullivan & Cromwell LLP28th Floor

Nine Queen’s Road CentralHong Kong

To the Initial Purchasers

as to Indian law

Talwar Thakore & AssociatesHague Building9 Sprott RoadBallard Estate

Mumbai 400 001India

as to United States law

Linklaters LLPOne Silk Street

London EC2Y 8HQUnited Kingdom

AUDITORS OF THE ISSUER

Deloitte Haskins & SellsMaker Towers ‘E’, 4th Floor

Cuffe ParadeMumbai 400 005

India

Page 224: Tata Motors

US$490,000,000Zero Coupon Convertible Alternative Reference Shares due 2012 Convertibleinto Qualifying Securities, Ordinary Shares or American Depositary Shares

Representing Ordinary Shares

Issue Price: 100%

OFFERING MEMORANDUM

Sole Global Coordinator

Citi

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July 9, 2007