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 overallotment 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
July 9, 2007

JPMorgan

TABLE OF CONTENTS
Page

Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Market Price Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange Rates and Exchange Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-Consolidated Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Selected Reformatted Consolidated Historical Financial and Other Information . . . . . . . . . . . . . . . . . . . . . . Selected Reformatted Non-Consolidated Historical Financial and Other Information . . . . . . . . . . . . . . . . . . Industry and Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Directors and Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Tata Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Indian Securities Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Description of the CARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Transfer Restrictions on the CARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Description of the American Depositary Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Information Relating to the Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Description of the Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Foreign Investment and Exchange Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Government of India Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Validity of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Enforceability of Civil Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Index to the Non-Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Index to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 3 11 20 21 22 23 24 27 30 35 49 56 58 65 90 92 101 102 110 116 117 120 124 124 125 126 F-1 F-1

This Offering Memorandum is being furnished by us in connection with an offering exempt from the registration requirements under the Securities Act solely for the purpose of enabling a prospective investor to consider the purchase of the CARS offered by this Offering Memorandum. This Offering Memorandum is personal to each offeree and does not constitute an offer to any other person or to the public generally to subscribe for or otherwise acquire the CARS. Distribution of this Offering Memorandum to any other person other than the prospective investor and any person retained to advise such prospective investor with respect to its purchase is unauthorized, and any disclosure or any of its contents, without our prior written consent, is prohibited. By accepting delivery of this Offering Memorandum, you agree to the foregoing and further agree not to 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 Offering Memorandum, including the Society of Indian Automobile Manufacturers, or SIAM. No representation or warranty, express or implied, is made by either of the initial purchasers as to the accuracy or completeness of such information, and nothing contained herein is, or shall be relied upon as, a promise or representation by either 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 the transactions described herein and all materials of any kind (including opinions or other tax analyses) that are provided to you relating to such tax treatment and tax structure. i

All intellectual property rights in and to any Convertible Alternative Reference Securities products, the concepts and ideas relating to the CARSTM embodied herein and the trademark CARS shall remain vested in Citigroup Inc. or its affiliates and all rights are reserved. We accept full responsibility for the information contained in this Offering Memorandum and, having made all 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 of the 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, true and accurate and not misleading. The opinions and intentions expressed in this Offering Memorandum with regard to us (including our subsidiaries), the CARS, the QSs, the Shares and the ADSs are honestly held, have been reached after considering all relevant circumstances, are based on information presently available to us and are based on reasonable assumptions. There are no other facts in relation to us (including our subsidiaries), the CARS, the QSs, the Shares or the ADSs, the omission of which would, in the context of the issue and the offering 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 such information and statements. Where information contained in this Offering Memorandum includes extracts from summaries and information and data from various published and private sources, we accept responsibility for accurately reproducing such summaries and data. Your attention is drawn to certain amendments issued by the Ministry of Finance that provide that certain overseas corporate bodies (OCBs), as defined under applicable regulations in India, that are not eligible to invest in India, and entities prohibited from buying, selling or dealing in securities by the Securities and Exchange Board of India (SEBI) shall not be eligible to participate in an offering of foreign currency convertible bonds. Each purchaser of the CARS is deemed to have acknowledged, represented and agreed that it is eligible to invest in India under applicable law, including under the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993, as amended from time to time, 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 Offering Memorandum and any information or representation not so contained must not be relied upon as having been authorized on behalf of us or either of the initial purchasers. The delivery of this Offering Memorandum at any time 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 is accepted by either of the initial purchasers as to the accuracy or completeness of the information contained in this Offering Memorandum or any other information supplied in connection with the CARS, the QSs, the Shares or the ADSs. Each person receiving this Offering Memorandum acknowledges that such person has not relied on either of the initial purchasers in connection with its investigation of the accuracy of such information or its investment decision and each such person must rely on its own examination of us and the merits and risks involved in investing in the CARS. You should consult your own advisers as needed to make your investment decision and determine whether you are legally able to purchase the CARS under applicable laws or regulations. Market data and certain industry forecasts used throughout this Offering Memorandum have been obtained from internal surveys, market research, publicly available information and industry publications. Industry publications generally state that the information that they contain has been obtained from sources believed to be reliable 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, and neither 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 THE SECURITIES ACT. EACH PURCHASER OF THE CARS WILL BE DEEMED TO HAVE MADE CERTAIN ACKNOWLEDGMENTS, REPRESENTATIONS AND AGREEMENTS REGARDING THE CARS AND THE

ii

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 ISSUABLE UPON CONVERSION OF THE CARS. SEE TRANSFER RESTRICTIONS ON THE CARS.

In this Offering Memorandum, unless otherwise noted or the context otherwise requires, all financial and other data regarding our business and operations is presented on a non-consolidated basis for Tata Motors Limited. In this Offering Memorandum, unless the context otherwise requires, references to our, us and we are to Tata Motors Limited on a non-consolidated basis and references to you are to the prospective investors in the 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 rupee amounts into US dollar amounts at specified rates solely for the convenience of the reader. These translations should 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, all translations from rupee to US dollars have been made on the basis of exchange rates quoted by the Federal Reserve Bank of New York on March 30, 2007 of Rs. 43.10 = US$1.00. As of July 6, 2007, the rupee/dollar buying 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 commercial vehicles, 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 a seating capacity of seven to 12 persons, excluding the driver. References in this Offering Memorandum to multipurpose 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 a seating capacity of up to six persons, including the driver; passenger cars are further classified into the following segments: mini cars, which have a length of up to 3,400mm; compact cars, which have a length between 3,401mm 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 length between 4,701 and 5,000mm, and above 5,001mm, respectively. Millimeters or mm are equal to 1/1000 of a meter. 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 to 1,000 kilograms or approximately 2,200 pounds. Unless otherwise stated, comparative and empirical industry data in this Offering Memorandum have been derived from published reports of SIAM. Our market share data presented 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 on March 31 of the indicated year. Indian GAAP means accounting principles generally accepted in India. All financial information in this Offering Memorandum has been presented in accordance with Indian GAAP. All discrepancies in the tables included in this Offering Memorandum between the amounts listed and the totals thereof are due to rounding. The distribution of this Offering Memorandum and the offering and sale of the CARS in certain jurisdictions may be restricted by law. Persons into whose possession this Offering Memorandum comes are required by us and the initial purchasers to inform themselves about and to observe any such restrictions. This Offering Memorandum does not constitute, and may not be used for or in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it is unlawful to make such offer or solicitation. For a description of further restrictions on offers and sales of the CARS and distribution of this Offering Memorandum, see Plan of Distribution. iii

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-looking statements. All statements regarding our expected financial condition and results of operations, business, plans and prospects are forward-looking statements. These forward-looking statements include statements as to our business strategy, our revenue and profitability, planned projects and other matters discussed in this Offering Memorandum regarding matters that are not historical fact. These forward-looking statements and any other projections contained in this Offering Memorandum (whether made by us or any third party) involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or other projections. The factors that could cause our actual results, performances and achievements to be materially different from any of our forward-looking statements include, among others: general political, social and economic conditions, and the competitive environment in India and other markets 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 and investment 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 enhancement projects; significant movements in the prices of key inputs such as steel, aluminum, rubber and plastics; and other factors beyond our control.

iv

SUMMARY The following summary is qualified in its entirety by the more detailed information and our financial statements that appear elsewhere in this Offering Memorandum. Unless otherwise stated, all financial and other data 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 the over-allotment option described herein. Overview The Tata Group, founded by Jamsetji Tata in the mid-19th century, is one of Indias largest and most respected business conglomerates with 96 operating companies in seven business sectors and revenues of US$48 billion in fiscal 2007. With revenues of US$7.4 billion in fiscal 2007, we, Tata Motors, are the second largest company 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 units sold in India during fiscal 2007. We have the widest portfolio of automotive products, ranging from sub-1-ton to 40-ton GVW trucks (including pick-ups) and from small, medium, and large buses and coaches to passenger cars and utility vehicles. According to a 2003 report of Verband der Automobilindustrie (VDA), we are the fifth largest medium and heavy commercial vehicle manufacturer and the second largest manufacturer of buses in the above 8-ton category in the world. Our automotive operations include the design, manufacture, assembly and sale of the above mentioned vehicles, 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 Indian Automobile Manufacturers (SIAM) to include cars, utility vehicles and commercial vehicles (trucks, pick-ups and buses), in India in fiscal 2005, 2006 and 2007 was 25.4%, 26.6% and 27.7%, respectively. We had a market share in medium and heavy commercial vehicles, or M&HCVs, in India of approximately 65.1%, 62.0% and 62.7% for fiscal 2005, 2006 and 2007, respectively, and have a significant presence in the compact and mid-size car market. We believe that we have established a strong position in the Indian automotive industry by launching new products, achieving high quality-low cost manufacturing, investing in research and development and maintaining our financial strength. We have also benefited from expansion of our manufacturing and distribution network and the 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 a 100% stake in Daewoo Commercial Vehicle, Korea in 2004 and a 21% stake in the Spanish bus and coach manufacturer Hispano Carrocera in 2005. We also entered into joint venture arrangements with Fiat S.p.A in 2006 for passenger cars, IVECO of Italy in 2007 for commercial vehicles, Marcopolo S.A. of Brazil in 2006 for buses 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 our commercial vehicle and passenger vehicle businesses. We also have a widespread manufacturing footprint in India 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 of establishing another 2 facilities at Singhur (East) and Dharwad (South).

We believe that our technological leadership among Indian automotive companies has enabled us to successfully design, develop and produce our own range of vehicles through in-house research and development activities with assistance from foreign research consultants on a need basis. We have also set up a research and development facility in the United Kingdom to benefit from the European automotive trends and incorporate those trends in our vehicles for our customers in India and abroad. In addition, we have also designed and manufactured 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 Mission Plan (2006-16) of India envisions India as a destination of choice for design and development of automobiles and related parts. Robust economic growth, improvement in infrastructure, growing affluence and low car penetration present years of great opportunity for the Indian automotive industry in general and for us in particular. Pursuing our ambitious goals to create a further dominant position in the Indian market and to be a global automotive manufacturer with significant presence, we are in a strong position to benefit from the unfolding opportunity in the Indian and the global automotive industry. Corporate Information Our registered address and corporate office is located at Bombay House, 24, Homi Mody Street, Mumbai 400 001, 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 are listed on the BSE, the NSE, and one other stock exchange in India, namely the Madhya Pradesh stock exchange. We have announced our intention to pursue delisting of the Shares from the Madhya Pradesh stock exchange. Our existing ADSs are listed on the New York Stock Exchange. Tata Incorporated serves as our authorized United States representative. The address of Tata Incorporated is 3 Park Avenue, 27th Floor, New York, NY 10016, United States of America.

THE OFFERING Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The CARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Motors Limited, a public company incorporated in the Republic of India with limited liability. Zero Coupon Convertible Alternative Reference Securities due 2012. US$450,000,000 initial aggregate principal amount of the CARS are being offered outside the United States in reliance on Regulation S under the Securities Act and other applicable laws. The CARS are not being offered in India. We granted to the initial purchasers an option to purchase up to US$40,000,000 additional aggregate principal amount of CARS at the offering price, solely for the purpose of covering over-allotments. This option has been exercised in full and we have so notified the SGX-ST. 100% July 11, 2007 Unless the CARS have been previously redeemed, repurchased and cancelled or converted, the Issuer will redeem the CARS on July 12, 2012 (the Maturity Date) at a price equal to 131.82% of the outstanding principal amount thereof. The CARS will not bear any interest. The CARS will be direct, unsecured and unsubordinated obligations of the Issuer, ranking at least pari passu in right of payment with all other unsecured and unsubordinated debt of the Issuer. The CARS are not rated by any rating agency and the Issuer does not intend to seek a rating for the CARS. Payments by the Issuer in respect of the CARS and all deliveries of Shares or ADSs made upon conversion of the CARS will be made free and clear of, and without deduction or withholding in respect of Indian taxation save to the extent required by law. Where tax is required to be deducted or withheld, the Issuer will gross up the taxable amount and will be required to account separately to the Indian tax authorities for any withholding taxes applicable on such amounts. The CARS (together with the Shares or ADSs issuable upon conversion of the CARS and the Shares represented by such ADSs) will have the benefit of the tax concessions available under the provisions of Section 115AC of the Income Tax Act, 1961 of India and

The Offering . . . . . . . . . . . . . . . . . . . . . . . . . . .

Issue Price of the CARS . . . . . . . . . . . . . . . . . Issue Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Maturity Date and Final Redemption . . . . . . . .

Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Status of the CARS . . . . . . . . . . . . . . . . . . . . .

Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Indian Taxation . . . . . . . . . . . . . . . . . . . . . . . . .

The Issue of Foreign Currency Convertible Bonds and Ordinary Shares (through Depositary Receipt Mechanism) Scheme 1993 promulgated by the Government of India (the Depositary Receipt Scheme). These tax concessions include withholding in respect of interest and premium on the CARS at a reduced rate of 10% plus an applicable surcharge and an education cess. Gains realized outside India on the sale or transfer of such CARS or ADSs (but not the Shares represented by those ADSs) by a holder who is a non-resident of India to another non-resident of India are exempt from Indian capital gains tax. See Taxation Indian Taxation of the CARS. Under current Indian laws, no tax is payable by the recipients of dividends on shares of an Indian company, including Shares deliverable upon conversion of the CARS and Shares represented by ADSs. However, the Issuer will be liable to pay distribution tax on dividends paid on the Shares (including Shares represented by ADSs) at a rate of approximately 17% (inclusive of surcharge and education cess). Conversion of the CARS . . . . . . . . . . . . . . . . Subject to certain conditions and limitations, each Holder will have the right during the Conversion Period and the Change of Control Conversion Period (each as defined herein) (or, if the CARS shall have been called for redemption, until the seventh day prior to the date fixed for any redemption) to convert its CARS (i) in the event there has been a Qualifying Issue by the time of conversion, into QSs (ii) in the event that there has been a Qualifying Issue but we notify the Holders that the CARS are no longer convertible into QSs, into Shares or ADSs, each currently representing one Share, at their election, or (iii) in the event that there has not been a Qualifying Issue of QSs, at the Holders election into Shares or ADSs; provided, however, that such right to convert the CARS into QSs, Shares or ADSs will be suspended during any Closed Period (as defined herein), and the Conversion Period and the Change of Control Conversion Period shall not include any such Closed Period. See Description of the CARS Conversion. October 11, 2011, or, if such date is not a Business Day, the next following Business Day. The initial Conversion Price will be Rs.960.96 per Share with a fixed rate of exchange on conversion of Rs.40.59 = US$1.00 The Conversion Price will be subject to adjustment in certain circumstances. See Description of the CARS Conversion and Adjustments.

Conversion Period Commencement Date . . . . .

Conversion Price . . . . . . . . . . . . . . . . . . . . . . . .

Conversion Price Reset Date . . . . . . . . . . . . . . .

The Conversion Price Reset Date shall be the later of (i) the Business Day prior to the Conversion Period Commencement Date, in the event that there has been a Qualifying Issue prior to the Conversion Period Commencement Date or (ii) the date an issue and listing of QSs satisfies all conditions to become a Qualifying Issue. The Conversion Reset Pricing Period is the three month period ending on the Conversion Price Reset Date. Qualifying Issue means the offering and listing of QSs which in aggregate complies with the rules of a Relevant Stock Exchange and the following conditions: (a) it is an offer of QSs for subscription for cash to no fewer than 20 institutional investors other than the companies 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; (b) the aggregate number of Shares underlying or related to the QSs listed and available for trading on the Relevant Stock Exchange or on an over-the-counter basis is equal to or greater than 75% of the number of Shares which would have been issued in the event that all of the CARS were converted on the day of 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 after the issue and listing of any such QSs (see Description of the CARS Conversion Conversion Right) and which would be applicable in the event of any conversion into QSs, would be greater than the SEBI Floor Price. Any one of the London Stock Exchange, the Luxembourg Stock Exchange, the SGX-ST, the Tokyo Stock Exchange or any other exchange that may be approved by an Independent Financial Institution. The Issuer has agreed to observe certain covenants, including, among other things, limitations on the incurrence of any Liens (as defined herein) to secure payment obligations under any Debt Instruments (as defined herein). See Description of the CARS Certain Covenants. To the extent permitted by applicable law, unless the CARS have been previously redeemed, repurchased and cancelled or converted in the event of a Delisting (as described herein) of the Shares from the BSE and the NSE, each Holder shall have the right, at such Holders option, to require the Issuer to repurchase all (or any portion of the principal amount thereof which is US$100,000 or any integral multiple thereof) of such Holders CARS at a price equal to the Early Redemption Amount. The date for such

Conversion Reset Pricing Period . . . . . . . . . . . . Qualifying Issue . . . . . . . . . . . . . . . . . . . . . . . . .

Relevant Stock Exchange . . . . . . . . . . . . . . . . .

Restrictive Covenants . . . . . . . . . . . . . . . . . . . .

Repurchase of CARS in the Event of Delisting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

repurchase shall be set by the Issuer, and shall not be less than 30 days nor more than 60 days following the date the Issuer informs the Holders of the Delisting. See Description of the CARS Repurchase of CARS in the Event of Delisting. Repurchase of CARS in the Event of Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

To the extent permitted by applicable law, unless the CARS have been previously redeemed, repurchased and cancelled or converted each Holder shall have the right, at such Holders option, to require the Issuer to repurchase all (or any portion of the principal amount thereof which is US$100,000 or any integral multiple thereof) of such Holders CARS at a price equal to the Early Redemption Amount upon the occurrence of a Change of Control (as defined herein). See Description of the CARS Repurchase of CARS in the Event of Change of Control. The CARS may be redeemed at the option of the Issuer, and subject to relevant Indian laws and regulations, in whole but not in part, at any time after October 11, 2011 but prior to the Maturity Date, at the Early Redemption Amount, 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. See Description of the CARS Redemption of CARS at Our Option. Unless the CARS have been previously redeemed, repurchased and cancelled or converted, the Issuer will redeem the CARS at 131.82% of their principal amount on the Maturity Date. The CARS may be redeemed at the option of the Issuer, and subject to relevant Indian laws and regulations, in whole but not in part, at the Early Redemption Amount, in the event of certain changes affecting taxes as specified in Description of the CARS Redemption for Taxation Reasons.

Redemption at the Option of the Issuer . . . . . . .

Redemption at Maturity . . . . . . . . . . . . . . . . . . .

Redemption for Taxation Reasons . . . . . . . . . .

Reserve Bank of India Approval Required for Redemption or Repurchase . . . . . . . . . . . . . . . .

Under current Reserve Bank of India (RBI) regulations applicable to convertible alternative reference securities, we are required to obtain the prior approval of the RBI before effecting any repurchase or redemption of the CARS prior to the Maturity Date. Rs.805.39 per Share, subject to certain adjustment. See Description of the CARS Adjustments to the extent permitted by Indian law and regulation.

SEBI Floor Price . . . . . . . . . . . . . . . . . . . . . . . .

Denomination, Form and Title of CARS . . . .

The CARS will be deliverable only in registered form and only in denominations of US$100,000 or any integral multiple thereof. The CARS will be represented by one permanent Global Security in definitive fully registered form without interest coupons. Except as described in this Offering Memorandum, interests in the Global Security will be shown on, and transferred only through, records maintained by Euroclear Bank S.A./N.V. (Euroclear) and Clearstream Banking, socit anonyme (Clearstream Luxembourg). Except in the limited circumstances described in this Offering Memorandum, individual certificates in respect of CARS will not be issued in exchange for interests in the Global Security. The CARS represented by the Global Security will bear relevant Securities Act legends and such CARS (or any beneficial interest therein) may not be transferred except in compliance with the transfer restrictions set forth in such legends. Shares (including Shares represented by ADSs) issued upon conversion of the CARS will be fully-paid and non-assessable and will, subject to listing, rank pari passu with the issued and outstanding Shares on the relevant Conversion Date (as defined herein). All such Shares that are issued and outstanding on the record date for any dividend that the Issuer may declare on the Shares will be entitled to the full amount of such dividend regardless of the period of time such Shares have been issued and outstanding. These Shares will not, however, be entitled to any rights as of any record date that precedes the relevant Conversion Date. QS means a qualifying security being a validly issued and enforceable instrument which may be in the form of: (i) a depositary receipt issued in respect of one Share on terms similar to those applying to the ADSs but which 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 shares pursuant to Indian delisting regulations; or (c) in order to allow holders to accept an offer by us to buy back 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 to the existing Shares), provided that in the case of a share with differential rights as to dividends, the rights to receive dividends with respect to such share shall be at least as favorable as the right to receive dividends with respect to our existing Shares, and

Transfer Restrictions on the CARS . . . . . . . .

Share Ranking . . . . . . . . . . . . . . . . . . . . . . . . . .

QSs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

provided that we obtain an opinion from an Independent Financial Institution (as defined herein) that in their opinion, based on the terms of the relevant share, when issued it is reasonably likely to be purchased and sold at prices which are determined by reference to the Shares; or (iii) a depositary receipt issued in respect of an equity share as set forth in subsection (ii), provided that we obtain an opinion from an Independent Financial Institution that in their opinion, based on the terms of the relevant share and depositary receipt, when issued it is reasonably likely to be purchased and sold at prices which are determined by reference to the Shares. ADSs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Issuer currently has ADSs in issue that are listed on the New York Stock Exchange and application will be made for any ADSs issued upon conversion of the CARS to be listed on the New York Stock Exchange. Each ADS represents one Share of the Issuer. The ADSs to be issued upon conversion of the CARS will be issued pursuant to the Deposit Agreement (as defined herein). There are limitations on redeposits of Shares that have been withdrawn from the ADS deposit facilities and on deposits of Shares acquired in the open market. See Description of the American Depositary Shares Issuance of ADSs upon Deposit of Shares and Withdrawal of Shares Upon Cancellation of ADSs. Holders of ADSs may exercise voting rights with respect to the Shares represented by ADSs only in accordance with the provisions of the Deposit Agreement and Indian law. Holders of ADSs are not entitled to attend or vote at shareholders meetings. A holder of ADSs may withdraw from the ADS facility the related underlying Shares and vote as a direct shareholder, but there may not be sufficient time to do so after the announcement of an upcoming vote. If requested by us, the Depositary will notify holders of ADSs of upcoming votes and arrange to deliver our voting materials to holders of ADSs. In such case, 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 the deposited securities as instructed by holders of ADSs. The Depositary will only vote as instructed and is not entitled to exercise any voting discretion. If the Depositary does not receive timely instructions from a holder of ADSs, the holder shall be deemed to have instructed the Depositary to give a discretionary proxy to a person designated by us, subject to the conditions set forth in the Deposit Agreement. If requested by us, the Depositary is required to represent all shares underlying the outstanding

Voting Rights of Holders of ADSs . . . . . . . . . .

ADSs, regardless whether timely instructions have been received from the holders of such ADSs, for the sole purpose of establishing a quorum at a meeting of shareholders. There are limitations on redeposits of withdrawn Shares under the Deposit Agreement. Moreover, registration of transfers of Shares may be refused in certain circumstances. See Description of the Shares Voting Rights and Transfer of Shares, Description of the American Depositary Shares Voting Rights and Indian Securities Market Takeover Code. Fungibility of ADSs Issued on Conversion with Existing ADSs . . . . . . . . . . . . . . . . . . . . . . . . . . Except as described above under the captions Share Ranking and ADSs, the ADSs issued on conversion of the CARS will be fungible (including with respect to trading and settlement) with the existing ADSs represented by the Master ADR and will trade and settle through the facilities of DTC under the same security identification numbers. 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. Offers and sales of the CARS offered in the offering and the QSs, Shares or ADSs issuable upon conversion of the CARS will be subject to certain restrictions described in Transfer Restrictions on the CARS and Plan of Distribution. Citibank, N.A., London Branch Citibank, N.A., London Branch Citigroup Global Markets Deutschland AG & Co., KGaA Euroclear system and Clearstream Banking, socit anonyme Citibank, N.A. Citibank, N.A., as common depositary for Euroclear and Clearstream, Luxembourg. The CARS and the Indenture (as defined herein) will each be governed by the laws of the State of New York. The Purchase Agreement and the Deposit Agreement are governed by New York law. The Issuer may from time to time without the consent of the Holders create and issue further securities having the same terms and conditions as the CARS in all respects so that such further issue shall be consolidated and form a single series with the CARS.

Restriction on Disposition of Securities . . . . . .

Trustee for the CARS . . . . . . . . . . . . . . . . . . . Paying and Conversion Agent for the CARS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Common Depositary for the CARS . . . . . . . . Depositary for the ADSs . . . . . . . . . . . . . . . . . . Depositary for the Global Security . . . . . . . . . . Governing Law . . . . . . . . . . . . . . . . . . . . . . . . .

Further Issues . . . . . . . . . . . . . . . . . . . . . . . . . . .

Listings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Approval into principle has been received for the listing of the CARS on the SGX-ST. If the listing is approved, the CARS will be traded on the SGX-ST in a minimum board lot size of US$200,000 for so long as the CARS are listed on the SGX-ST. The offering and settlement of the CARS are not conditioned on obtaining listing on the SGX-ST. The existing ADSs are listed on the New York Stock Exchange and application will be made to have ADSs deliverable upon conversion of the CARS listed on the New York Stock Exchange. We have undertaken to apply to have the 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. The only trading markets for the Shares are the BSE, the NSE and the Madhya Pradesh stock exchange. The Shares have been listed on the BSE since August 1959 and on the NSE since June 1998. We have announced our intention to pursue delisting of the Shares from the Madhya Pradesh stock exchange. The net proceeds from this offering, after deduction of underwriting fees, discounts and commissions but before deduction of other expenses relating to this offering, are expected to be approximately US$486.3 million, which we intend to use for capital expenditures, overseas investments, acquisitions and other purposes, as may be permitted under Indian law. The Issuer has agreed, subject to certain exceptions, not to issue or offer, sell, contract to sell any Shares or any securities convertible, exchangeable or exercisable for Shares (including any warrants), for a period of 90 days following the Closing Date, without the prior written consent of the initial purchasers.

Trading Market for the Shares . . . . . . . . . . . . . .

Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . .

Lock-Up Agreement . . . . . . . . . . . . . . . . . . . . .

10

RISK FACTORS This Section describes the risks that we currently believe may materially affect our business. You should carefully consider the following, in addition to any forward-looking statements and the cautionary statements contained elsewhere in this Offering Memorandum and the other information contained in this Offering Memorandum, before making any investment decision relating to the CARS and the QSs, Shares or ADSs deliverable 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 do not currently believe to be material could later turn out to be material. Whilst we would be making all reasonable efforts to mitigate or minimize these risks, one or more of a combination of these risks could materially 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. The demand for automobiles in the Indian market is influenced by factors including the growth rate of the Indian economy, increase in disposable income among Indian consumers, interest rates and fuel prices. There can be no assurance that the Indian economy will not experience a downturn, and weakening of economic activity. An increase in interest rates and/or increases in fuel prices are examples of developments that could lead to a decline in the demand for automobiles in the Indian market, which could significantly affect our sales and future results of 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 order to decrease our foreign exchange exposure and a weakening of the rupee against the dollar or other major foreign currencies may have an adverse effect on our cost of borrowing and consequently may increase our financing costs, 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 and gains on obligations denominated in foreign currencies in respect of our borrowings and foreign currency assets and liabilities due to currency fluctuations. While the rupee appreciation against the dollar in the recent past has contributed positively to our financial condition, any depreciation in the value of the rupee against the dollar may lead to adverse effects on our financial condition and results of operations during the current fiscal year and in future 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 of operations. The Indian automobile industry is highly competitive. We face strong competition in the Indian market from domestic as well as foreign automobile manufacturers, and competition from foreign competitors is likely to intensify further in the future. There can be no assurance that we will be able to implement our future strategies in 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 innovative products in a timely manner and maintaining such products competitiveness. In the competitive automotive industry, our competitors can gain significant advantage if they are able to offer products satisfying customer needs earlier than we are able to, which could adversely impact our sales and results of operations. Unanticipated delays in our proposed expansion plans resulting in delays in capacity 11

enhancements could adversely impact our results of operations. In addition, there can be no assurance that the market acceptance of our future products will meet our expectations, in which case we could be unable to realize the 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 supply defective products, parts, or related after-sales services, which could generate adverse publicity and adversely affect our business, results of operations and financial condition. Underperformance of our distribution channels and supply chains may adversely affect our sales and results of operations. We have selected and developed exclusive dealers across India and a network of distributors and local dealers in select international markets for distribution of our products and we believe that we provide adequate incentives 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 of operations. In addition, while we believe that we have a robust and efficient supply chain, we rely on some key vendors for some raw materials, parts and components used in the manufacture of our products. Our ability to procure these supplies in a cost effective and timely manner is subject to various factors, some of which are not always 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 the future 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 items used in manufacturing automobiles, including steel, rubber, copper, and zinc, etc are on the rise. While we have been pursuing various cost reduction programs to partially offset these price increases, there can be no assurance that we will be able to recover any future cost increases in commodity products through cost-saving measures elsewhere or that we will be able to increase the selling prices of our products, which could materially and adversely 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 the business and operations of subsidiaries and affiliates, to whom we make capital commitments, deteriorate our results 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 involve business risks, including unforeseen contingent risks or latent business liabilities that may only become apparent after the merger or acquisition is finalized, successful integration and management of the merged/acquired entity with us, retention of key personnel, joint sales and marketing efforts, management of a larger business and diversion of managements attention from other ongoing business concerns. If we are not able to manage these risks 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 are covered by our wage agreements with those labor unions which have different terms (typically three years) at different locations. In general, we consider our labor relations with all of our employees to be good. However, we 12

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 the provision of services. If work stoppages or lock-outs at our facilities or at the facilities of our major vendors occur or continue for a long period of time, our business, financial condition or results of operations may be adversely affected. Risk Associated with Political and Regulatory Risk Indias obligations under the World Trade Organization agreement. Indias obligation under its World Trade Organization agreement could lower the level of relatively high tariffs on imports of components and vehicles particularly with respect to cars in completely built units and/or completely 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 increase our 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 vehicle emission levels, noise, safety and levels of pollutants generated by our production facilities. These regulations are likely to become more stringent and the costs to comply with the same may significantly impact our future results of operations. Imposition of any additional taxes and levies by the Indian government designed to limit the use of automobiles could adversely affect the demand for our products and our results of operations. Regulations in the areas of investments, taxes and levies may also have an impact on Indian securities, including our Shares, QSs and ADSs. We may be adversely impacted by political instability, wars, terrorism, multinational conflicts, natural disasters, fuel shortages/prices, epidemics and labor strikes. Our products are exported to other geographical markets from India and we plan to expand our international operations, further in the future. As such, we are subject to various risks associated with conducting our business worldwide 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. Any significant or prolonged disruptions or delays in our operations related thereto could adversely impact our results of operations. Compliance with new and changing corporate governance and public disclosure requirements adds uncertainty to our compliance policies and increases our costs of compliance. Changing laws, regulations and standards relating to accounting, corporate governance and public disclosure, including the U.S. Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act), and new U.S. Securities and Exchange Commission regulations, Securities and Exchange Board of India (SEBI) regulations, NYSE listing rules and Indian stock market listing regulations, have increased complexity for us. These new or changed laws, regulations and standards may lack specificity and are subject to varying interpretations. Their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs of compliance as a result of ongoing revisions to such governance standards. In particular, our efforts to comply with Section 404 of the Sarbanes-Oxley Act and the related regulations regarding our required assessment of our internal controls over financial reporting and our independent accountants 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 efforts to comply with evolving laws, regulations and standards in this regard have resulted, and are likely to continue to result, in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. 13

Risks Associated with Investments in an Indian Company. Political changes in the Government in India could delay the further liberalization of the Indian economy and adversely 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 excise duty were derived from sales within India. Our business, and the market price and liquidity of our Shares, QSs and ADSs, may be affected by foreign exchange rates and controls, interest rates, changes in government policy, taxation, social and civil unrest and other political, economic or other developments in or affecting India. Since 1991, successive Indian Governments have pursued policies of economic liberalization, including significantly relaxing restrictions on the private sector. Nevertheless, the roles of the Indian central and state governments 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 coalition government has already committed to a common minimum agenda, there can be no assurance that there will not be changes in the economic reform, and specific laws and policies affecting automotive companies, foreign investment, currency exchange and investment regulations governing Indias capital markets that could negatively affect us. Uncertainty regarding possible policy changes immediately after elections has in the past resulted in significant volatility in price and trading volumes of securities of Indian companies. A significant change in Indias economic liberalization and deregulation policies could adversely affect business and economic conditions in India generally, and our business in particular, if new restrictions on the private sector are introduced or if existing restrictions are increased. Regional conflicts in Asia and other export markets could adversely affect the Indian economy and cause our business to suffer. The Asian region has from time to time experienced instances of civil unrest and hostilities among neighboring countries, and military hostilities and civil unrest in other Asian countries. Events of this nature in the future could influence the Indian economy and could have a material adverse effect on the market for securities 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 law govern 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 a company 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 as a 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 listed securities. The Indian stock exchanges, including the BSE, have experienced problems that, if they continue or recur, 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 by brokers. In addition, the governing bodies of the Indian stock exchanges have from time to time imposed restrictions 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 other regulatory bodies, which in some cases may have had a negative effect on market sentiment. 14

There is a lower level of regulation and monitoring of the Indian securities markets and the activities of investors, brokers and other participants than in some other countries. The Securities and Exchange Board of India, or SEBI, received statutory powers in 1992 to assist it in carrying out its responsibility for improving disclosure and other regulatory standards for the Indian securities markets. Subsequently, SEBI has prescribed regulations and guidelines in relation to disclosure requirements, insider dealing and other matters relevant to the Indian securities market. There may, however, be less publicly available information about Indian companies than 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 our directors and executive officers are residents of India and all or a substantial portion of our assets and the assets of such persons are located in India. As a result, it may not be possible for investors to (i) effect service of process upon us or such persons in jurisdictions outside of India or (ii) enforce against us or them judgments obtained in courts outside of India. India is not a party to any international treaty in relation to the recognition or enforcement of foreign judgments. Recognition and enforcement of foreign judgments is provided under Section 13 of the Code of Civil Procedure, 1908, or the Civil Code. Section 13 and Section 44A of the Civil Code provide that a foreign judgment shall be conclusive as to any matter thereby directly adjudicated upon except (i) where it has not been pronounced by a court of competent jurisdiction, (ii) where it has not been given on the merits of the case, (iii) where it appears on the face of the proceedings to be founded on an incorrect view of international law or a refusal to recognize the law of India in cases where Indian law is applicable, (iv) where the proceedings in which the judgment was obtained were opposed to natural justice, (v) where it has been obtained by fraud or (vi) where it sustains a claim founded on a breach 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 court in any country or territory outside India which the Government has by notification declared to be a reciprocating territory, it may be enforced in India by proceedings in execution as if the judgment had been rendered by the relevant court in India. However, Section 44A of the Civil Code is applicable only to monetary decrees not being in the nature of any amounts payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty. Any judgment of a court in a country that has not been declared by the Government of India to be a reciprocating territory for the purpose of Section 44A of the Civil Code may be enforced only by a suit upon the judgment and not by proceedings in execution. The suit must be brought in India within three years from the date of the judgment in the same manner as any other suit filed to enforce a civil liability in India. It is unlikely that a court 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 of damages awarded as excessive or inconsistent with Indian practice. A party seeking to enforce a foreign judgment in India is required to obtain approval from the Reserve Bank of India (RBI) to execute such a judgment or to repatriate outside India any amount recovered. Significant differences exist between Indian GAAP and other accounting principals, which may be material to the financial information contained in this Offering Memorandum. As stated in the report of our auditors included in this Offering Memorandum, the audited financial information 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 no attempt has been made to reconcile any of the information given in this Offering Memorandum to any other 15

principles or to base it on any other standards. Indian GAAP differs from accounting principles and auditing standards with which prospective investors may be familiar in other countries. Significant differences exist between Indian GAAP and other accounting principals, which may be material to the financial information contained in this Offering Memorandum. We have made no attempt to quantify the effect of any of those differences. In making an investment decision, investors must rely upon their own examination of us, the terms of 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 development of a market for the CARS, the ability of Holders to sell their CARS or the price at which Holders may be able to sell their CARS. Although approval in-principle has been received for the listing of the CARS on the SGX-ST, no assurance can be given that the CARS will be listed on SGX-ST or, if they are, that the CARS will continue to be listed for so long as they are outstanding. In addition, the CARS could trade at prices that may be lower than the initial market value thereof depending on many factors, including prevailing market interest rates, our operating results and the market for similar securities. The initial purchasers have no obligation to make a market in the CARS. In addition, the market for debt securities in emerging markets has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the CARS. There can be no assurance that the markets for the CARS, if any, will not be subject to similar disruptions. Any disruptions in these markets 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 structurally subordinated 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.25,535.6 million. The CARS will be effectively subordinated to any of our secured obligations with respect to the assets that secure such obligations. The terms of the CARS do not prevent us from incurring additional debt, subject to meeting certain covenants. See Description of CARS Certain Covenants. In addition, the CARS will be structurally subordinated to the existing and future indebtedness and other liabilities and obligations of our subsidiaries. Claims of creditors of such entities will have priority over the assets of such entities over us or our creditors, 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 of Default, 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 or the occurrence of an Event of Default (as defined herein) with respect to the CARS, the Holders may require us to repurchase or repay all (or a portion of) the CARS. See Description of the CARS Repurchase of CARS in the Event of Delisting. We may not be able to repurchase or repay all or any of the CARS if the requisite 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 Shares or ADSs. It is impossible to predict whether the price of the Shares or ADSs will rise or fall. Trading prices of the Shares or ADSs will be influenced by, among other things, our financial condition, results of operations and political, economic, financial and other factors. Any decline in the price of the Shares or ADSs may have an adverse affect on the market price of the CARS. 16

Fluctuations in the exchange rate between the rupee and the US dollar may have a material adverse effect on the 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 NSE and one other stock exchange in India, namely the Madhya Pradesh stock exchange. The ADSs are quoted in US dollars. The QSs will be quoted in US dollars. Our application for delisting is pending for confirmation with the Madhya Pradesh stock exchange. Any dividends in respect of the Shares will be paid in rupees and subsequently converted into US dollars for distribution to QS or ADS holders. Market prices for the QSs or ADSs may fall if the value of the rupee declines against the US dollar. In addition, the dollar amount of any cash dividends or other cash payments to holders of the QSs or ADSs would decline if the value of the rupee declines against the US dollar. ADS holders who seek to sell in India any Shares represented by ADSs issued upon conversion of the CARS or any Shares withdrawn upon surrender of any such ADS, and to convert the rupee proceeds of such sale into foreign currency and remit such foreign currency from India, will require the approval of the RBI for each such transaction (unless such Shares are sold on a stock exchange in India on which the Shares are listed). A delay 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 and may substantially fluctuate in the future. On an annual average basis, the rupee declined against the US dollar since 1980. 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 March 31, 2005 and Rs.44.48 = US$1.00 on March 31, 2006, respectively. During fiscal 2007, the rupee once again appreciated against the US dollar, ending at an exchange rate of Rs.43.10 = US$1.00 on March 30, 2007, the last business 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 thereby may suffer future dilution of their ownership position. Under the Indian Companies Act 1956, a company incorporated in India must offer its holders of equity shares pre-emptive rights to subscribe and pay for a proportionate number of shares to maintain their existing ownership percentages prior to the issuance of any new equity shares, unless the pre-emptive rights have been waived by adopting 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 ADSs unless a registration statement under the U.S. Securities Act of 1933, as amended, is effective with respect to the rights or an exemption from the registration requirements of the Securities Act is available. Our decision to file a registration statement will depend on the costs and potential liabilities associated with any given registration statement as well as the perceived benefits of enabling the owners of our ADSs to exercise their preemptive rights and any other factors that we deem appropriate to consider at the time the decision must be made. We may elect not to file a registration statement related to pre-emptive rights otherwise available by law to our shareholders, and there may not be an available exemption from those registration requirements that would enable U.S. owners of ADSs to otherwise participate. In the case of future issuances subject to pre-emptive rights, the new securities may be issued to the Depositary, which may sell the securities for the benefit of the owners of ADSs. The value, if any, the Depositary would receive upon the sale of those securities cannot be predicted. To the extent that owners of ADSs are unable to exercise pre-emptive rights granted in respect of the equity 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 or the ADSs and may dilute your holdings. Any future issuance of Shares could adversely affect the market price of the Shares. In addition, the future issuance of Shares by us or the disposal of Shares by any of our major shareholders or the perception that such 17

issuance or sales may occur may significantly affect the trading price of the CARS, the Shares, the QSs and the ADSs. We have, subject to certain exceptions, agreed to certain restrictions on issuances of Shares or securities convertible, 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, and there 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 those rights. Although holders of ADSs have a right to receive any dividends declared in respect of Shares underlying the ADSs, they cannot exercise voting or other direct rights as a shareholder with respect to the Shares underlying the ADSs evidenced by ADRs. Citibank, N.A., as depositary is the registered shareholder of the deposited shares underlying our ADSs, and therefore only the Depositary can exercise the rights of shareholders in connection with the deposited shares. Only if requested by us, the Depositary will notify holders of ADSs of upcoming votes and 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 the deposited securities as instructed by the holders of ADSs. If voting instructions are received timely by the Depositary from a holder of ADSs which fail to specify the manner in which the Depositary is to vote the shares underlying such holders ADSs, such holder will be deemed to have instructed the Depositary to vote in favor of the items set forth in such voting instructions. If the Depositary has not received timely instructions from a holder of ADSs, the holder shall be deemed to have instructed the Depositary to give a discretionary proxy to a person designated by us, subject to the conditions set forth in the deposit agreement. If requested by us, the Depositary is required to represent all shares underlying ADSs, regardless whether timely instructions have been received from the 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 our accounting books and records, or exercise appraisal rights. Registered holders of our shares withdrawn from the depositary arrangements will be entitled to vote and exercise other direct shareholder rights in accordance with Indian law. However, a holder may not know about a meeting sufficiently in advance to withdraw the underlying shares in time. Furthermore, a holder of ADSs may not receive voting materials, if we do not instruct the Depositary to distribute such materials, or may not receive such voting materials in time to instruct the Depositary to vote. See Description of the Shares Voting Rights and Transfer of Shares, Description of 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 may develop for QSs may not be liquid. There are currently no QSs outstanding. Following the commencement of the Conversion Period on October 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 as provided in the definition of Qualifying Issue. Notwithstanding this, there may not be liquid trading market for QSs which may make it difficult for investors to sell QSs at an acceptable price, or at all. If an active trading market for the QSs were to develop, the QSs could trade at prices that may be lower than their price immediately following conversion of the CARS. Whether or not the QSs will trade at lower prices to the QSs on conversion depends on many factors, including: the Companys financial condition, financial performance and future prospects; the general economic and political conditions and the condition of the industry in which the Company operates; 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 Stock Exchange, the Luxembourg Stock Exchange, the SGX-ST, the Tokyo Stock Exchange or any other exchange that may be approved by an Independent Financial Institution, no assurance can be made that such a listing or admission will be obtained. 18

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 to the ADSs, Holders will 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 upon certain conditions. If QSs are in the form of non- or differential- voting equity shares issued by us or depositary receipts in respect of such non- or differential- voting shares, Holders will have differential rights as to voting (in comparison 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 are restrictions on the deposit of Shares into our ADS facilities. ADSs issued by companies in certain emerging markets, including India, may trade at discount to the underlying equity shares, in part because of the restrictions on foreign ownership of the underlying equity shares and in part because ADSs are sometimes perceived to offer less liquidity than underlying shares which can be traded freely in local markets by both local and international investors. See Foreign Investment and Exchange Controls. ADSs could trade at a discount to the market price of the underlying Shares.

19

MARKET PRICE INFORMATION Our Shares are listed on the Stock Exchange, Mumbai, which is also referred to as the Bombay Stock Exchange, Mumbai or the BSE, and the National Stock Exchange of India, or NSE. They are also listed and traded on one other Indian stock exchange, namely the Madhya Pradesh stock exchange, from which we have applied 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 average volume of trading activity on the BSE for our Shares and (ii) the high and low closing prices of the our outstanding ADSs on the New York Stock Exchange. On July 6, 2007, the closing price of our Shares on the BSE was Rs. 710.60 per Share and the closing price of our ADSs on the New York Stock Exchange was US$17.59 per ADS.
Average Daily Trading Volume of Closing Price per Shares on BSE Existing ADSs (in thousands of shares) Period Period Period Period High Low High Low (Rs. per Share) (US$ per ADSs) Closing Price per Share

1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Third Quarter (through July 6) . . . . . . . . . . . . . . . . . . . . Source: Bloomberg 20

320.75 316.50 258.30 112.15 169.85 146.66 157.00 164.65 169.85 452.30 167.20 202.45 307.35 452.30 563.25 563.25 524.75 435.85 512.10 659.50 520.10 449.25 545.20 659.50 985.35 939.00 985.35 898.00 911.75 964.55 766.90 710.60

93.55 129.50 68.65 58.85 99.55 99.55 119.35 123.95 129.15 150.20 150.50 150.20 199.95 312.90 366.55 316.80 366.55 372.95 392.60 406.20 407.85 406.20 426.75 460.80 617.45 617.45 659.90 658.05 802.20 715.10 641.35 684.05

1,600.71 2,063.34 898.54 1,083.04 750.45 815.15 802.56 653.82 731.37 594.26 513.89 558.50 1,155.41 2,606.97 2053.27 2728.26 2098.56 2341.17 1050.03 681.30 879.91 532.24 561.71 763.68 555.79 772.76 620.93 473.04 361.52 303.60 360.06 199.71

11.92 9.15 11.92 14.27 12.06 10.38 12.41 14.27 21.96 21.46 21.96 19.50 20.83 22.10 19.09 17.59

8.73 8.75 8.73 9.25 9.40 9.25 9.68 10.44 13.93 13.93 14.91 14.27 17.92 16.21 15.94 16.64

EXCHANGE RATES AND EXCHANGE CONTROLS The following table sets forth, for the periods indicated, information with respect to the exchange rate between the rupee and the US dollar (in rupees per US dollar) based on the noon buying rate for cable transfers as certified for customs purposes by the Federal Reserve Bank of New York. On an average annual basis, the rupee consistently declined against the US dollar from 1980 until 2002. In early July 1991, the Indian Government adjusted the rupee downward by an aggregate of approximately 20% against the US dollar as part of an economic package designed to overcome an external payment crisis. In 1994, the rupee was permitted to float fully for the first time. The exchange rate as of July 6, 2007 was Rs. 40.36 = US$1.00. No representation is made that the rupee amounts actually represent such US dollar amounts or could have been or could be converted into US dollars at the rates indicated, any other rate or at all.
Year Period End Period Average High Low

2002 2003 2004 2005 2006 2007

................................................... ................................................... ................................................... ................................................... ................................................... January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . February . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . March . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . April . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . May . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . June . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . July (through July 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

48.00 45.55 43.27 44.95 44.11 44.07 44.08 43.10 41.04 40.36 40.58 40.36

48.63 46.59 45.26 44.00 45.17 44.21 44.02 43.79 42.02 40.57 40.59 40.38

49.07 48.10 46.45 46.26 46.83 44.49 44.21 44.43 43.05 41.04 40.90 40.42

47.96 45.29 43.27 43.05 43.89 44.07 43.87 42.78 40.56 40.14 40.27 40.34

Source:

Federal Reserve Bank of New York

21

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

22

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$40,000,000 aggregate principal amount to be issued in connection with the exercise in full of the over-allotment option described elsewhere in this Offering Memorandum). This table should be read in conjunction with our non-consolidated financial statements, the related notes and the other financial information contained elsewhere in this Offering Memorandum.
As at March 31, 2007 Actual As Adjusted Rs. US$(7) Rs. US$(7) (amounts in millions)

Short-Term Debt(1) Total short-term debt (including current portion of long-term debt) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,942.5 Long-Term Debt(1) Secured and guaranteed debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Secured and unguaranteed debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,502.0 Unsecured and unguaranteed debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,646.9 Unsecured and guaranteed debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,148.9 Total long-term debt Shareholders Funds Total share capital: Ordinary shares, par value Rs.10; 450,000,000 shares authorized, 385,373,885 shares subscribed and outstanding(2)(3) . . . . . . . . . . . . Securities premium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Distributable Reserves(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Undistributable Reserves(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total shareholders funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total capitalization(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

389.6 126.5 405.8 532.3

16,942.5

389.6

5,502.0 126.5 38,957.0 895.8 44,459.0 1,022.3

3,854.1 88.6 3,854.1 88.6 19,364.0 445.2 19,364.0 445.2 44,485.0 1,022.9 44,485.0 1,022.9 994.4 22.9 994.4 22.9 68,697.5 1,579.6 68,697.5 1,579.6 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 statements included 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 be available 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 since March 31, 2007 until the date of this Offering Memorandum.

23

SELECTED REFORMATTED CONSOLIDATED HISTORICAL FINANCIAL AND OTHER INFORMATION The following selected data should be read in conjunction with our audited consolidated financial statements and schedules thereto included elsewhere in this Offering Memorandum. The selected income statement data and balance sheet data set forth below have been extracted and/or derived from our consolidated financial statements and 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 format from our audited consolidated financial statements. This reformatting generally involves changes in the description or classification of certain amounts from those shown in our audited 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 to information prepared in accordance with Indian GAAP or other accounting principles.
2005 For the Year Ended March 31,(1) 2006 2007 2007 (in Rs. millions) (in US$ millions)

Income Statement Data Net Revenue(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196,950.9 240,129.7 Expenditure: Raw Materials and Components(3) . . . . . . . . . . . . . . . . . . . . 137,912.3 166,333.4 Salaries and Related Costs(4) . . . . . . . . . . . . . . . . . . . . . . . . . 14,339.8 17,831.2 Expenses for Manufacturing, Administration and Selling(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,155.4 28,899.5 Excise Duty on Stock-in-trade . . . . . . . . . . . . . . . . . . . . . . . 128.9 330.0 Changes in Stock in Trade and Work in Progress . . . . . . . . . (2,176.5) (2,386.5) Expenditure Transferred to Capital and Other Accounts(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,673.8) (3,795.8) 170,686.1 207,211.8 Profit Before Amortization, Depreciation, Interest, Exceptional Items and Tax . . . . . . . . . . . . . . . . . . . . . . . . . . 26,264.8 32,917.9 Product development expenditure . . . . . . . . . . . . . . . . . . . . . . . 671.2 717.7 Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,310.1 6,233.1 Interest (Net)(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,696.6 2,460.1 Amortization of Miscellaneous expenditure in Subsidiaries . . 29.3 0.2 Profit for the Year Before Exceptional Items and Tax . . . . . . . 18,557.6 23,506.8 Exceptional Items(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (76.7) (17.0) Profit Before Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,480.9 23,489.8 Tax Expense(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,906.2) (6,400.0) Net Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,574.7 17,089.8 Adjustment of Miscellaneous Expenditure in Subsidiaries . . . (37.8) (25.3) Share of Minority Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (84.8) (222.9) Share of Profit in respect of Investments in Associate Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401.3 439.3 Profit for the Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,853.4 17,280.9

325,795.9 228,529.1 24,155.3 41,158.0 775.0 (4,112.6) (7,399.1) 283,105.7 42,690.2 850.2 6,880.9 4,058.1 5.2 30,895.8 (14.4) 30,881.4 (8,832.1) 22,049.3 (1.4) (742.2) 394.2 21,699.9

7,494.7 5,257.1 555.7 946.9 17.8 (94.6) (170.2) 6,512.7 982.0 19.6 158.3 93.4 0.1 710.6 (0.4) 710.2 (203.2) 507.0 * (17.1) 9.1 499.0

24

2005

As at March 31,(1) 2006 2007 (in Rs. millions)

2007 (in US$ millions)

Balance Sheet Data Current Assets: Cash and Bank balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,973.2 13,864.4 11,542.7 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,620.4 24,810.4 31,669.0 Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,414.0 13,544.8 17,022.2 Loans and Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,472.7 58,284.0 97,828.3 Interest Accrued on investments . . . . . . . . . . . . . . . . . . . . . 61.3 64.9 62.7 Total Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,541.6 110,568.5 158,124.9 Current Liabilities and Provisions . . . . . . . . . . . . . . . . . . . . . . (70,411.7) (78,190.7) (88,654.0) Net Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,129.9 32,377.8 69,470.9 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,263.6 12,615.0 11,745.9 Fixed Assets: Gross Fixed Assets(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,416.2 102,794.9 129,408.3 Less Accumulated Depreciation . . . . . . . . . . . . . . . . . . . . . 37,593.3 48,435.6 54,266.5 Net Fixed Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,822.9 54,359.3 75,141.8 Goodwill (on consolidation) . . . . . . . . . . . . . . . . . . . . . . . . . . 516.2 4,122.1 4,430.1 Miscellaneous Expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . 216.9 139.1 119.3 Total Assets (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,949.5 103,613.3 160,908.0 Loan Funds: Secured Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unsecured Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred Tax Liability (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . Minority Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shareholders Funds: Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reserves and Surplus(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total Funds Employed . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,767.0 21,375.0 27,142.0 6,205.4 630.5 8,816.2 24,975.2 33,791.4 6,767.9 1,739.3 44,626.5 28,392.5 73,019.0 8,172.7 2,499.6

265.5 728.5 391.6 2,250.5 1.4 3,637.5 (2,039.3) 1,598.2 270.2 2,977.0 1,248.4 1,728.6 101.9 2.7 3,701.6 1,026.5 653.2 1,679.7 188.1 57.5 88.7 1,687.6 1,776.3 3,701.6

3,617.9 3,828.7 3,854.1 40,353.7 57,486.0 73,362.6 43,971.6 61,314.7 77,216.7 77,949.5 103,613.3 160,908.0

2005

As at or for the Year Ended March 31, 2006 2007 2007

Other Data Adjusted EBITDA (in Rs. millions/US$ millions)(11) . . . . . . . Adjusted EBITDA/Net revenues less other income (%)(12) . . . Adjusted EBITDA/Gross Interest(x)(13) . . . . . . . . . . . . . . . . . . Earnings Per Share(14) Basic (Rs./US$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted (Rs./US$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total debt/Adjusted EBITDA(x) . . . . . . . . . . . . . . . . . . . . . . . Net debt/Total Capital(x)(15) . . . . . . . . . . . . . . . . . . . . . . . . . . .

24,254.2 12.4 10.1 38.50 36.07 1.12 0.09

29,765.0 12.5 9.5 45.86 43.15 1.14 0.22

40,308.2 12.4 8.3 56.43 53.54 1.81 0.42

927.2 12.4 8.3 1.30 1.23 1.81 0.42

25

(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 and became applicable in fiscal 2005, and has been debited to Securities Premium Account (SPA) as compared to our past practice of providing premium on a pro-rata basis and debiting to SPA. As a result, the debit to SPA increased by Rs. 2,530.9 million. SPA forms 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 difference as 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 by excise 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 financial 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 and expenditure 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 capital account and interest received on bank and other accounts as set forth in Schedule 14 (Note B-1) on page F-81 of our audited consolidated financial 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 Loss Account 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 audited consolidated 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 discounting charges paid as set forth on Schedule 14 (Note B-1) on page F-81 of our audited consolidated financial statements included elsewhere in this Offering Memorandum. (14) Refer to Schedule 14 (Note B-3) on page F-87 of our audited consolidated financial statements included elsewhere in this Offering Memorandum. (15) Net debt has been computed by subtracting cash and bank balance from Total Debt. Total capital is total funds employed without considering 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) for the period April 1, 2005 to March 31, 2006, of INCAT International Plc. (INCAT) for the period October 3, 2005 to March 31, 2006, of Tata 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 ended March 31, 2007 include the results of the operations of each of TFL, INCAT, TTL Thailand and TTPL Singapore for the entire year. As a result, the financial results for the years ended March 31, 2007, March 31, 2006, and March 31, 2005 are not comparable to this extent.

26

SELECTED REFORMATTED NON-CONSOLIDATED HISTORICAL FINANCIAL AND OTHER INFORMATION The following selected data should be read in conjunction with our audited non-consolidated financial statements and schedules thereto included elsewhere in this Offering Memorandum. The selected income statement 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-consolidated financial 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 format from our audited non-consolidated financial statements for the three years ended March 31, 2007. This reformatting generally involves changes in the description or classification of certain amounts from those shown in 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 to information prepared in accordance with Indian GAAP or other accounting principles.
2005 For the Year Ended March 31,(1) 2006 2007 (in Rs. millions) 2007 (in U.S.$ millions)

Income Statement Data Net Revenue(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenditure Raw Materials and Components(3) . . . . . . . . . . . . . . . . . . . . . . . Salaries and Related Costs(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expenses for Manufacturing, Administration and Selling(5) . . . Excise Duty on Stock-in-trade . . . . . . . . . . . . . . . . . . . . . . . . . . Changes in Stock in Trade and Work in Progress . . . . . . . . . . . Expenditure Transferred to Capital and Other Accounts(6) . . . . Profit Before Depreciation, Interest, Exceptional Items and Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Product Development Expenditure . . . . . . . . . . . . . . . . . . . . . . . Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest (Net)(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit for the Year Before Exceptional Items and Tax . . . . . . . Exceptional Items(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit Before Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax Expense(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net Profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

176,091.1

209,425.7

277,804.3

6,390.7

124,851.4 148,895.6 201,987.2 4,646.6 10,433.8 11,471.7 13,678.3 314.6 21,011.7 25,746.6 35,057.1 806.4 84.1 321.8 759.9 17.5 (1,440.0) (2,569.1) (3,496.8) (80.3) (2,181.3) (3,088.5) (5,770.5) (132.7) 152,759.7 180,778.1 242,215.2 5,572.1 23,331.4 671.2 4,501.6 1,541.5 16,617.1 (98.1) 16,519.0 (4,149.5) 12,369.5 28,647.6 737.8 5,209.4 2,263.5 20,436.9 96.9 20,533.8 (5,245.0) 15,288.8 35,589.1 850.2 5,862.9 3,130.7 25,745.3 (13.5) 25,731.8 (6,597.2) 19,134.6 818.6 19.5 134.8 72.0 592.3 (0.4) 591.9 (151.8) 440.1

27

2005

As at March 31,(1) 2006 2007 (in Rs. millions)

2007 (in U.S.$ millions)

Balance Sheet Data Current Assets: Cash and bank balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,050.4 11,194.3 8,267.6 190.2 Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,013.6 20,122.4 25,009.5 575.3 Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,985.8 7,166.0 7,821.8 179.9 Loans and Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,492.6 56,333.8 60,259.9 1,386.3 Interest accrued on investments . . . . . . . . . . . . . . . . . . . . . . . . . 61.2 61.6 59.4 1.4 Total Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69,603.6 94,878.1 101,418.2 2,333.1 Current Liabilities and Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . (64,150.0) (69,418.6) (73,577.7) (1,692.6) Net Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,453.6 25,459.5 27,840.5 640.5 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,120.6 20,151.5 24,770.0 570.0 Fixed Assets Gross Fixed Assets(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,507.9 89,227.4 112,891.2 2,596.9 Less 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 1,470.9 Miscellaneous 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unsecured Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred Tax Liability (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Shareholders Funds: Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Reserves and Surplus(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total Funds Employed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,898.1 20,056.1 24,954.2 5,652.8 3,617.9 37,496.0 41,113.9 71,720.9 8,227.6 21,140.8 29,368.4 6,225.4 3,828.7 51,542.0 55,370.7 90,964.5 20,220.4 19,871.0 40,091.4 7,868.3 3,854.1 64,843.4 68,697.5 116,657.2 465.2 457.1 922.3 181.0 88.7 1,491.7 1,580.4 2,683.7

As at or for the Year Ended March 31, 2005 2006 2007 2007

Other Data Adjusted EBITDA (in Rs. millions/US$ millions)(11) . . . . . . . . . . . Adjusted EBITDA/Net revenue less other income (%)(12) . . . . . . . Adjusted EBITDA/Gross Interest (x)(13) . . . . . . . . . . . . . . . . . . . . . Earnings Per Share(14) Basic (Rs./US$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diluted (Rs./US$) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total debt/Adjusted EBITDA(x) . . . . . . . . . . . . . . . . . . . . . . . . . . . Net debt/Total Capital(x)(15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

20,999.3 12.0 9.5 34.38 32.23 1.19 0.07

25,019.0 12.1 8.4 40.57 38.20 1.17 0.21

32,287.0 11.7 8.3 49.76 47.24 1.24 0.29

742.7 11.7 8.3 1.14 1.09 1.24 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 and became applicable in fiscal 2005, and has been debited to Securities Premium Account (SPA) as compared to our past practice of providing premium on a pro-rata basis and debiting to SPA. As a result, the debit to SPA increased by Rs. 2,530.9 million. SPA forms 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 difference as 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 the Profit and Loss Account, which is included in the Companys audited non-consolidated financial statements included elsewhere in this Offering Memorandum, as reduced by the excise duty amounting Rs.43,494.5 millions, Rs. 33,479.5 millions and Rs.30,359.8 millions 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. 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 Companys 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 Companys 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 Companys audited non-consolidated financial 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 and expenditure 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 capital account and interest received on bank and other accounts and increased by discounting charges paid as set forth in Schedule -14 (Note B-4) on page F-34 of the Companys 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 of Rs. 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 Schedule A to the Profit and Loss Account on page F-6 of the Companys audited non-consolidated financial statements included elsewhere in this Offering Memorandum. (12) Calculated as Adjusted EBITDA divided by Net Revenue less Dividend and Other Income as detailed in Schedule A to the Companys audited 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 Loans plus other Interest and increased by discounting charges paid as set forth on Schedule 14 (Note B-4) on page F-34 of the Companys audited non-consolidated financial statements included elsewhere in this Offering Memorandum. (14) Refer to Schedule 14 (Note B-7) on Page F-38 of the Companys audited non-consolidated financial statements included elsewhere in this Offering Memorandum. (15) Net debt has been computed by subtracting cash and bank balances from Total Debt. Total capital is total funds employed without considering 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 Tata Finance Limited (TFL), Telco Dadajee Dhackjee Ltd (TDDL) and Suryodaya Capital Finance (Bombay) Ltd (SCFL). The comparative figures for the year ended March 31, 2005 do not include the results of the operations of TFL, TDDL and SCFL. As a result, the financial results for the years ended March 31, 2006 and March 31, 2007 are not comparable to this extent to the financial results for the year ended March 31, 2005.

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INDUSTRY AND REGULATION The information presented in this section has been extracted from publicly available documents, including market 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 for Monitoring Indian Economy or CMIE (Monthly Review of Indian Economy June 2007). The industrial sector and services sectors grew by 10.9% and 11%, respectively, during fiscal 2007, compared to 9.6% and 9.8% in fiscal 2006. Industrial growth was mainly driven by the manufacturing sector, which registered 12.3% growth during fiscal 2007 as against 9.1% growth registered in fiscal 2006. The agricultural sector grew by 2.7% during fiscal 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 second quarter, 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 the previous fiscal year. In an aggressive move to contain inflation within 5 to 5.5%, RBI increased the repo rate by 1.25% and CRR by 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 has hindered the expansion of the road transport sector and the automotive industry. The government is taking steps to improve the road infrastructure in the country. The 5,846 kilometer Golden Quadrilateral, which is a part of the ongoing road development program in India, was 95% completed as of February 2007. A substantial impact of the road development on the economy is already noticeable. In addition to Phases I, II and III of the National Highway 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 three plans. The project commenced during fiscal 2006 and is targeted to be completed by fiscal 2015. Further road development would make the benefits of faster movement of goods and people accessible to a larger portion of the Indian population. The Indian Automotive Market Indias 50-year old automotive industry has a prominent place in the Indian economy. With its integral relationship to several key segments of the Indian economy, the Indian automobile industry affects many other important sectors of the Indian economy and is one of the main drivers of Indias economic growth. The Indian auto industry is one of the largest industrial sectors in India, with a turnover that contributes to roughly 5% of Indias gross domestic product. The Indian automobile industry contributes nearly 17% to total indirect taxes and provides direct and indirect employment to over two million and ten million people respectively. The Indian automotive industry plays a pivotal role in the countrys rapid economic and industrial development, with its wide variety of passenger and commercial vehicles. Until the mid-1990s, the auto sector in India had been a relatively protected industry with limits on the entry of foreign companies through import tariffs. Today, as part of a broader move to liberalize its economy, India has opened up the sector to foreign 30

direct investments and has since progressively relaxed trade barriers. Since the liberalization of the Indian auto sector the industry has experienced rapid development. Today, India is the worlds second largest manufacturer of two wheelers, fifth largest manufacturer of commercial vehicles and the largest manufacturer of tractors in the world. 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 vehicular engine manufacturers in India. Indias auto market is one of the most competitive markets amongst the global markets, 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, utility vehicles and multi purpose vans were produced in fiscal 2007, representing 14% of vehicles produced. In addition, nearly 0.5 million commercial vehicles were manufactured, constituting 4.7% of total vehicle production. The International Organization of Motor Vehicle Manufacturers, or OICA, ranked India as 11th in passenger cars production in 2005. Presently, car penetration in India is estimated to be low at 7 cars per 1,000 persons 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 the previous fiscal year, and 1 million automobiles were exported from India, an increase of 25.4% over the previous fiscal year. The Indian automotive industry, after experiencing a slowdown in growth rate last year, bounced back this year with a growth of 21.4% to post strong volumes in all segments. Rising input costs and retail incentives 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 was favorably impacted by a reduction of the excise duty on small cars in the previous years union budget (from 24% to 16% for cars of up to 4 meters in length and with engine displacement of less than 1200 c.c. for petrol and 1500 c.c for diesel) and increased consumer spending. Total passenger car exports of over 198,000 units were 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 fiscal 2007, with an impressive growth rate of 33% from the previous fiscal year, buoyed by increased industrial activity and continued investment in road infrastructure. Inflationary concerns during the year have prompted an increase in interest rates, which impacted commercial vehicles sales in the last few months of the current fiscal year. 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 to approximately 355,000 vehicles in the year ended March 31, 1991 and rose approximately fifteen fold to approximately 1,576,000 vehicles in the year ended March 31, 2005. Since then, this number has risen to approximately 1,710,000 vehicles in the year ended March 31, 2006 and approximately 2,095,800 vehicles for the year ended March 31, 2007. Regulation Indian Automotive Sector Indias 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, vehicle kits were imported into and assembled in India. The commercial vehicle manufacturing sector achieved a high rate of growth during Indias economic expansion in the 1960s and 1970s. Rail transport bottlenecks led to higher demand for road transport and this sector was permitted to grow with the minimum intervention of the 31

government. Major domestic commercial vehicle manufacturers invested in expanding production facilities and product development, which resulted in an efficient and relatively technologically advanced commercial vehicle industry, 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 Automobiles Limited, respectively, dominated the market until the mid 1980s. Passenger cars were deemed to be luxury products and were subject to very high multiple taxation and price controls. In addition, industrial licensing and exchange control regulations forced domestic car manufacturers to embark on low-volume, high-cost indigenous and in-house component production programs. Demand for passenger cars exceeded supply, but the domestic passenger car industry remained protected by the prohibition on car imports and remained technologically behind global standards. However, the establishment of Maruti Udyog Limited, or Maruti, a joint venture between the Suzuki Motor Company of Japan and the Government of India in the mid-1980s paved the way for expansion of the 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 Indian Government deregulated and liberalized the automotive market in the early 1990s that the countrys passenger car market showed substantial growth. Nonetheless, India continues to have a substantially lower number of passenger 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 as well 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 still remain relatively high. See Import Regulations and Duties below. Consequently, domestic manufacturers have historically dominated the automotive industry in India, although a number of domestic manufacturers have sought to improve product quality by entering into joint ventures, technology transfer agreements or licensing agreements with foreign vehicle and component manufacturers. The industry has, historically, also been subject to high excise duty rates, and even today cars and UVs are subject to the highest excise rates with the exception of small cars. See Excise Duty. Fluctuations in these taxes directly impact retail sales prices and, consequently, the level of demand. Sales tax in various states has been recently rationalized. Unlike more developed countries, the automotive industry in India until the late 1980s had not been subject to stringent emission or vehicle safety regulations, but this trend is changing with Bharat Stage III (equivalent to Euro 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, or NCR, of Delhi and the State of Maharashtra), automotive (both commercial as well as passenger) vehicles in India are typically kept in use much longer than in more developed countries. Commercial vehicles are also subject to overload abuse. Since 1980, Indias automotive industry has experienced rapid structural transformation and growth. Progressive easing of import controls, reduction in governmental restrictions on product categories and the rationalization of excise duties (including the introduction of modified value added tax, or MODVAT, and central 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 of products and greater competition. The passenger vehicle market has experienced significant growth over the last few 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 significant consolidation, both amongst vehicle manufacturers and component vendors with a view to achieving economies of scale, product synergies and strong brand presence. By contrast, there has been little or no consolidation in either vehicle or component manufacturing in India. The sizes of domestic automotive manufacturers, especially for passenger vehicles, are small compared to global standards. Consequently, economies of scale in manufacturing have generally eluded Indian manufacturers of automotive vehicles and automotive components. 32

The component industry, which until recently was to a large extent reserved for the small-scale sector, continues to be fragmented, with a number of enterprises with limited funds and technology, though this situation has improved in recent years. The Indian automotive industry has, therefore, differed from the global model, but as entry barriers in India are lowered, we believe that both vehicle and component manufacturers are likely to consolidate their operations to achieve the levels of competitiveness and scale economies closer to those in major international markets. Globally known branded products, supported by high levels of promotional spending, are likely 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 in April 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 in force in rest of India. Our vehicles comply with these norms. The next change in emission regulations is currently expected to be implemented by fiscal 2010, when the 11 major cities currently subject to Bharat Stage III norms are expected to move to Bharat Stage IV norms (equivalent to Euro IV norms) and rest of India to Bharat Stage III norms. Our vehicle exports to Europe comply with Euro IV norms, and we believe our vehicles also comply with the various safety regulations in effect in the other international markets we operate in. We are also working on meeting 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 International standards in order to facilitate sustained growth of the Indian automobile industry as well as to make India a large exporter of automobiles. India has a well established regulatory framework administered by the Indian Ministry of Shipping, Road Transport and Highways. The ministry issues notifications under the Central Motor Vehicles Rules and the Motor Vehicles Act. Chapter V of the Central Motor Vehicles Rules, 1989 deals with construction, equipment and maintenance of vehicles. Vehicles being manufactured in the country have to comply with relevant Indian standards and automotive industry standards. The Indian Ministry of Shipping, Road Transport and Highways finalized a road map on automobile safety standards in January 2002. The road map is based on current traffic conditions, traffic density, driving habits and road user behavior in India and is generally aimed at increasing safety 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 small cars from 24% to 16%. Small cars are defined to mean cars of length not exceeding 4,000 mm and with an engine capacity not exceeding 1,500 cc for cars with diesel engines and not exceeding 1,200 cc for cars with gasoline engines. 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 tax collected by them on behalf of the government, thereby eliminating the cascading effect of taxation. Two main brackets of 4% and 12.5%, along with special brackets of 0%, 1% and 20%, have been announced for various categories 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 prositive impact on us.

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Import Regulations and Duties Automobiles and automotive components can, generally, be imported into India without a license from the Indian government subject to their meeting Indian standards and regulations as specified by designated testing agencies. Recent government liberalization policies have led to a reduction in import duties on vehicles and certain automotive parts. Insurance Coverage The Indian insurance industry is predominantly state-owned and insurance tariffs are regulated by the Indian Insurance Regulatory and Development Authority. We have insurance coverage that we consider reasonably sufficient to cover all normal risks associated with our operations and that we believe is in accordance with industry standards in India. We have obtained Business Interruption (Loss of Profit) cover. We have also obtained coverage for product liability for some of our vehicle models in several countries to which we export vehicles. Moreover, we have taken insurance coverage on directors and officers liability to minimize risks associated 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 Indian Companies Act VII of 1913 as Tata Locomotive and Engineering Company Limited. Our name was changed to Tata Engineering and Locomotive Company Limited on September 24, 1960 and to Tata Motors Limited on July 29, 2003. We commenced operations as a steam locomotive manufacturer. This business was discontinued in 1971. Since 1954, we have been manufacturing automotive vehicles. This business commenced with the manufacture of commercial vehicles under financial and technical collaboration with Daimler-Benz AG (now DaimlerChrysler AG) of Germany. This agreement ended in 1969. Since then, we have been developing and manufacturing all our automotive vehicles in-house. We produced only commercial vehicles until 1991, when we started producing passenger vehicles. Our most significant achievement in this field has been the design and development of Indias first, and currently only, fully indigenous contemporary compact car, the Indica. The launch of the Indica in fiscal 1998 and its upgraded V2 version in fiscal 2001 was followed by a second offering, the Indigo, in the mid-size car segment 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 and coaches to passenger cars and utility vehicles. Our automotive operations inlcude the design, manufacture, assembly and sale of the above mentioned products, related parts and accessories and the financing business for our vehicles. We have also expanded our international operations through mergers and acquisitions involving non-Indian companies. In 2004, we acquired the Daewoo Commercial Vehicles Company (now renamed as Tata Daewoo Commercial Vehicle Company Limited), South Koreas second largest truck maker. TDCV has launched several new products, such as the Tata Novus M&HCV. In fiscal 2005, we acquired a 21% stake in Hispano Carrocera S.A., or Hispano, a well known Spanish bus and coach manufacturer and we have an option to acquire the remaining stake. Hispanos operations are being expanded into other markets. In addition, in June 2006, we signed a memorandum of understanding with the Fiat group to establish an industrial joint venture in India to manufacture passenger vehicles, engines and transmissions for the Indian and overseas markets; we have also been distributing and marketing Fiat branded cars in India since March 2006. In May 2006, we entered into a joint venture agreement with Brazil-based Marcopolo S.A., or Marcopolo, a global leader in building bodies for buses and coaches, to manufacture and assemble fully built buses and coaches in India, wherein we have a 51% ownership with the balance held by Marcopolo. In December 2006, we entered into a 70:30 joint venture with Thonburi Automotive Assembly Plant Co., Thailand, to manufacture pick-ups in Thailand. The joint venture will 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 and commercial vehicles business. These are managed through our 8 regional offices, 24 area offices and 19 regional sales offices. Most of our sales outlets are exclusive sales outlets. We have a presence at over 2,000 customer touch points in India, including after sales outlets. We are in the process of deploying a Siebel customer relations management system at all of our dealerships and offices across the country, which is one of the largest deployments of that system in the Indian automotive sector. Being implemented in phases since 2003, the 35

combined online Customer Relationship Management Dealer Management initiative now supports over 15,000 users, within the company and amongst its channel partners in India and abroad. We believe that this will give us a significant advantage over our competitors. We also provide financing services to our purchasers through our dealers, who act as our agents, and through our branch network. For fiscal 2006 and 2007, approximately 24% and 31%, respectively, of our vehicle sales volumes in India, were made through financing arrangements where our vehicles financing arms provided the credit. Total consolidated vehicle finance receivables (including those of our subsidiaries) outstanding as at March 31, 2006 and 2007 amounted to Rs.46,607.6 million and Rs.81,545.1 million, respectively, of which Rs.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 provide 24-hour on-road maintenance (including replacement of parts) to vehicle owners. We believe that the reach of our 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 and vehicle safety through our Engineering Research Centre, or ERC, established in 1966, which is one of the few government 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 car the Tata Indica, which is Indias only indigenously developed compact car. The ERC also designed our mid-size car the Tata Indigo, which was launched in 2002 and has been the market leader in the entry mid-size market category in India. We strengthened our position in the Indian commercial vehicle through the introduction of an improved range (EX series) of light, medium and heavy trucks and buses and Indias first Mini truck, the Tata Ace, which was 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 international markets for us. Our acquisition of TDCV is expected to provide us significant advantage in its development process. On similar lines, in our passenger vehicle business, we are developing a low cost car for the Indian market. 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 on alternative fuels, including CNG, liquefied petroleum gas, and bio-diesel. We currently have over 40 staff buses running on bio-diesel at one of our manufacturing plants. We are pursuing alternatives fuel options such as ethanol 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 which could be deployed on our future range of vehicles. During fiscal 2006, we established our wholly owned subsidiary, TMETC, in the United Kingdom to augment the abilities of our Engineering Research Centre which we believe will provide us with access to leading-edge technologies and can support the product development activities which we currently plan to undertake for the future in order to sustain and enhance our position in the increasingly competitive global markets. We are also widening the scope of our research and development activities from in-house product and technology development to managing the research and development process across various internal and external agencies, including our research and development centers in Korea, Spain and the United Kingdom, as well as at various aggregate parts suppliers and outsourcing partners. 36

We are the only automotive company in India which has a modern crash test facility for testing its new products for passenger safety. We also have a hemi-anechoic chamber testing facility for developing vehicles with lower noise and vibration levels and an engine emissions testing facility to develop products meeting international standards. Our product design and development center is equipped with computer-aided design, manufacture and engineering tools, with sophisticated hardware, software, and other information technology infrastructure, designed to create a digital product development environment and virtual testing and validation, resulting in faster product development cycle-time and data management. Rapid prototype development systems, testing cycle simulators, advanced emission test laboratories and styling studios are also a part of our product development infrastructure and are regularly used in product development. Over the years, we have devoted significant resources towards our research and development activities. Our total expenditure on research and development including capitalized expenditure during fiscal years 2005, 2006 and 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 automotive market. Many foreign automotive manufacturers have increased or are expected to increase their participation in the 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 specific customer needs such as safety, driving comfort, fuel efficiency and durability. We believe that our vehicles are suited to the general conditions of Indian roads, local climate and they comply with applicable environmental regulations currently in effect. We also offer a wide range of optional configurations to meet the specific needs of our customers. We intend to revamp our product portfolio in order to meet the increasing customer expectation of owning world class products. Seasonality Demand for our vehicles in the Indian market is subject to seasonal variations. Demand generally peaks between January and March, although there is a decrease in demand in February just before release of the Indian Fiscal Budget. Demand is usually lean from April to July and picks up again in festival season from September onwards with a decline in December due to year end. Facilities We currently operate three principal automotive manufacturing facilities. The first facility was established in 1945 at Jamshedpur in the State of Jharkhand in eastern India. We set up a second facility in 1966 (with production commencing in 1976) at Pune, in the State of Maharashtra in western India, and a third in 1985 (with production 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 Lucknow manufacturing facilities have been accredited with ISO/TS 16949:2000(E) certification. We are in the process of setting up a plant in each of Singur in West Bengal and Dharwad in Karnataka. We have also set up research and development facilities in the United Kingdom. Installed Capacity Our total vehicle production capacity in India as of March 31, 2007 determined on the basis of two production shifts per day and including capacity for the manufacture of replacement parts, was 682,000 units annually. 37

The following table shows our installed capacity as at March 31, 2007, and production levels by plant and product type in fiscal 2005, 2006 and 2007:
Fiscal Year ended March 31, Production (Units) Installed Capacity(1) 2005 2006 2007

Jamshedpur Medium and Heavy Commercial Vehicles . . . . . . . . . . . . . . . . . . . . . . Pune Medium and Heavy Commercial Vehicles, Light Commercial Vehicles, Utility Vehicles, Passenger Cars . . . . . . . . . . . . . . . . . . . . Lucknow Medium and Heavy Commercial Vehicles, Light Commercial Vehicles, Utility Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1) On double shift basis including capacity for manufacture of replacement parts.

96,000

71,023

69,891

98,227

556,000

311,269

366,468

458,324

30,000

18,649

19,963

28,235

Components and Raw Materials The principal raw materials and components required by us for use in our vehicles are steel sheets and plates, castings, forgings and items such as tyres, batteries, electrical items and rubber and plastic parts. The raw materials, components and consumables that are domestically sourced, include steel (sheet-metal, forgings and castings), 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 with the assistance of our subsidiary, TTL, for electronic interchange of data with our suppliers. This has enabled us to have real time information exchange and processing to manage our supply chain effectively. We use external agencies as third party logistic providers. This has resulted in space and cost saving by transferring a part of our inventory to a third party. As part of our strategy to become a low-cost vehicle manufacturer, we have undertaken various initiatives to reduce our fixed and variable costs including an e-sourcing initiative started in 2002 through which we procure some supplies through reverse auctions. We have established a procedure for ensuring quality control of outsourced components. Products purchased from approved sources undergo a supplier quality improvement process. We also have a program for assisting vendors from whom we purchase raw materials or components to maintain 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 assurance program that includes random testing of production samples, frequent re-calibration of production equipment and analysis 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 our supply chain activities with respect to major items of purchase as well as major inputs of technology and services. The Strategic Sourcing Group is responsible for recommending for the approval of the Management Committee the long-term strategy and purchase decision for these items, negotiation and relationship with vendors with regard to these items, formulating and overseeing our purchasing policies, norms in respect of all items, evolving guidelines for vendor quality improvement, vendor rating and performance monitoring and undertaking company-wide initiatives such as e-sourcing and supply chain management/policies with respect to vehicle spare parts. We are also exploring opportunities for global sourcing of parts and components from lower cost countries, and have embarked on a vendor management program that includes vendor base rationalization, vendor quality improvement and vendor satisfaction surveys.

38

Suppliers We have an extensive supply chain for procuring various components. We are also outsourcing many of manufacturing processes and activities to various suppliers. In such cases, we provide training to outside suppliers who design and manufacture the required tooling and fixtures. Tata AutoComp Systems Ltd, or TACO, an affiliate of the Company manufactures auto components and encourages the entry of internationally acclaimed auto component manufacturers into India by setting up joint ventures with them. Some of these joint ventures include: Tata Johnson Controls Limited for seats, Knorr Bremse CV Systems for commercial vehicle air brakes, Tata Yazaki Autocomp Limited for wiring harnesses, JBM Sangwoo Limited for pressed components and Tata Toyo Radiators Limited for radiator assemblies. These joint ventures supply auto components for our products. We have embarked upon a vendor management program that includes vendor base rationalization, vendor quality improvement and vendor satisfaction surveys. As part of driving continuous improvement in procurement, 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 equivalent domestically-available components do not meet our quality standards. We also import products to take advantage of lower prices in foreign markets, such as special steels, wheel rims and power steering assemblies. The following table shows the values of imported and indigenous raw material and components consumed by us:
2005 Rs. million For the Fiscal Year ended March 31, 2006 2007 Rs. Rs. % million % million

Imported (at rupee cost) . . . . . . . . . . . . . . . . . . . . . . . . . . Indigenously obtained . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Our Strategy

2,599 110,004 112,603

2.3 97.7 100.0

6,160 126,491 132,651

4.6 95.4 100.0

6,967 172,190 179,157

3.9 96.1 100.0

We believe that we have established a strong position in the Indian automobile industry by launching new products, high quality-low cost manufacturing, investing in research and development and maintaining our financial strength. We have also benefited from the expansion of our manufacturing and distribution network and the creation of a highly talented workforce. Our goal is to continue to strengthen our position in the domestic market, maintain our operational excellence and grow our international business in select countries through organic 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 broad product base further with our strong brand recognition in India, our superior understanding of local consumer preferences, 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, our association with Hispano in Spain, our joint venture with Marcopolo of Brazil in India and with Thonburi in Thailand and our relationship with Fiat will enable us to expand our product range and extend our geographical reach. For example, in fiscal 2006, we introduced the Tata ACE, a four wheeler mini-truck with a 0.7 ton payload, that we believe has created a new category in the Indian commercial vehicle market. We had to more than triple the capacity for the product within 24 months from the launch and we are currently increasing our production capacity for this vehicle through a new plant at Uttarakhand to meet growing demand. We are also currently developing an additional new truck platform. 39

Pursuing a similar strategy, in our passenger vehicle business, we are developing a low cost car for the Indian 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 may enable us to improve our existing product portfolio. We are expanding our existing manufacturing facilities and are also establishing new manufacturing facilities to cater to the growing demand for our products. We are also currently expanding the reach of our sales and service network. Mitigating cyclicality: The automobile industry is impacted by cyclicality, which is more pronounced in the commercial vehicle category. To mitigate the impact of cyclicality faced by our medium and heavy trucks business, we plan to continue to strengthen our operations in the light commercial vehicles, buses and passenger car categories. We also plan to continue to strengthen our non-vehicle business, such as spare part sales, annual maintenance contracts, sales of aggregates for non-vehicle businesses, reconditioning of aggregates, and sale of castings, 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 select geographic areas, both through organic and inorganic means, may also reduce the impact of cyclicality in the Indian market, as the cyclicality of these markets may not coincide with the cyclicality of the Indian market. This strategy also provides us an opportunity to grow in markets with similar characteristics to the Indian market. Our international business strategy has already resulted in the continuous growth of our international operations over the previous three fiscal years. For example, in South Africa, within three years of a focused entry, we have become the third largest manufacturer in the commercial vehicle category. Reducing costs and breakeven points: While expanding our business, we plan to continue to sustain and enhance our cost advantage. Since fiscal 2001, we have made significant reductions in our cost base, which has had an impact on our results of operations and contributed to our return to profitability in the previous five fiscal years. We are working with Ariba Inc. for e-sourcing and reverse auctions. We initiated the second phase of our cost reduction program in fiscal 2006, which we expect to complete over a period of three years. We continue to place an emphasis on the reduction of material costs, production costs, overhead and other general costs by pursuing value engineering and manufacturing cycle time reduction and stringent working capital controls. We plan to continue to adopt international and local operational and management best practices to achieve continued cost reductions and management efficiencies. We believe that productivity improvements and operational efficiencies 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 is to achieve international quality standards for our entire line products and services and we are pursuing various quality 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 timely fashion. We are deploying the Siebel based customer relationship management system across our sales and service network, whereby we expect to improve our responsiveness to market and customer service needs. Our combined online Customer Relationship Management Dealer Management initiative, which has been implemented in phases since 2003, now supports over 15,000 users within the Company and amongst its channel partners in India and abroad. Enhancing Capabilities Through the Adoption of Superior Processes: The Tata Group, of which we are a part, aims at improving the quality of life through leadership in various sectors of national economic significance. In pursuit of this goal, the Tata Group has institutionalized an approach called the Tata Business Excellence Model, or TBEM, which has been formulated on the lines of the Malcolm Baldridge National Quality Award to enable it to drive performance and attain higher levels of efficiency both in its businesses and in discharging its social responsibility. The model aims to nurture core values and concepts embodied in various focus areas such as leadership, strategic planning, customers, markets and human resources to be translated to 40

operational performance. Our adoption and implementation of this model seeks to ensure that our business can be conducted through superior processes in the future. We have deployed a balance score card (BSC) management system, developed by Dr. Robert Kaplan, of the Harvard Business School, and Dr. David Norton, for measurement based management and feedback. We have also deployed a new product introduction process for systematic product development and a product lifecycle management system for effective product data management across our organization. On the human resources front, we have adopted various processes to enhance the skills and competencies of our employees. We have also enhanced our performance management system with appropriate mechanisms to recognize talent and sustain our leadership base. We believe these will enhance 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 the rising aspirations of consumers in India, we intend to significantly expand our vehicle financing activities to enhance 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 most technologically advanced indigenous vehicle manufacturers in India. Over the years, we have enhanced our technological strengths through extensive internal research and development activities as well as through the assistance of foreign research consultants from time to time. Our research and development resources, which include those at our subsidiaries, like TMETC, TDCV and TTL and our associate companies, like Hispano Carrocera, further increase our capabilities in product design, manufacturing and quality control. We consider technological leadership to be a significant factor in continued success, and therefore intend to continue to devote significant resources to upgrade our technological base. Maintaining Financial Strength: We have embarked on Economic Value Added driven project evaluation and capital investments aiming to ensure that we will be able to recover portions of our cost of capital in the event of an economic downturn and to generate earnings in excess of our cost of capital during periods of economic growth. Leveraging Unified Tata Brand Equity: We recognize the need for enhancing our brand recognition in highly competitive markets in which we compete with internationally recognized brands. We believe the Tata brand name is associated by Indian customers with reliability, trust and value. We will continue to promote the Tata 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% in fiscal 2005 and 9% in fiscal 2006. Economic growth, road and infrastructure development, sustained freight availability and buoyant freight rates had a positive impact on commercial vehicle sales. The passenger vehicle sales were favorably impacted by a reduction in excise duty on small cars, growth in disposable income and launch of new models. The domestic commercial and passenger vehicle sales witnessed a 23.7% growth during fiscal 2007, in spite of increase in consumer interest rates, tightening of liquidity position in the last quarter and peaking of fuel prices in the first few months of the fiscal with a gradual decline during the year. Vehicle exports continued 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 Our Sales (including Exports) (including Exports) 2006 2007 Growth 2006 2007 Growth (Units) (Units) (%) (Units) (Units) (%) Our Market Share (including Exports) 2006 2007 (%) (%)

Commercial Vehicles . . . . . . . 391,641 Passenger Vehicles . . . . . . . . . 1,318,648 Total: . . . . . . . . . . . . . . . 1,710,289 Source: SIAM report and internal analysis

517,648 1,578,176 2,095,824

32.2 19.7 22.5

245,022 334,238 209,107 246,042 454,129 580,280

36.4 17.7 27.8

62.6 15.9 26.6

64.6 15.6 27.7

Industry Structure and Developments Commercial Vehicles After witnessing a continuous decline in the growth rates in the last two fiscal years, the commercial vehicle industry witnessed an impressive 33.3% growth in fiscal 2007 in sales due to robust economic growth, increased industrial activity and continued development of better road infrastructure. Restrictions on overloading and increased demand from construction and mining activity had a favorable impact on M&HCV segment which grew by 32.8%. The LCV segment recorded even a higher growth rate of 33.9% due to growth in the goods redistribution segment, which was primarily led by our last mile goods distribution vehicle, the TATA Ace. The industrys domestic performance in fiscal 2006 and fiscal 2007 and our corresponding performance is tabulated below:
For the Fiscal Year ended March 31, Industry Sales Our Sales (Domestic) (Domestic) 2006 2007 Growth 2006 2007 Growth (Units) (Units) (%) (Units) (Units) (%) Our Market Share (Domestic) 2006 2007 (%) (%)

M&HCVs . . . . . . . . . . . . . . . . . . . . LCVs . . . . . . . . . . . . . . . . . . . . . . . Total CVs: . . . . . . . . . . . . . . Source:

207,472 143,569 351,041

275,600 192,282 467,882

32.8 33.9 33.3

128,610 86,226 214,836

172,842 125,744 298,596

34.4 45.8 39.0

62.0 60.1 61.2

62.7 65.4 63.8

SIAM report and internal analysis

With a 39% growth in fiscal 2007, we achieved a sale of 298,586 commercial vehicles in the domestic market and increased our market share by 2.6% to 63.8%, the highest in the last 6 years. In the M&HCV segment, 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 nearly 1.38 million vehicles. The high growth could be attributed to the lowering of excise duty on small cars in the previous fiscal years Union Budget, economic growth leading to sustained increase in disposable income and launch of new models/variants. The hardening of the interest rates from the third quarter of fiscal 2007 onwards had a slowing down impact on the industry towards the end of the year.

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The industrys domestic performance in fiscal 2006 and fiscal 2007 and our corresponding performance is tabulated below:
For the Fiscal Year ended March 31, Industry Sales (Domestic) 2006 2007 (Units) (Units) Our Sales (Domestic) 2007 (units) Our Market Share (Domestic) 2006 2007 (%) (%)

Growth (%)

2006 (units)

Growth (%)

Small Cars (Mini and Compact) . . 662,094 832,161 25.7 Mid-Size Cars . . . . . . . . . . . . . . . . 213,862 206,431 (3,5) UVs . . . . . . . . . . . . . . . . . . . . . . . . 194,502 220,199 13.2 Total Passenger Vehicles: . . . . . . 1,143,076# 1,379,698# 20.7
* # Including Fiat Branded Vehicles. Inclusive of all segments.

111,772* 39,388 37,910 189,070

146,018* 30.6 16.9 17.5 34,310 (12.9) 18.4 16.6 47,892 26.3 19.5 21.7 228,220 20.7 16.5 16.5

Source:

SIAM report and internal analysis

Despite increased competition, we have maintained our position as the second largest manufacturer of passengers 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 vehicles in fiscal 2007 and is now comprised of 10 competing models. Our TATA Indica sales grew by nearly 31% and its market share grew from 16.9% in the previous year to 17.4%. Along with Fiats sales, we were able to achieve a joint market share of 17.5%. We grew our presence appreciably in the petrol segment and were able to defend our 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 of 27%. Due to a lesser decline in our sales of the Indigo range, we increased our market share in the entry mid-size segment to 38% in fiscal 2007 from 33% in the previous fiscal year. Along with Fiat, we were able to achieve a joint market share of 38.2%. We opened a new niche with the launch of our long wheel base Indigo XL that of a 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 Utility Vehicle 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 based on 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 50,223 units exported in fiscal 2006. Our commercial and passenger vehicles are being marketed in several countries in Europe, Africa, the Middle 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 of commercial vehicles and passenger vehicles respectively. South Africa remained our largest export destination for the 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 in and exploring possibilities of entering new markets with similar market characteristics to the Indian market. 43

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 financed 165,376 new vehicles in fiscal 2007, a growth of 71.8% as compared to 96,247 in the previous fiscal year. With disbursals of Rs.94.15 billion, a growth of 71.8% over Rs.54.79 billion in the previous year, TMF has emerged as the 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 captive financing arm to support the vehicle sales business as well as to de-risk the cyclical revenue stream of our automotive 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 total disbursements for fiscal 2007 of Rs.61.22 billion (previous year Rs. 36.93 billion), recording a 66% growth TMF financed 100,088 units, an increase of 63% over the previous fiscal year. The Passenger car financing arm of TMF continued to grow at a compound annual growth rate of 70%, thus supporting our Passenger Car sales by financing 28.8% of our total domestic sales. During fiscal 2007, TMF financed 65,288 units, disbursing Rs.20.68 billion and posting a growth of 79% over the previous fiscal year. The Construction Equipment finance grew by 292% in fiscal 2007, or Rs.6.63 billion against Rs.2.26 billion in the previous fiscal year, recording a compound annual 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 financial performance and profitability. A brief profile of our material subsidiary companies and their main financial parameters 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, TDCV witnessed 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, TDCVs heavy vehicle exports constituted two thirds of South Koreas total heavy commercial vehicle exports. TDCV recorded a turnover in fiscal 2007 of KRW 493.66 billion (Rs.22,488.1 million) which was higher by 35% compared to KRW 364.94 billion (Rs.16,466.6 million) in fiscal 2006. The Profit before Tax at KRW 29.26 billion (Rs.1,333.1 million) registered an increase of 63% compared to KRW 17.94 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 to rupees at the average exchange rates prevailing in the respective fiscal years. Telco Construction Equipment Company Limited (Telcon) is engaged in the business of manufacturing and 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 machines in fiscal 2007 (3674 machines in fiscal 2006) with a gross revenue of Rs.18,141.6 million in fiscal 2007 (as compared to Rs.12,894.9 million in the previous fiscal year), a profit after tax of Rs.1,838.6 million in fiscal 2007 (as compared to Rs.868.4 million), which represents an increase of 112% over the previous fiscal year, and a 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 44

Services (E&D), Product Lifecycle Management (PLM) and product-centric IT services to leading manufacturers. It responds to customers needs through its 17 subsidiary companies having operations in 45 cities across 12 countries on three continents and through its offshore development centers in India and Thailand. Its customers are among the worlds premier automotive, aerospace and consumer durable manufacturers. INCAT, founded in 1989 and acquired by Tata Technologies in October 2005, is the worlds leading independent provider of E&D, Product & Information Lifecycle Management, Enterprise Solutions and Plant Automation. INCAT focuses on enabling manufacturers to improve revenue and profit by realizing superior products. INCATs services include product design, analysis and production engineering, Knowledge Based Engineering, PLM, Enterprise Resource Planning and Customer Relationship Management systems. INCAT also distributes, implements and supports PLM products from leading solution providers in the world such as Dassault Systms, UGS and Autodesk. With a combined global work force of more than 3,000 employees, INCAT has operations 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 15 years, iKS has enabled engineering knowledge transformation through i get it, the only web application in the world 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 are being wound up, liquidated or merged even as various restructuring initiatives are being taken with the objective of bringing in operating and tax efficiencies by sharpening the focus on its services and product business, fixing territorial responsibility for top and bottom line growth and establishing a global delivery centre supporting the overall business. The consolidated revenue of the TTL Group in fiscal 2007 was Rs.9,605.3 million in fiscal 2007, an increase of 76% as compared to Rs.5,450.0 million in the previous fiscal year. The profit before tax was Rs. 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 by capturing customer spending over the vehicle life-cycle and by extending value added products, combining financing offerings with insurance, fleet management, operating leases, re-finance and other products related to vehicles sold by us. TMLFSL is registered with RBI as a Systemically Important Non-Deposit taking NBFC and is classified as an Asset Finance Company. TMLFSL commenced operations in September 2006, and for the period ended March 31, 2007, it made disbursements close to Rs.40,000 million recording a profit after tax of Rs.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 are currently pending registration. In addition to this, our significant trademarks are registered, or are in the process of being registered, in nearly 117 countries. We currently hold approximately 1020 of these registrations worldwide. 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 our acquisition of TDCV, we have the perpetual and exclusive use of the Daewoo brand and trademarks in Korea and overseas markets for the product range of TDCV. India is a member of the World Trade Organization. In compliance with its obligations under the Agreement on Trade Related Aspects of Intellectual Property, or TRIPS, India grants statutory protection to various forms of intellectual 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. The Patents Act, 2002, as amended, to the extent that it relates to our business and operations, provides adequate product and process patent protection in India in accordance with its obligations under TRIPS. The United States 45

has placed India on its priority watch list under Section 301 of TRIPS for failing to provide adequate levels of protection for intellectual property rights. Although we have never experienced any material difficulties in protecting our brands and other intellectual property in India, the protection and enforcement of intellectual property 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 the United Kingdom. These patents are mostly in relation to devices which enable efficient functioning, such as energy saving devices. Our most significant patent, which is currently in the process of being registered, is a portable 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 expiration or 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 and Rs.24,612 million during fiscal 2005, 2006 and 2007, respectively. Our capital expenditure during the past three years has been related mostly to design and development of new products and variants, capacity expansion for new and existing products to meet the market demand and investments towards improving quality, reliability and productivity that are aimed at operational efficiency. We intend to continue to invest in our business units and research and development over the next several years for improving our existing product range and developing new products and platforms to build and expand our presence in the passenger vehicle and commercial vehicle categories to strengthen our position in India and growing 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 four fiscal years toward product development, capital expenditure in capacity enhancement, plant renewal and modernization and to pursue other growth opportunities. These expenditures are expected to be funded largely through 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 our shareholders permitting the Board to raise a maximum of Rs.30 billion in equity or equity-related instruments, if required, and also raise our borrowing limits to Rs.100 billion, to fund capital expenditure. In fiscal 2007, we obtained shareholders consent to a resolution, superseding the above resolution, to increase the borrowing limit to Rs.120 billion. Employees We consider our human capital as a critical factor to our success. Under the aegis of the Tata Group, we have drawn up a comprehensive human resource strategy that addresses key aspects of human resource development such as: Code of conduct and fair business practices. A fair and objective performance management system linked to the performance of the businesses which identifies 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 their mobility 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. 46

In line with the Human Resource strategy, we, in turn, have recently implemented various initiatives in order to build better organizational capability that we believe will enable us to sustain competitiveness in the global market place. 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 of internal HR processes to support the Companys 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 global best 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 in the areas of general, commercial and operations management and offering them opportunities for growth within the organization. Our human resources team has been invited to replicate this system in other Tata companies. Talent Management Scheme which includes identification of high performers and high potentials through various routes like PMS and Development Centres. Subsequent to the identification process we provide them with challenging assignments for faster development. Introduction of performance rating based salary review and quality linked variable payment for supervisory category of employees. Other initiatives include: Extensive brand building initiatives at university campuses to increase recruiting from premium universities 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 and 2007, 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Concorde Motors (India) Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . Telco Construction Equipment Co. Ltd. . . . . . . . . . . . . . . . . . . . . . . Tata Technologies Ltd. & its subsidiaries(1) . . . . . . . . . . . . . . . . . . . HV Axles Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HV Transmissions Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TAL Manufacturing Solutions Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Motors Insurance Services Ltd. . . . . . . . . . . . . . . . . . . . . . . . . Tata Daewoo Commercial Vehicle Co. Ltd . . . . . . . . . . . . . . . . . . . TML Financial Services Ltd. (w.e.f. June 1, 2006) . . . . . . . . . . . . . Tata Marcopolo Motors Ltd. (w.e.f. September 20, 2006) . . . . . . . . Tata Motors (Thailand) Ltd. (w.e.f. February 28, 2007) . . . . . . . . . . Tata Motors European Technical Centre Plc . . . . . . . . . . . . . . . . . .

India India India India India India India India Republic of Korea India India Thailand United Kingdom

100.00% 100.00% 60.00% 84.76% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 51.00% 70.00% 100.00%

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

47

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

Percentage Ownership (including Subsidiary Interest)

Name of Associate

Country of Incorporation

NITA Company Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Cummins Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata AutoComp Systems Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Precision Industries Pte. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . Hispano Carrocera S.A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TSR Darashaw Ltd. (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Securities Pvt. Ltd.(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Telcon Ecoroad Resurface Pvt. Ltd.(2) . . . . . . . . . . . . . . . . . . . . . . . .

Bangladesh India India Singapore Spain India India India

40.00% 50.00% 50.00% 49.99% 21.00% 26.00% 29.34% 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 respect of claims against us below Rs.50 million, the majority of cases pertain to motor accident claims (involving vehicles that were damaged in accidents while being transferred from our manufacturing plants to regional sales offices) and consumer complaints. Some of these cases relate to replacement of parts of vehicles and/or compensation for deficiencies in the services by us or our dealers. We believe that none of these claims or actions individually or in the aggregate will have a material adverse effect on our business, financial condition or results of operations. Claims against us not acknowledged as debts and other claims for which we may be contingently liable, as at March 31, 2007, are described in Note 8 to Note 12 to Schedule 14 on page F-33 included elsewhere in this Offering Memorandum. We believe that none of the contingencies either individually or in the aggregate, would have a material adverse effect on our financial condition, results of operations or cash flows.

48

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, which with its subsidiary owns, as of March 31, 2007, 8.62% of our ordinary shares, has the right to nominate one Director (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 one Director (the Debenture Director) if the trust deeds relating to outstanding debentures require the holders to nominate a Director. Currently there is no Debenture Director. Also, the Articles provide that pursuant to the terms of loan agreements with certain financial institutions in India, those institutions have the right to nominate two Directors (each, the Financial Institutions Director) to the Board. Currently there is no Financial Institutions Director. The Directors may be appointed by the Board of Directors or by a General Meeting of the shareholders. The Board may appoint any person as an Additional Director, but such a Director must retire at the next Annual General 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 appointed and on the expiry of the term he will retire unless re-elected by the shareholders. The Board may appoint an Alternate Director in accordance with the provisions of the Companies Act to act for a Director during his absence, 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 such Directors 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 2005 appointed Mr. Ravi Kant as our Managing Director, who is responsible for and oversees our day to day operations. Mr. P.P. Kadle, our Executive Director, heads the Corporate Affairs, Finance and Information Technology 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 Directors and Executive Directors 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 beneficially an 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A. Soonawala . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J.J. Irani . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V.R. Mehta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R. Gopalakrishnan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.N. Wadia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S. M. Palia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ravi Kant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Praveen P. Kadle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prakash M. Telang . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Chairman Director Director Director Director Director Director CEO & Managing Director Executive Director & CFO Executive Director

1981 1989 1993 1998 1998 1998 2006 2000 2001 2007

Biographies Mr. Ratan N. Tata (Chairman). Mr. Ratan N. Tata holds a B.Sc. (Architecture) degree from Cornell University, USA and has completed the Advanced Management Program at Harvard University, USA. He joined the Tata Group in 1962 and is the Chairman of the Tata group of companies and Tata Sons Limited, the holding company for the majority of the Tata group of companies. Mr. Tata is associated with various organizations in India and abroad. He is the Chairman of the Government of Indias Investment Commission and a member of Prime Ministers Council on Trade and Industry, the National Hydrogen Energy Board and the National Manufacturing 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 to the Board of Directors of the New York Stock Exchange and the International Advisory Boards of the Mitsubishi Corporation, the American International Group and JP Morgan Chase. Mr. Tata has been on our Board since August 1981 and has spent more than 14 years in an executive capacity and is actively involved with product development and other business strategies pursued by us. Mr. N.A. Soonawala. Mr. N.A. Soonawala is an honors graduate in commerce from the University of Bombay and a Chartered Accountant from the Institute of Chartered Accountants of India. He has wide exposure in the field of finance, including having previously worked with ICICI, Washington. He joined Tata Sons Limited in 1968 and was a finance director until June 2000. He is on the boards of various Tata group companies and 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 Gold Medal in Geology and a M.Sc. (Geology) degree from the Nagpur University in 1958, both with first class. He also 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 Honorary Degree of Doctor of Metallurgy. Dr. Irani was conferred an honorary knighthood in 1997 by the Queen of England for his contribution towards strengthening the Indo-British Partnership. He is also on the boards of various 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 position with the Indian federal Ministries of Railways, Shipping and Transport. He played a key role in financial revamping and rationalization processes of major ports in India and has participated in important diplomatic missions and has represented India in International Conferences. Mr. Mehta is on the Board of other companies in his individual capacity or a nominee of financial institutions or foreign companies. Mr. Mehta joined our Board in June 1998 as a Financial Institutions nominee. In September 2005, Unit Trust of India withdrew their nomination of Mr. Mehta as Financial Institution Director, though he continues to be on the Board in his individual capacity. Mr. R. Gopalakrishnan. Mr. R. Gopalakrishnan holds a Bachelors degree in Science and a B.Tech (Electronics) degree from the Indian Institute of Technology (IIT), Kharagpur. He is also an Executive Director of Tata Sons Limited and a member of the Group Executive Office of Tata Sons Limited, besides being on the Boards of various Tata companies. Prior to joining the Tata group in August 1998, he was the Vice-Chairman of Hindustan Lever Limited. With effect from January 2001, Mr. Gopalakrishnan has, together with the Chairman and Executive Director(s), the responsibility of overseeing our operations. Mr. Gopalakrishnan has been a Director 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 various charitable 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) degree in banking. Mr. Palia was a banker by profession prior to retiring. From 1964-1989, he worked for the Industrial 50

Development Bank of India, where he held a number of positions, including that of an Executive Director. He has also acted as an advisor to the Industrial Bank of Yemen and the Industrial Bank of Sudan, under World Bank assistance programmes. In addition, he was the Managing Director of Kerala Industrial and Technical Consultancy Organisation Limited, a company set up to provide consultancy services to micro, small and medium enterprises. Mr. Palia is on the Boards of various companies in the industrial and financial service sectors and is also actively involved as a trustee in various non-governmental organizations and trusts. He was appointed on our Board with effect from May 19, 2006. Mr. Palia is also the financial expert on the Audit Committee. Mr. Ravi Kant. Mr. Kant holds a Bachelor of Technology degree from the IIT, Kharagpur and a Masters in Science in management techniques from Aston University, Birmingham, UK. Mr. Kant has wide and varied experience 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 and Hawkins Cookers Limited. Mr. Kant had been an Executive Director since May 2000, responsible for manufacturing and marketing of commercial vehicles and manufacturing of utility vehicles and was appointed as our 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 Mumbai University. He is also a member of the Institute of Chartered Accountants of India, the Institute of Cost and Works Accountants of India and the Institute of Company Secretaries of India. He has gathered wide experience with well-known Indian companies in the fields of management, accountancy, law, finance and treasury. Prior to joining us as Vice-President (Finance), Mr. Kadle was with Tata-IBM Ltd as their Chief Financial Officer. In October 2001, Mr. Kadle was appointed as an Executive Director. He is responsible for Finance, Human Resources and Corporate Affairs and is the CFO of the Company. Mr. Prakesh Telang. Mr. Prakesh Telang holds a Bachelors Degree in Mechanical Engineering and an MBA from IIM, Ahmedabad. Mr. Telang has over three decades of functional expertise in the automotive industry 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. Since joining Tata Motors Limited, he has been responsible for product development, manufacturing, sales and marketing functions of the Strategic Business unit of Light & Small Commercial Vehicles. Mr. Telang has been appointed 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 . . . . . . . . . . . . . . . . . . . Mr. P.P. Kadle . . . . . . . . . . . . . . . . Mr. P.M. Telang . . . . . . . . . . . . . . . Mr. A.P. Arya . . . . . . . . . . . . . . . . . Mr. R. Dube . . . . . . . . . . . . . . . . . . Mr. S. Mani . . . . . . . . . . . . . . . . . . . Mr. K C Girotra . . . . . . . . . . . . . . . Mr. C. Ramakrishnan . . . . . . . . . . . Mr. R.S. Thakur . . . . . . . . . . . . . . . Mr. P.Y. Gurav . . . . . . . . . . . . . . . . Dr. S. J. Tambe . . . . . . . . . . . . . . . . Mr. H.K. Sethna . . . . . . . . . . . . . . .

Managing Director Executive Director Executive Director President (Jamshedpur, Lucknow) President Vice President (Sales & Marketing CVBU) Vice President (Lucknow Works & FBV) Vice President Vice President (Finance) Vice President (Corporate Finance, Accounting & Taxation) Vice President (Human Resources) Company Secretary 51

1999 1996 1972 1996 1998 2000 1981 1980 1972 2001 2005 1995

Compensation The following table provides the annual compensation paid to our Directors for the fiscal year ended March 31, 2007.
Name Position Remuneration (1) (in Rupees)

Ratan N. Tata(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.A. Soonawala . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J.J. Irani . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . J.K. Setna . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V.R. Mehta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . R. Gopalakrishnan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . N.N. Wadia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S.A. Naik . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S.M. Palia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ravi Kant(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P.P. Kadle(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Chairman Director Director Director Director Director Director Director Director Managing Director & CEO Executive Director & CFO

5,245,000 3,645,000 1,520,000 650,000 4,505,000 2,530,000 745,000 2,530,000 1,840,000 24,051,000 21,682,000

Apart from the above, the Managing and Executive Directors are also eligible to receive special retirement benefits at the discretion of the Board 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 for Executive 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 at March 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 of Operations Report and the Directors Responsibility Statement; overseeing our financial reporting process and the disclosure of our financial information, including earnings 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 control systems and recommending improvements to the management. 52

 Recommending the appointment/removal of the statutory auditor, fixing audit fees and approving non-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 audit department, coverage and frequency of internal audits, appointment, removal, performance and terms of remuneration of the chief internal auditor. Discussing with the internal auditor and senior management, significant internal audit findings and follow-up thereon. Reviewing the findings of any internal investigation by the internal auditor into matters involving suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting any such matters to the Board. Discussing with the external auditor before the audit commences the nature and scope of such audit, as well 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, debenture holders, 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 of Conduct. 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 our independent statutory auditor and its affiliates to us and our subsidiaries for ensuring such auditors independence and objectivity. Said policies and our Whistle-Blower policy have also been extended to our subsidiaries. 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 is comprised 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 to securities transfers, interest/dividend payments, non-receipt of annual reports, issue of duplicate certificates and other miscellaneous complaints. Its scope also includes delegation of powers to our executives of us or the share transfer agents to process share transfers and other investor-related matters. The Investor Grievance Committee is comprised 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 the Finance Committee and the Committee of the Board. The Executive Committee of the Board reviews revenue and 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, new business 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, Executive Director (Finance & Corporate Affairs). 53

The Ethics and Compliance Committee sets forth policies relating to the implementation of the Tata Code of Conduct for Prevention of Insider Trading and takes on record the monthly reports and dealings in securities by the Specified Persons. It also implements appropriate action in respect of violations of the Tata Code of Conduct. 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 of identifying independent directors to be appointed on the Board from time to time to refresh the constitution of the Board 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) of Directors 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 our 385,373,885 Ordinary Shares outstanding at that time:
Name of Shareholder Holding Percentage

Tata Sons Limited and subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Citibank N.A., as Depositary(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Steel Ltd. and subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DaimlerChrysler AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Life Insurance Corporation of India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

84,988,908 42,294,157 33,226,383 25,596,476 23,519,685

22.05 10.97 8.62 6.64 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 beneficial owners of deposited shares.

Since March 31, 2001, our largest shareholder, Tata Sons Limited (together with its subsidiaries) has substantially increased its shareholding in us from 14.31% to 22.05% as of March 31, 2007. Our second largest shareholder, Tata Steel Ltd. (together with its subsidiaries) has substantially increased its shareholdings, but its percentage 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 its percentage shareholding has declined from 10.0% as of March 31, 2001 to 6.64% as of March 31, 2007 as a result of our new issuances of shares. Record holdings of Citibank N.A., as Depositary for our ADRs, increased from 7.47% as of March 31, 2001 to 10.97% as of March 31, 2007 because of the two-way fungibility of Depositary Receipts. Life Insurance Corporation of India has decreased its shareholding and has seen its shareholding percentage decline from 9.32% as of March 31, 2001 to 6.10% as of March 31, 2007 as a result of this 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, there were 248 record holders of our shares with addresses in the United States, whose shareholdings represented approximately 0.05% of our outstanding Ordinary Shares on that date, excluding any of our shares held by United States residents in the form of depositary shares. Because some of these shares were held by brokers or other nominees, the number of record holders with addresses in the United States may be fewer than the number of beneficial owners in the United States. The total permitted holding of Foreign Institutional Investors, or FIIs, in the paid up share capital of the company 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 Foreign Investment 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. 54

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 exchanges on which our ordinary shares are traded. Similar disclosures would be applicable under the Insider Trading Regulations of India with respect to any person who acquires more than 5% of our Shares or voting rights with respect to the Shares. Any increases or decreases in the shareholding of such person by 2% or more of our share capital must also be disclosed. Furthermore, under our listing agreement with the stock exchanges where our Shares are listed, we are required to periodically disclose to such stock exchanges the name and percentage of Shares held by persons or entities that hold more than 1% of our Shares. For the purposes of the above reporting and takeover requirements under our listing agreements, Shares withdrawn from our ADS facility will be included as part of a persons shareholding in us. To our knowledge, we are not, directly or indirectly, owned or controlled by any other corporation or by any government or by any other natural or legal persons severally or jointly. We are not aware of any arrangements the 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 other Tata Group companies to enable them to secure financing from financial institutions on more favorable terms, it is our policy generally not to enter into transactions with our subsidiaries or associates and other Tata Group companies unless the terms thereof are no less favorable to us than those which could be obtained by us on an arms length basis from an unrelated third party. We purchase materials, supplies and services from numerous suppliers throughout the world in the ordinary course of business, including from our subsidiaries, affiliates and firms with which certain members of our board of directors are interested. We purchased materials, supplies (including capital goods), fixed assets and services from these entities in the amount of Rs. 28,803.3 million in fiscal 2007. We also sell our products, fixed assets and services to our affiliates and firms with which certain members of our board of directors are interested. We sold products, fixed assets and services to these entities in the amount of Rs. 8,212.7 million in fiscal 2007. We believe all of these purchase and sale transactions were arms-length transactions, none of which were material to our overall operations. For details of our related party transactions with our subsidiaries and associates, see Schedule 14 on pages F-29 through F-31 of our audited non-consolidated financial statements included elsewhere in 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 outstanding trade accounts and other receivables payable by these entities in the amount of Rs. 4,175.1 million as of March 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 loans under a loan program established by us and our subsidiaries and affiliates to assist executives and directors with the purchase of housing. We believe that each of these loans was entered into in the ordinary course of business.

55

THE TATA GROUP We are the second largest company in the diversified Tata Group in terms of fiscal 2007 revenues, and we benefit 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 billion for the year ended March 31, 2007. The Tata Group is highly diversified and the activities of the group are categorized under seven business sectors, namely, engineering, materials, energy, chemicals, consumer products, services and communications and information 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 developed and expanded in furtherance of his ideals by his two sons, Sir Dorabji Tata and Sir Ratan Tata, following their fathers death in 1904. The family interests subsequently vested largely in the Sir Ratan Tata Trust, the Sir Dorabji Tata Trust and related trusts. These trusts were established for philanthropic and charitable purposes and together owned a substantial majority of the shares of Tata Sons Limited, the principal holding company of the Tata Group. By 1970, the Tata Group had expanded from the trading company established in the nineteenth century to encompass a number of major industrial and commercial enterprises including The Indian Hotels Company Limited (1902), The Tata Iron and Steel Company Limited (Tata Steel) (1907), The Tata Power Company Limited (1910), Tata Chemicals Limited (1939), Tata Motors Limited (1945), Voltas Limited (1954), and Tata Tea Limited (1962). The Tata Group also promoted Indias first airline, Tata Airlines, which later became Air India (Indias national carrier), as well as Indias largest general insurance company, New India Assurance Company Limited, both of which were subsequently taken over by the Government as part of the Governments nationalization program. Tata Consultancy Services (TCS), a division of Tata Sons Ltd., is Asias leading software services provider and the first Indian software firm to exceed sales of US$1 billion. In recent times, the Tata Group has also invested in several telephony and telecommunication ventures, including acquiring a portion of the Indian Governments 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 leading automotive vehicle manufacturing company in India in terms of revenues. Tata Steel, another flagship company of the group, is the oldest and the largest private sector integrated steel plant in operation in the country. Tata Chemicals is one of the worlds largest producers of synthetic soda ash and Tata Tea is the largest integrated tea company in the country. Tata Power is the largest power generating supplier in the private sector. Indian Hotels runs the largest hotel chain in the country. Titan Watches, which is a relatively new entrant, has emerged as the leader in the domestic watch market and is currently the sixth largest brand manufactured in the world. VSNL is the 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 thus have both gained from the use of the Tata brand as well as helped to sustain its brand equity. Since 1991 many multinational corporations with well-established global brands have entered the Indian market. In response, the Tata Group decided to institute a new corporate identity program in order to re-position itself to compete in a global environment. The new corporate identity is licensed to Tata Group companies, including us, for use with their respective products and services. A substantial ongoing investment is planned to develop and promote a strong, well-recognized and common brand equity, which is intended to represent for the consumer a level of quality, service and reliability associated with products and services offered by Tata companies. To further protect and enhance the Tata brand equity, a code of conduct has been adopted by some of the Tata companies that have access to the larger resources and services of the Tata Group. To implement these plans, Tata Sons Limited has undertaken a program by which consenting Tata companies are required to pay a subscription fee to participate in and gain from the new Tata Group identity. We believe that we benefit from association with the 56

new Tata Group identity and, accordingly, have agreed to pay an annual subscription fee to Tata Sons Limited from fiscal 1998 which is equal to 0.25% of our annual net revenue (defined as our net revenue exclusive of excise duties and other governmental taxes and non-operating income), provided that the subscription fee does not exceed 5% of our annual profit before tax (defined as our profit after interest and depreciation but before income 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 calculations are made with reference to our non-consolidated Indian GAAP financial statements. Pursuant to our licensing agreement with Tata Sons Limited, we have also undertaken certain obligations for the promotion and protection of the new Tata Group identity licensed to us under the agreement. The agreement can be terminated by written agreement between the parties, by Tata Sons Limited upon our breach of the agreement and our failure to remedy the same, or by Tata Sons Limited upon providing six months notice for reasons to be recorded in writing. The agreement 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 and further because we believe that our growing international reputation brings benefits to the Tata brand, we consider it very unlikely that we would ever be unable to use the Tata brand in relation to our products and services. The Tata Group companies have sought to continue to follow the ideals of ethics and integrity originally established by the founder of the Tata Group and his successors. To further protect and enhance the Tata brand equity, these values and principles have been articulated in the Tata code of conduct, which has been adopted by most of the Tata companies that have access to the larger resources and services of the Tata Group. These companies have endeavored to maintain high standards of management efficiency and to promote the commercial success of Indian enterprises. The Tata Group has made a significant contribution toward national causes through promotion of public institutions in the field of science, such as the Indian Institute of Science and the Tata Institute of Fundamental Research, and in the field of social services through the Tata Institute of Social Sciences, the Tata Memorial Hospital and the National Center of the Performing Arts. Tata trusts are among the largest charitable foundations in the country. In addition, the Tata Group companies have sought to formulate and follow a coherent approach to various matters 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 Group companies.

57

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 Stock Exchange Limited, Mumbai and the National Stock Exchange of India Limited and has not been prepared or independently 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 in Mumbai. Stock Exchange Regulations Indias stock exchanges are regulated primarily by SEBI, as well as by the Government of India acting through 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). The SCRR, along with the rules, by-laws and regulations of the respective stock exchanges, regulate the recognition of stock exchanges, the qualifications for membership thereof and the manner in which contracts are entered into and enforced between members. The Securities and Exchange Board of India Act, 1992 (the SEBI Act), provided for the establishment of the SEBI to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market and for matters connected therewith or incidental hereto. The SEBI Act granted the SEBI powers to regulate the business of Indian securities markets, including stock exchanges and other financial intermediaries, promote and monitor self-regulatory organisations, prohibit fraudulent and unfair trade practices and insider trading, and regulate substantial acquisitions of shares and takeovers of companies. SEBI has also issued guidelines concerning minimum disclosure requirements by public companies, rules and regulations concerning investor protection, insider trading, substantial acquisitions of shares and takeovers of companies, buybacks of securities, employee stock option schemes, stockbrokers, merchant bankers, underwriters, mutual funds, foreign institutional investors, debenture trustees, credit rating agencies and other capital market participants. Listing The listing of securities on a recognized Indian stock exchange is regulated by the Companies Act, the SCRA, the SCRR and the listing agreement of the respective stock exchange, or the Listing Agreement. Under the standard terms of the Listing Agreement, the governing body of each stock exchange is empowered to suspend trading of or dealing in a listed security for breach of our obligations under such agreement, subject to our receiving prior notice of the intent of the exchange. In the event that a suspension of a companys securities continues 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 the bye-laws by the stock exchanges requires the prior approval of SEBI. A company may be delisted though a voluntary delisting sought by the promoters of the said company or a compulsory delisting by the stock exchange or due to any acquisition of shares of the said company or a scheme or arrangement, or consolidation of holdings by the person in control pursuant to which the public shareholding in the company falls below the minimum limits 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 exit opportunity 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 exchange having nationwide trading terminals. The procedure for compulsory delisting also requires the company to make an exit offer to the shareholders in accordance with the above-mentioned guidelines. 58

In order to restrict abnormal price volatility in any particular stock, the SEBI has instructed stock exchanges to apply daily circuit breakers which do not allow transactions beyond certain price volatility. An index-based market-wide (equity and equity derivatives) circuit breaker system has been implemented and additionally there are currently in place varying individual scrip wise bands. The Indian Stock Exchanges can also exercise the power to suspend trading during periods of market volatility. Margin requirements are imposed by stock exchanges that are required to be paid by stockbrokers. There are no such circuit breakers in respect of our Shares. 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 Investor Protection) Guidelines, 2000, as amended and be filed with the Registrar of Companies having jurisdiction over the place where a companys registered office is situated which, in our case, is currently the Registrar of Companies, Mumbai. A companys directors and promoters may be subject to civil and criminal liability for misrepresentation in a prospectus. The Companies Act along with certain guidelines issued by the SEBI also sets forth procedures for the acceptance of subscriptions and the allotment of securities among subscribers and establishes maximum commission rates for the sale of securities. Public limited companies are required under the Companies Act and SEBI guidelines to prepare, file with the Registrar of Companies and circulate to their shareholders audited annual accounts that comply with the Companies Acts disclosure requirements and other regulations governing their manner of presentation. In addition, a listed company is subject to continuing disclosure requirements pursuant to the terms of its listing agreement with the relevant stock exchange. The companies are also required to publish unaudited financial statements albeit subject to a limited review by the companies auditors), on a quarterly basis and are required to inform stock exchanges immediately regarding any stock-price sensitive information. The Companies Act further allows buybacks of securities, issuance of shares for a consideration other than cash in certain circumstances and mandatory compliance with accounting standards issued by the Institute of Chartered Accountants of India, or the ICAI. The ICAI and the SEBI have implemented changes which require Indian companies to account for deferred taxation, to consolidate their accounts (subsidiaries only), to provide segment-wise reporting and disclosure of related party transactions from April 1, 2001 and accounting for investments in associated companies and joint ventures 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 the ICAI 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 selfregulation. The BSE and NSE together hold a dominant position among the stock exchanges in terms of number of 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 the T+2 period, obligations are settled with buyers of securities paying for and receiving securities, while sellers transfer and receive payment for securities. For example, trades executed on a Monday would typically be settled on a Wednesday. The SEBI proposes to move to a T+1 settlement system. In order to mitigate risk arising out of the transactions entered into by the members of various stock exchanges either on their own account or on behalf of their clients, the Stock Exchanges have designed risk management procedures, which include compulsory prescribed margins on the individual broker members, based on their outstanding exposure in the market, as well as stock-specific margins from the members. 59

To restrict abnormal price volatility, SEBI has instructed stock exchanges to apply the following price bands calculated at the previous days 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 by 10% 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 derivatives markets nationwide is halted. Price Bands. Price bands are circuit filters of 20% movements either up or down, and are applied to most securities traded in the markets, excluding securities included in the BSE Sensex and the NSE Nifty and derivatives products. BSE Established in 1875, the BSE is the oldest stock exchange in India. It is the first stock exchange in India to have 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 has switched over to an on-line trading network since May 1995 and has today expanded this network to over 400 cities in India. As of May 31, 2007, the BSE had 930 members, comprising 178 individual members, 730 Indian companies and 22 foreign institutional investors. Only a member of the BSE has the right to trade in stocks listed on 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-linked screen-based trading facilities with market makers and electronic clearing and settlement for securities including government securities, debentures, public sector bonds and units. Deliveries for trades executed on-market are exchanged through the National Securities Clearing Corporation Limited. On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, the NSE commenced operations in the wholesale debt market segment in June 1994. The capital market (equities) segment commenced operations in November 1994 and operations in the derivatives segment commenced June 2000. NSE trading terminals are now 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 the Securities 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, as applicable. 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 of its 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 or voting rights in a company or acquires or agrees to acquire control over a company, either by himself or with any person acting in concert) who acquires shares or voting rights that would entitle the acquirer to 60

more than 5%, 10%, 14%, 54% and 74% of the shares or voting rights, as the case may be, in a company is required to disclose the aggregate of his shareholding or voting rights in that company to the company and to each of the stock exchanges on which the companys shares are listed within two days of (i) the receipt of allotment information or (ii) the acquisition of shares or voting rights, as the case may be. The term shares is defined under the Takeover Code to mean ordinary shares or any other security which entitles a person to acquire shares with voting rights. A person who holds more than 15% of the shares or voting rights in any company is required to make annual disclosure of his holdings to that company within 21 days of the financial year (commencing on April 1 and ending on March 31). The company is required to disclose the same to each of the stock exchanges on which the companys shares are listed. Further, a person who holds 15% or more but less than 55% of the shares or voting rights in any company is required to disclose any purchase or sale of shares exceeding (in aggregate) 2% of the share capital of the company to the company and to each of the stock exchanges where the shares of the company are listed within two days of (i) the receipt of allotment information or (ii) the sale or acquisition or disposal of shares or voting rights. Promoters or persons in control of a company are also required to make periodic disclosure of shares or voting rights held by them along with persons acting in concert, in the same manner as above, annually within 21 days of the end of the financial year as well as from the record date for entitlement to a dividend. An acquirer who, along with persons acting in concert, acquires 15% or more of the shares or voting rights of a company would be required to make a public announcement to acquire a further minimum 20% of the shares of the company. Such offer has to be made to all public shareholders of the company (defined as holders 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 would entitle him to exercise more than 5% of the voting rights in any financial year ending on March 31 unless such acquirer makes a public announcement offering to acquire a further minimum 20% of the shares or voting 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 company concerned had obtained the initial listing of its shares by making an offer of at least 10% of the issue size to 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 an open offer to acquire a minimum of 20% of the shares or voting rights which it does not already own in the company. However, if an acquisition made pursuant to an open offer results in the public shareholding in the target company being reduced below the minimum level required under the listing agreement with the stock exchanges, the acquirer would be required to take steps to facilitate compliance by the target company with the relevant provisions of the listing agreement with the stock exchanges, within the time period 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 acquiring the right to appoint a majority of the directors or to control the management or the policy decisions of the company) unless such acquirer makes a public announcement offering to acquire a minimum of 20% of the 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 other percentage as prescribed under the Takeover Code has to be made by way of a public announcement which must be made within four working days of entering into an agreement for the acquisition of, or decision to acquire directly, shares or voting rights exceeding the relevant percentages of shareholding in the company and/or control over the company. Unless otherwise provided in the Takeover Code, an acquirer who seeks to acquire any shares or voting rights whereby the public shareholding in the company would be reduced to a level below the limit 61

specified in the listing agreement with the stock exchange for the purpose of continuous listing may acquire such shares or voting rights only in accordance with the regulations prescribed for delisting of securities by the SEBI. The Takeover Code sets out the contents of the required public announcement as well as the minimum offer price. 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 price would 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, including through an allotment in a public, preferential or rights issue, during the 26-week period prior to the date of public announcement; and the average of the weekly high and low of the closing prices of the shares of the company quoted on the stock exchange where the shares of the company are most frequently traded during the 26-week period prior to the date of public announcement, or the average of the daily high and low of the closing prices of the shares as quoted on the stock exchange where the shares of the company are most frequently traded during 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 of shares or voting rights. Specific obligations of the acquirer and the board of directors of the target company in the offer process have also been set out. Acquirers making a public offer are also required to deposit into an escrow account a prescribed percentage of the total consideration, which amount will be forfeited in the event that the acquirer does not fulfill its obligations. In addition, the Takeover Code introduces the chain principle by which indirect acquisition by virtue of an acquisition of companies, whether listed or unlisted, whether in India or abroad, of a company listed in India will oblige the acquirer to make a public offer to the shareholders of each such Indian company that is indirectly acquired. The public open offer provisions of the Takeover Code do not apply, among other things, to certain specified acquisitions, including the acquisition of shares: (i) by allotment in a public and rights issue subject to the fulfillment of certain conditions; (ii) pursuant to an underwriting agreement; (iii) by registered stockbrokers in the ordinary course of business on behalf of clients; (iv) in unlisted companies (unless such acquisition results in an indirect acquisition of shares in excess of 15% in a listed company); (v) pursuant to a scheme of reconstruction or arrangement 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). The Takeover Code does not apply to acquisitions in the ordinary course of business by public financial institutions either on their own account or as pledgee. An application may also be filed with the SEBI seeking exemption from the requirements of the Takeover Code. The obligation to make an open offer also does not arise in case of acquisition 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 notified amendments to the Listing Agreement. All listed companies are required to ensure that their minimum level of public shareholding remains at or above 25%. This requirement does not apply to those companies who at the time of their initial listing had offered at least 10% of the issue size to the public pursuant to Rule 19(2)(6) of the SCRR, nor to companies that have reached a size of 20,000,000 or more in terms of the number of listed shares and Rs. 10,000 million or more in terms of market capitalization. However such listed companies are required to maintain the minimum level of public shareholding at 10% of the total number of issued ordinary shares of a class or kind for the purposes of listing. Failure to comply with this clause in the Listing Agreement requires the listed company to delist its shares pursuant to the terms of the SEBI Delisting Guidelines and may result in penal action being taken against the listed company pursuant to the Securities and Exchange Board of India Act, 1992. 62

Insider Trading Regulations The SEBI (Prohibition of Insider Trading) Regulations, 1992, or the Insider Trading Regulations, have been notified 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 the basis of such information. The terms unpublished and price sensitive information are defined in the Insider Trading Regulations. The insider is also prohibited from communicating, counseling or procuring, directly or indirectly, any unpublished price sensitive information to any other person who while in possession of such unpublished price sensitive information and is prohibited from dealing in securities while in possession of such information. The Insider Trading Regulations further provide that no company shall deal in the securities of another company or associate of that other company while in possession of any unpublished price sensitive information. SEBI has amended the Insider Trading Regulations to provide certain defences to the prohibition on companies in possession of unpublished price-sensitive information dealing in securities. The Insider Trading Regulations make it compulsory for listed companies and certain other entities associated with the securities market to establish an internal code of conduct to prevent insider trading and also to regulate disclosure of unpublished price-sensitive information within such entities so as to minimise misuse of such information. To this end, the Insider Trading Regulations provide a model code of conduct. Further, the Insider Trading Regulations specify a model code of corporate disclosure practices to prevent insider trading which must be implemented by all listed companies. The Insider Trading Regulations require any person who holds more than 5% shares or voting rights in any listed company to disclose to the company, the number of shares or voting rights held by such person, on becoming 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 is required to disclose to the company, the number of shares or voting rights held by him and change in shareholding or voting rights, even if such change results in shareholding falling below 5%, if there has been change in such holdings from the last disclosure made, provided such change exceeds 2% of total shareholding or voting 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 February 2000 and derivative contracts were included within the term securities, as defined by the SCRA. Trading in derivatives in India takes place either on separate and independent derivatives exchanges or on a separate segment of an existing stock exchange. The derivative exchange or derivative segment of a stock exchange functions as a self regulatory organization under the supervision of the SEBI. Derivatives products have been introduced in a phased manner in India, starting with futures contracts in June 2000 and index options, stock options 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 framework for the establishment of depositories to record ownership details and effectuate transfers in book-entry form. The 63

SEBI framed the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996 which provide for, inter alia, the registration of depositories and participants, the rights and obligations of the depositories, participants, the issuer companies and the beneficial owners, creation of pledge of securities held in dematerialised form, and procedure for dematerialisation of shares held in physical form. The depository system has 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 SEBI notified scrips of various companies for compulsory dematerialized trading by certain categories of investors such as foreign institutional investors and other institutional investors. The SEBI has subsequently significantly increased 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 receive the security certificates and hold securities in dematerialised form with a depositary. However, even in the case of scrips notified for compulsory dematerialized trading, investors, other than institutional investors, are permitted to trade in physical shares on transactions outside the stock exchange where there are no requirements of reporting such transactions to the stock exchange, and on transactions on the stock exchange involving lots of less than 500 securities. Transfers of shares in book-entry form require both the seller and the purchaser of the equity shares to establish accounts with depositary participants registered with the depositaries established under the Depositories Act. Charges for opening an account with a depositary participant, transaction charges for each trade and custodian charges for securities held in each account vary depending upon the practice of each depositary participant and have to be borne by the accountholder. Upon delivery, the shares shall be registered in the name of the relevant depositary on the issuers books and this depositary shall enter the name of the investor in its records as the beneficial owner. The transfer of beneficial ownership shall be effected through the records of the depositary. The beneficial owner shall be entitled to all rights and benefits and be subject to all liabilities in respect of his securities held by a depositary. The Companies Act provides that Indian companies making any initial public offerings of securities for or in excess of Rs.100 million should issue the securities in dematerialized form.

64

DESCRIPTION OF THE CARS The CARS will be issued under an Indenture, to be dated as of July 11, 2007 (the Indenture), to be executed among us, Citibank, N.A., London Branch, as Trustee Paying and Transfer Agent and Conversion Agent, and Citigroup Global Markets Deutschland AG & Co. KGaA, as Registrar. Copies of the Indenture and the 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 certain provisions of the CARS and the Indenture and is subject to, and is qualified in its entirety by reference to, the provisions of the CARS and the Indenture, including the definitions of certain terms therein. Whenever particular sections or defined terms of the Indenture not otherwise defined herein are referred to, such sections or defined terms are incorporated herein by reference. Copies of the Indenture will be available to any prospective Holder on or after the Original Issue Date (as defined herein) at the corporate office of the Trustee during normal business hours. Certain Definitions Set forth below is a summary of certain of the defined terms used in the covenants and other provisions of the Indenture and the CARS. Reference is made to the Indenture and the CARS for the full definition of all such terms, as well as any other capitalized terms used herein for which no definition is provided. All calculations relating to financial statement data or amounts derived from our accounting records relate to our non-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 Specified Person directly or indirectly controlling, controlled by or under direct or indirect common control with, the Specified Person. For purposes of this definition, the term control when used with respect to any Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of 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 in Europe (which is expected to be the Financial Times, London Edition) and (ii) so long as the CARS are listed on 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 on which banking institutions in London, England, The City of New York, United States or Mumbai, India (or, if applicable, in the city where the relevant Paying, Transfer or Conversion Agent is located), are authorized or obligated by law or executive order to close. Capital Stock means, with respect to any Person, any and all shares, ownership interests, participation or other equivalents (however designated), including all common or ordinary stock and all preferred stock, of such Person. Certificated Securities means the individual certificated CARS executed and delivered by us and authenticated by the Registrar or the Paying Agent on its behalf, which may be delivered in exchange for the Global 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 the Independent Financial Institution as being the average of the daily selling price for an QS, (ii) with respect to the Shares, the closing sales price of such Shares on the BSE on such day or, if no reported sales take place on such 65

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 Capital Stock (other than our Shares and QSs) on any securities exchange or quotation system selected by us on which such 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 day or, if no reported sales take place on such day, the average of the reported closing bid and offered prices, in either case 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 Period Commencement Date, in the event that there has been a Qualifying Issue prior to the Conversion Period Commencement Date or (ii) the date an issue and listing of QSs satisfies all conditions to become a Qualifying Issue. Conversion Reset Pricing Period means the three month period ending on the Conversion Price Reset Date. Debt Instruments means bonds, debentures, CARS or other similar securities of ours or any other Person which both: (a) are by their terms payable, or confer a right to receive payment, in, or by reference to, any currency other than rupees, or which are denominated in rupees and more than 50% of the aggregate principal amount 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 or over-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, would become 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 arms length free market transaction, for cash, between a willing buyer and a willing seller, neither of which is under pressure or 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 final maturity 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 or any of our Affiliates selected and appointed by us and approved in writing by the Trustee with all expenses of such investment bank to be borne by us. Lien means any pledge, mortgage, lien, charge, hypothecation, encumbrance or other security interest. 66

Market Value means (i) in the case of the Shares, the average of the Closing Prices of the Shares for the most recent 30 consecutive Trading Days on the BSE, (ii) in the case of Capital Stock (other than the Shares and QSs) that is listed on a Selected Exchange, the average of the Closing Prices of such Capital Stock (other than the Shares and QSs) for the most recent 30 consecutive Trading Days, (iii) in the case of ADSs, the average of the Closing Prices of the ADSs for the most recent 30 consecutive Trading Days on the NYSE and (iv) if the market value cannot be determined pursuant to the procedures above, the market value determined by an Independent Financial 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 gross revenues, as the case may be; or (b) to which is transferred all or substantially all the assets and undertaking of a Subsidiary which immediately 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 then latest audited accounts of such Subsidiary and us. Person means any individual, limited liability company, corporation, company, firm, partnership, joint venture, tribunal, undertaking, association, organization, trust, government or political subdivision or agency or instrumentality of a state or any other entity or organization, in each case whether or not being a separate legal entity. QS means a qualifying security being a validly issued and enforceable instrument which may be in the form of: (i) a depositary receipt issued in respect of one Share on terms similar to those applying to the ADSs but which 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 shares pursuant to Indian delisting regulations; or (c) in order to allow holders to accept an offer by us to buy back Shares; or (d) otherwise as set out in the relevant depositary facility; an equity share issued by us with differential rights as to dividends and/or voting (in comparison to the existing Shares), provided that in the case of a share with differential rights as to dividends, the rights to receive dividends with respect to such share shall be at least as favorable as the right to receive dividends with respect to our existing Shares, and provided that we obtain an opinion from an Independent Financial Institution that in their opinion, based on the terms of the relevant share, when issued it is reasonably likely to be purchased and sold at prices which are determined by reference to the Shares; or a depositary receipt issued in respect of an equity share as set forth in subsection (ii), provided that we obtain an opinion from an Independent Financial Institution that in their opinion, based on the terms of the relevant share and depositary receipt, when issued it is reasonably likely to be purchased and sold at prices which are determined by reference to the Shares.

(ii)

(iii)

Qualifying Issue means the offering and listing of QSs which in aggregate complies with the rules of a Relevant 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 the companies 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; 67

(b) the aggregate number of Shares underlying or related to the QSs listed and available for trading on the Relevant Stock Exchange or on an over-the-counter basis is equal to or greater than 75% of the number of Shares which would have been issued in the event that all of the CARS were converted on the day of 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 after the issue and listing of any such QSs (see Conversion Conversion Right) and which would be applicable 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) the Maturity Date of such CARS if such CARS has not been redeemed, repurchased and cancelled or converted in accordance with its terms prior to the Maturity Date. Relevant Stock Exchange means any one of the London Stock Exchange, the Luxembourg Stock Exchange, the SGX-ST, the Tokyo Stock Exchange or any other exchange that may be approved by an Independent 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 whose equity share capital is then beneficially owned by us and/or by one or more of our Subsidiaries or (ii) any company, the composition of the board of directors of which is controlled (within the meaning of the Companies Act, 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 respect of the QSs then the Independent Financial Institution will at the request of the Trustee (at our cost) request quotations from international investment banks for the sale of QSs or otherwise will determine (without having any obligation to purchase QSs) the applicable sale price of the QSs on such Trading Day , (ii) with respect to the Shares, a day when the BSE is open for business; provided, however, that, if no transaction price or closing bid and offered prices are reported by the BSE in respect of the Shares for one or more Trading Days, such day or days will be disregarded in any relevant calculation and will be deemed not to have existed when ascertaining any period of consecutive Trading Days, (iii) with respect to our Capital Stock (other than Shares and QSs), a day on which the Selected Exchange is open for trading or quotation; provided, however, if no bid price is reported by the Selected Exchange in respect of such Capital Stock (other than Shares and QSs) for one or more Trading Days, such day or days will be disregarded in any relevant calculation and will be deemed not to have existed when ascertaining any period of Consecutive Trading Days, (iv) with respect to the ADSs, a day on which the NYSE is open for trading or quotation; provided, however, that, if no transaction price or closing bid and offered prices are reported by the NYSE in respect of the ADSs for one or more Trading Days, such day or days will be disregarded in any relevant calculation and will be deemed not to have existed when ascertaining any period of consecutive 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 holders thereof 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 classes shall have, or might have voting power by reason of the happening of any contingency). 68

General Except in the limited circumstances set forth under Individual Securities, the CARS will only be issued in book-entry form. Accordingly, the following description of the CARS which makes reference to Certificated 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 be limited to US$490,000,000. The CARS will be redeemed on July 12, 2012 (the Maturity Date) unless previously 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 available funds. Any payments of principal of the CARS scheduled to be made on a date that is not a Business Day need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on such date. Each CARS will be convertible, subject to certain limitations and compliance with certain conditions and procedures (see Conversion Conversion Right and Procedures; Conversion Notice; Taxes and Duties) (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 no longer convertible into QSs, into Shares or ADSs (each ADS currently representing one Share) at their election or (iii) in the event that there has not been a Qualifying Issue of QSs, at the Holders election into Shares or ADSs. A Holder may convert his CARS on any Business Day during the period (the Conversion Period) commencing on the Conversion Period Commencement Date and ending at the close of business 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 if such day shall not be a Business Day at such place, on the immediately preceding Business Day at such place. The Conversion Period will not include any Closed Period. The Conversion Right and the Change of Control Conversion Right (each as defined herein) during any Closed Period shall be suspended and the Conversion Period and Right of Control Conversion Period shall not include any Closed Period. Holders that deliver a Conversion Notice during a Closed Period will not be permitted to convert their CARS until the Trading Day following the last day of that Closed Period, which (if all other conditions 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 and the Indenture, and the CARS may be presented for payment, registration of transfer or conversion at our office or 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 long as the CARS are listed on the SGX-ST, and the rules of that exchange so require, in Singapore (iii) in a European Union member state that will not be obliged to withhold or deduct tax pursuant to a directive or any law implementing or complying with, or introduced in order to conform to, such directive and (iv) in each other place 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 the appointment of any Paying Agent, Transfer Agent or Conversion Agent and to appoint further or other Paying Agents, Transfer Agents and Conversion Agents, provided that we will at all times maintain Paying Agents having offices in London and Singapore (as long as the CARS are listed on the SGX-ST and the rules of that exchange so require). Notice of any such termination or appointment and of any changes in the specified offices 69

of the Paying Agents, Transfer Agents or Conversion Agents will be given promptly by us to the Trustee in accordance 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, or otherwise, at any price. A CARS does not cease to be outstanding because we or an Affiliate hold such CARS; provided, however, that in determining whether the Holders of the requisite principal amount of CARS have given or concurred in any request, demand, authorization, direction, notice, consent or waiver under the Indenture, CARS owned by us or any of our Affiliates shall be disregarded and deemed not to be outstanding, 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 actually received written notice from us shall be so disregarded. Ranking The CARS will constitute our direct, unsecured and unsubordinated obligations ranking pari passu among themselves, without any preference of one over the other by reason of priority of date of issue or otherwise, and equally 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 the name of Citivic Nominees Limited as nominee of, and deposited with, Citibank, N.A., a common depositary for Euroclear and Clearstream, Luxembourg. The CARS will be denominated in principal amounts of US$100,000 and 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, we will give notice of this to the Holders. This notice will be given by mail and by publication in an Authorized Newspaper and shall specify, among other things, the procedures for receiving individual CARS and for receiving 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 of QSs, Shares or ADSs made upon conversion of the CARS are to be made free and clear of, and without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature (Taxes) imposed or levied by or on behalf of India or any Taxing Authority therein or thereof, unless the withholding or deduction of such Taxes is required by law. In that event, we will pay such additional amounts (Additional Amounts) as may be necessary in order that the net amounts received by the holders of the CARS after such withholding or deduction shall equal the respective amounts of principal and premium, which would have been receivable in respect of the CARS in the absence of such withholding or deduction, 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, member or shareholder of, or possessor of power over, the Holder or beneficial owner, if the Holder is an estate, 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, or having had) some present or former connection with India otherwise than by reason only of the holding of any CARS or the receipt of principal in respect of any CARS; 70

(ii)

to or on behalf of a Holder or beneficial owner who would not be liable for or subject to such deduction or withholding by (a) making an accurate declaration of non-residence or other appropriate claim 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 such compliance is required by the applicable law of the relevant Tax Authority as a precondition to exemption from, or reduction in the rate of imposition, deduction or withholding of, such Taxes); to or on behalf of a Holder or beneficial owner who presents such CARS (where presentation is required) for payment more than 30 days after the Relevant Date except to the extent that the Holder or beneficial owner thereof would have been entitled to such Additional Amounts on presenting the same for payment on the last day of such 30-day period; to any Holder that is a fiduciary or partnership or any person other than the sole beneficial owner of such payment or CARS, to the extent that a beneficiary or settlor with respect to such fiduciary, a member of such a partnership or the beneficial owner of such payment or CARS would not have been entitled to the Additional Amounts had such beneficiary, settlor, member or beneficial owner been the actual Holder; in respect of any withholding or deduction imposed on a payment that is made pursuant to the European Union Directive on the taxation of savings implementing the conclusions of the European Council of Economic and Finance Ministers (ECOFIN) meeting on June 3, 2003, or any law implementing or complying with, or introduced in order to conform to, such Directive; in respect of any withholding or deduction that is imposed on a CARS presented for payment by or on behalf of a Holder who would have been able to avoid such withholding or deduction by presenting such CARS to another paying agent in a member state of the European Union if the Holder is a resident in the European Union, or to another paying agent in the United States if the Holder is a resident in the United States; or

(iii)

(iv)

(v)

(vi)

(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, personal property or any similar Taxes or (b) any Taxes which is payable otherwise than by deduction or withholding from payments of principal on the CARS; provided that, except as otherwise set forth in the CARS and in the Indenture, we will pay all stamp and other duties, if any, which may be imposed by India, the United States or any respective political subdivision thereof or any taxing authority of or in the foregoing, with respect to the Indenture 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, it means the date on which, the full amount of such monies having been so received, notice to that effect shall have been duly given to the holders of the CARS. Unless the context otherwise requires, any reference in the CARS and in this Offering Memorandum to principal 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 at our option, and subject to relevant Indian laws and regulations, in whole but not in part, upon not less than 30 nor more than 60 days notice to the Holders (which notice shall be irrevocable), at a redemption price equal to the Early Redemption Amount, including any Additional Amounts, provided, that prior to the date on which the 71

notice of redemption is given by us, less than 10% in aggregate principal amount of the CARS originally issued is outstanding. Upon the expiry of any such notice, we will be bound to redeem the CARS at their Early Redemption 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, in whole but not in part, upon not less than 30 nor more than 60 days notice to the Holders (which notice shall be irrevocable), 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 any political subdivision or taxing authority thereof or therein) or any regulations or rulings promulgated thereunder or any change in the official interpretation or official application of such laws, regulations or rulings, or any change in the official application or interpretation of, or any execution of or amendments to, any treaty or treaties affecting 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 be required on the Maturity Date to pay Additional Amounts not currently payable with respect to the CARS, and such obligation cannot be avoided by the use of reasonable measures available to us. Prior to any redemption of the CARS, we will deliver to the Trustee a certificate signed by two directors stating the obligation referred to above cannot be avoided by taking reasonable measures available to us and an opinion of independent internationally 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 accept such 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 and approvals, governmental or otherwise, necessary to exempt payments on the CARS in US dollars from Indian withholding 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 will redeem the CARS on the Maturity Date at a redemption price equal to 131.82% of the outstanding principal amount thereof together with any Additional Amounts. The CARS may be redeemed prior to the Maturity Date only as described herein. Redemption Procedures Provided that we obtain all approvals required by law and the Trustee or the Paying Agent receives the notice of redemption (together with any necessary endorsements), payment of the relevant redemption price for any CARS will be made on the Redemption Date or, if such CARS is a Certificated Security and has not been so delivered on or prior to the Redemption Date, at the time of delivery of such CARS to the Trustee or any Paying Agent. If the Trustee or relevant Paying Agent holds, in accordance with the terms of the Indenture, cash sufficient to pay the relevant redemption price of such CARS on the Redemption Date, then, immediately after such Redemption Date, whether or not such CARS is delivered to a Paying Agent or Transfer Agent, such CARS will cease to be outstanding, such CARS will be deemed to be paid, and all other rights of the Holder shall 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 shall specify, among other things, the Redemption Date, the price at which such CARS will be redeemed and the place or places of payment and that payment will be made upon presentation and surrender of the CARS to be redeemed. Such notice shall also specify the Conversion Price then in effect and the date on which the right to convert such CARS will expire. Under current RBI regulations applicable to convertible alternative reference securities, we are required to obtain the prior approval of the RBI before effecting any repurchase or redemption of the CARS prior to the Maturity Date. 72

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 to trading on the BSE and the NSE (a Delisting), we will, within 10 Business Days after the Delisting, notify the Holders of such Delisting (with a copy to the Trustee), and each Holder shall have the right (the Delisting Repurchase Right), at such Holders option, to require us to repurchase all (or any portion of the principal amount thereof which is US$100,000 or any integral multiple thereof) of such Holders CARS at a price equal to the Early Redemption Amount, on the Delisting Repurchase Date (the Delisting Repurchase Price) on the date set by us for such repurchase (the Delisting Repurchase Date), which shall be not less than 30 days nor more than 60 days following the date on which we notify the Holders of the Delisting (with a copy to the Trustee). 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 to us, each Holder shall have the right (the Change of Control Repurchase Right), at such Holders option, to require us to repurchase all (or any portion of the principal amount thereof which is US$100,000 or any integral multiple thereof) of such Holders CARS on the date set by us for such repurchase (the Change of Control Repurchase Date), which shall be not less than 30 days nor more than 60 days following the date on which we notify the Holders of the Change in Control (with a copy to the Trustee), at the Early Redemption Amount together with any Additional Amounts on the Change of Control Repurchase Date (the Change of Control Repurchase 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 our Board of Directors or other governing body, whether obtained directly or indirectly, and whether obtained by ownership 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 or persons 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 other person, unless the consolidation, merger, sale or transfer will not result in the other person or persons acquiring 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 our Voting Stock. However, a Change of Control will not be deemed to have occurred solely as a result of the issuance or transfer, 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 a separate legal entity. A person does not include our Board of Directors or any other governing board and does not include our subsidiaries or Affiliates immediately before the time of the Change of Control unless the entry by 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 the majority of the members of our Board of Directors.

73

Repurchase Procedures Promptly after becoming aware of, and in any event within 10 days after, a Delisting or a Change of Control, we will provide to each Holder and, for so long as the CARS are listed on the SGX-ST, and the rules of such exchange so require, to publish in an Authorized Newspaper as well as through Euroclear and Clearstream, a notice regarding such Delisting Repurchase Right or Change of Control Repurchase Right, as the case may be, which notice shall state, as appropriate: (i) (ii) (iii) (iv) (v) (vi) the Delisting Repurchase Date or the Change of Control Repurchase Date, as the case may be (each, a Purchase Date); in the case of a Delisting, the date of such Delisting and, briefly, the events causing such Delisting; in the case of a Change of Control, the date of such Change of Control and, briefly, the events causing such Change of Control; the date by which the Holder Purchase Notice (as defined below) must be given; the Delisting Repurchase Price or the Change of Control Repurchase Price, as the case may be, and the method by which such amount will be paid; the names and addresses of all Paying Agents;

(vii) briefly, the Conversion Right (as defined below) of the Holders and the then current applicable Conversion Price; (viii) the procedures that Holders must follow and the requirements that Holders must satisfy in order to exercise 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 the Change of Control Repurchase Right, as the case may be, the Holder must deliver a written irrevocable notice of the exercise of such right (a Holder Purchase Notice) to any Paying Agent on any Business Day prior to the close of business (being 3:00 p.m.) at the location of such Paying Agent on such day and which day is not less than 20 Business Days prior to the Purchase Date. Payment of the Delisting Repurchase Price upon exercise of the Delisting Repurchase Right or payment of the Change of Control Repurchase Price upon exercise of the Change of Control Repurchase Right, for any Certificated Security for which a Holder Purchase Notice has been delivered is conditioned upon delivery of such Certificated Security (together with any necessary endorsements) to any Paying Agent on any Business Day together with the delivery of such Holder Purchase Notice and will be made promptly following the later of the Purchase Date and the time of delivery of such Certificated Security. If the Paying Agent holds on the Purchase Date money sufficient to pay the Delisting Repurchase Price or the Change of Control Repurchase Price, as the case may be, of CARS for which Holder Purchase Notices have been delivered in accordance with the provisions of the Indenture, then, whether or not such CARS is delivered to the Paying Agent, on and after such Purchase Date, (i) such CARS will cease to be outstanding; (ii) such CARS will be deemed paid; and (iii) all other rights of the Holder shall terminate (other than the right to receive the Delisting Repurchase Price or the Change 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 will procure that none of our Material Subsidiaries will, create or permit to subsist any Liens for the benefit of the 74

holders of any Debt Instruments upon the whole or any part of our or, as the case may be, any such Material Subsidiarys property or assets, present or future, to secure: (i) (ii) (iii) payment of any sum due in respect of any Debt Instruments; any payment under any guarantee of any Debt Instruments; or any indemnity or other like obligation in respect of any Debt Instruments, without in any such case at the same time according to the CARS the same security as is granted to or is outstanding in respect of such Debt Instruments or such guarantee, indemnity or other like obligation or such other security as 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 under the laws of India, provided that (i) any successor entity expressly assumes our obligations under the CARS and Indenture, (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 of Control Conversion Right during the Change of Control Conversion Period (as defined below) to convert its CARS, in whole or in part (being US$100,000 in principal amount or an integral multiple thereof), at the option of such converting Holder, upon delivery of an irrevocable notice (the Conversion Notice) together with the CARS at the office of the Conversion Agent, on any Business Day prior to the close of business (being 3:00 p.m.) at the location of the Conversion Agent to which such Conversion Notice is delivered, (i) (ii) (iii) in the event that there has been a Qualifying Issue of QSs, into QSs; or in the event that there has been a Qualifying Issue of QSs but we notify Holders that CARS are no longer convertible into QSs, into Shares or ADSs at their election; or in the event that there has not been a Qualifying Issue of QSs, at the Holders election into Shares or ADSs,

provided, however, that the Conversion Right and the Change of Control Conversion Right during any Closed Period (as defined below) shall be suspended and the Conversion Period and the Change of Control Conversion Period shall not include any such Closed Period. Closed Period means the periods of (i) 20 days prior to the date 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 receipt of dividends, subscription of shares due to capital increase or other benefits, to the record date for the distribution or allocation of the relevant dividends, rights and benefits or (iv) such other periods determined by Indian law applicable from time to time that we are required to close our stock transfer books. We will give notice of such Closed Period to the Trustee, the Holders and the Conversion Agent in accordance with the provisions of the Indenture. The Holders election to receive ADSs on conversion will be subject to compliance with the terms and conditions of the Deposit Agreement or such other depositary facility which may be established from time to time and in accordance with applicable law. The number of QSs, Shares or ADSs to be delivered upon conversion will be determined by dividing the aggregate principal amount of all the CARS to be converted by such Holder (translated into rupees at the fixed 75

exchange rate of Rs.40.59 = US$1.00 (the Fixed Exchange Rate)) by the applicable Conversion Price in effect on the Conversion Date, and in the case of conversion for ADSs, dividing such quotient by the number of Shares represented by each ADS on the Conversion Date and in the case of conversion for QSs, making such adjustments as may be required to relate to one Share. As of the date of this Offering Memorandum, each ADS represents one Share. Fractions of QSs, Shares or ADSs will not be issued on conversion, and no cash adjustments 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 QSs in accordance with paragraph (i) above, the Conversion Price for conversion into QSs will be reset with effect from 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 into Rupees 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 reset Conversion 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 notify Holders that CARS are only convertible into Shares or ADSs, the Conversion Price shall not be so reset (and any prior reset shall be reversed) so that the then current Conversion Price will be the initial Conversion Price as adjusted in accordance with Adjustments below. The Conversion Price shall be subject to Antidilution Adjustment at all times. In the event that a Change of Control has occurred the Conversion Rights of the Holders (the Change of Control Conversion Right) will be effective from the date of the Change of Control and ending at the close of business 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 if such 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 any Closed Period. Holders exercising the Change of Control Conversion Right may convert their CARS into Shares 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 within 40 days of the Conversion Date QSs to or to the order of the converting Holder to the account or accounts specified in the relevant Conversion Notice. The depositarys delivery to the account or to the order of a converting Holder of such QSs will be deemed to satisfy our obligation to pay the principal and premium on such CARS. In the event that the QSs are in the form of depositary receipts we will, as soon as practicable, but in no event more than 40 days after the Conversion Date, deliver to the custodian under the deposit agreement constituting such QSs a sufficient number of Shares or other equity shares (with differential rights as to dividends 76

and/or voting) to represent the QSs such Holder is entitled to receive upon conversion. Such Shares or other equity shares will be registered in the name of the depositary or its nominee and deposited in accordance with the terms of the deposit agreement constituting such QSs. We agree to take all such action and obtain all such approvals necessary in order for such QSs to be issued against deposits of Shares or other equity shares in the depositary facility. Converting Holders are also hereby notified that in the event that the QSs are in the form of depositary receipts under the terms and conditions of the deposit agreement constituting such QSs, the converting Holder will be required to comply with all applicable requirements relating to deposits of Shares or other equity shares under the deposit agreement constituting such QSs and that there will be restrictions on voting rights and the ability of the holder of such QSs in depositary receipt form to exchange their receipts for Shares or other equity shares. We will procure that on receipt by any depositary from such Holder of any applicable QS issuance fees and applicable written acknowledgements, certifications and agreements, the depositary shall deliver the applicable 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 a depository account with a depositary participant under the Depositories Act (Act 22), 1996 of India for the purposes of receiving the Shares. Upon exercise by a Holder of its Conversion Right for Shares, we will, as soon as practicable, and in any event not later than 40 days after the Conversion Date cause the relevant securities account of the holder(s) of the Shares or of his/their nominee, to be credited with such number of the relevant Shares on or with effect from the relevant Conversion Date and shall further cause the name of the holder(s) or his/their nominee to be registered accordingly, in the record of the depositors, maintained by the depository registered under the Depositories Act (Act 22), 1996 of India, with whom we have entered into a depository agreement. Converting Holders will be deemed to have acknowledged, represented and agreed not to transfer such Shares 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 to be listed on the BSE, the NSE and any other stock exchanges in India on which the Shares are listed from time to time, and will be tradable on such stock exchanges once listed, which is expected to occur within 40 days from the date of issue of such Shares and, in any event, prior to the date the Shares are delivered to Converting Holders. Delivery of ADSs upon Conversion Upon exercise by an entitled Holder of its Conversion Right for ADSs, we will deliver, as soon as practicable, but in no event more than 40 days after the Conversion Date, to the Custodian under the Deposit Agreement a sufficient number of Shares to represent the ADSs such Holder is entitled to receive upon conversion. Such Shares will be registered in the name of the Depositary or its nominee and deposited in accordance 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 issued against 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 Shares under the Deposit Agreement as described under Description of the American Depositary Shares Issuance of ADSs upon Deposit of Shares. 77

Upon delivery to and deposit with the Custodian of a sufficient number of Shares underlying the ADSs to which such Holder is entitled upon conversion, and receipt by the Depositary from such Holder of the applicable ADS 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 the converting Holder. The Depositarys delivery to the account or to the order of a converting Holder of such ADSs will 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 York Stock Exchange. The Shares represented by such ADSs are expected to be listed on the BSE, the NSE and any other stock exchanges in India on which the Shares are listed from time to time, and will be tradable on such stock exchanges once listed thereon, which is expected to occur within 40 days after the issuance of such Shares and, in any event, prior to the date of the delivery of the Shares represented by ADSs issued upon conversion of the 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 the CARS and the Indenture, but also to applicable Indian laws and regulations. In order to effect a conversion, a converting Holder must deliver at such Holders expense during the Conversion Period at the office of the Conversion Agent the CARS to be converted, and any certificates and other documents as may be required under the laws of the Republic of India or the jurisdiction in which the office of the Conversion Agent is located or the Deposit Agreement and any expenses or other payments required to be paid by the Holder pursuant to the terms of the Indenture and CARS. In addition, a converting Holder must complete, execute and deliver at such Holders expense, a Conversion Notice (in duplicate) at the office of the Conversion Agent between 9 a.m. and 3 p.m. on any Business Day at the location of the Conversion Agent during the applicable Conversion Period. A Conversion Notice delivered outside the hours specified above or on a day which is not a Business Day at the office of the relevant Conversion Agent shall for all purposes be deemed to 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 consent in writing. Holders that deposit a Conversion Notice during a Closed Period will not be permitted to convert their CARS until the Trading Day following the last day of that Closed Period which (if all other conditions to conversion 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 the applicable Conversion Agent all stamp, issue, registration and similar taxes and duties (if any) arising on conversion in the country in which the CARS is deposited for conversion, or payable in any jurisdiction (other than any taxes or stamp duties payable in India by us in respect of the allotment, issue and delivery of Shares and listing of the Shares on the Indian stock exchanges on conversion or costs associated with the issue and delivery of 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 a person other than the converting Holder. A converting Holder must pay all, if any, taxes arising by reference to any disposal or deemed disposal of a CARS in connection with such conversion. Except as aforesaid, we will pay the expenses arising in India on the delivery of ADSs on conversion of CARS and all charges of the Depositary and the Conversion Agent and the Transfer Agent for the Shares in connection therewith as provided in 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 Deposit Agreement are deposited with us and accepted by a Conversion Agent and the payments, if any, required to be paid by the Holder are made is hereinafter referred to as the Deposit Date. The Conversion Date applicable to a CARS shall mean the Business Day following the Deposit Date, which day, in order to ensure conversion 78

within a specified applicable Conversion Period, must be a Trading Day and must fall within the applicable Conversion Period. The converting Holder must therefore satisfy all such conditions on or before the Business Day 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 as the owner of the Shares representing any ADSs to be delivered upon conversion of such CARS and, subject to any applicable limitations then imposed by Indian laws and regulations, according to the request made in the relevant Conversion Notice, procure that, within 40 Trading Days after the Conversion Date, there be delivered to the custodian under the Deposit Agreement a certificate or certificates for the relevant Shares, registered in the name of the Depositary or its nominee, together with any other property or cash required to be delivered upon conversion and such assignments and other documents (if any) as may be required by law to effect the delivery thereof. Adjustments Antidilution. The Conversion Price will be subject to adjustment (Antidilution Adjustment) in the circumstances described below. Following a Qualifying Issue all references in this section to Shares shall be deemed to be references to QSs with such changes as the Trustee may approve, based on the advice of an Independent Financial Institution, and notified to Holders in order to provide Antidilution protection for the relevant QSs. (i) If we issue Shares as a dividend in Shares or make a distribution of Shares which is treated as a capitalization issue for accounting purposes under Indian GAAP (including but not limited to capitalization of capital reserves and employee stock bonus), then the Conversion Price in effect when such dividend and/or distribution is declared (or, if we have fixed a prior record date for the determination 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 (or at 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 number of Shares, or (c) re-classify any of our Shares into any other of our securities, then the Conversion Price shall be appropriately adjusted so that the holder of any CARS, in respect of the Conversion Date 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 would have held or have been entitled to receive after the happening of any of the events described above had such CARS been converted immediately prior the happening of such event (or, if we have fixed a prior record date for the determination of shareholders entitled to receive any such securities issued upon 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 effect from 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 entitling them to subscribe for or purchase Shares, which expression shall include those Shares that are required to be offered to employees and persons other than shareholders in connection with such 79

grant, issue or offer, at a consideration per Share receivable by us which is fixed on or prior the ex-rights date mentioned below and is less than the Market Value per Share on such date then the Conversion Price in effect on the day preceding that ex-rights date 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, 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 such Market Value. The ex-rights date is the date when the price of our Shares as quoted on the BSE is adjusted to reflect such grant, issue or offer. Subject as provided below, such adjustment shall become effective immediately after the latest date for the submission of applications for such Shares by shareholders entitled to the same pursuant to such rights or (if later) immediately after we fix such consideration 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 to subscribe for or purchase Shares, any Shares which are not subscribed for or purchased by the persons entitled thereto are purchased by other persons after the latest date for the submission of applications for such Shares, an adjustment shall be made to the Conversion Price in accordance with the above provisions which shall become effective immediately after the date we receive the consideration in full 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 to subscribe for or purchase Shares, any such Shares which are not subscribed for or purchased by such other persons as referred to above or by the persons entitled thereto (or persons to whom shareholders have transferred such rights) who have submitted applications for such Shares as referred to above are offered to and/or subscribed by others, no further adjustment shall be made to the Conversion Price by reason 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 purchase Shares at a consideration per Share receivable by us which is fixed at a price that is less than the Market Value per Share on the last Trading Day preceding the date of the announcement of the terms of such issue or grant, then the Conversion Price in effect on the last Trading Day preceding the date of the announcement of the terms of such issue or grant 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, at the close of business in Mumbai on the last Trading Day preceding 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 consideration where no applications by shareholders entitled to such warrants are required. Where applications by shareholders entitled to such warrants are required, n equals the number of Shares that equals (A) the number of warrants that the underwriters have agreed to underwrite as referred to below or, as the case 80

may be, (B) the number of warrants for which applications are received from shareholders as referred to 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 such Market Value per Share. Subject as provided below, such adjustment shall become effective (i) where no applications for such warrants are required from shareholders entitled to the same, upon their issue and (ii) where applications by shareholders entitled to the same are required, immediately after the latest date for the submission of applications for such warrants by shareholders entitled to the same pursuant to such rights or (if later) immediately after we fix such consideration but retroactively to immediately after the last Trading Day preceding the date of the announcement 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 the actual Shares received upon exercise. If, in connection with a grant, issue or offer to the holders of Shares warrants entitling them to subscribe for or purchase Shares where applications by shareholders entitled to the same are required, any warrants which are not subscribed for or purchased by the persons entitled thereto are agreed to be underwritten by other persons after the latest date for the submission of applications for such warrants, an adjustment shall be made to the Conversion Price in accordance with the above provisions which shall become effective immediately after the date we receive the consideration in full from such other persons but retroactively to immediately after the last Trading 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 for or purchase Shares where applications by shareholders entitled to the same are required, any such warrants which are not subscribed for or purchased by the underwriters who have agreed to underwrite as referred to above or by the shareholders entitled thereto (or persons to whom shareholders have transferred such rights) who have submitted applications for such warrants as referred to above are offered to and/or subscribed by others, no further 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 Capital Stock other than Shares, evidences of indebtedness or other of our assets (other than cash distributions described below), or rights or warrants to subscribe for or purchase any of our Capital Stock (other than Shares) at less than the Market Value of such indebtedness, assets or Capital Stock, determined as of the date on which our Board of Directors approves such distribution, then in each such case the Conversion Price shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price in effect on the last Trading Date preceding the date of the announcement of the terms 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 Fair Market Value (as determined by our Board of Directors, whose determination shall, if made in good 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 warrants applicable 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) described herein expire prior to exercise, the Conversion Price will be adjusted to reflect the actual securities received upon exercise. For the avoidance of doubt, in the event the price of our Shares as quoted on the BSE is not readjusted to reflect the actual securities received upon exercise, no further adjustment shall be made to the Conversion Price. 81

(vi) In case we shall, by dividend or otherwise, distribute cash (excluding any dividend or distribution that is not an Extraordinary Cash Dividend, as defined below) to all holders of Shares then, in such case, the Conversion Price shall be adjusted (with such adjustment to be effective on the record date for the determination of shareholders entitled to receive such distribution) in accordance with the following formula: 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 the Conversion 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 total amount of: (a) any cash dividends or other cash distributions we pay or declare on the Shares, prior to deduction of any withholding tax or dividend distribution tax (including any Indian dividend distribution tax) plus any corporate dividend or distribution tax attributable to that dividend or distribution on the Shares (in each case, whether such withholding tax or dividend distribution tax or corporate level dividend or distribution 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 the effective date (other than any dividend or portion thereof previously deemed to be an Extraordinary Cash Dividend) (the previous dividends), except that where the date of announcement for dividends for two different fiscal years has occurred in such 365 day period, such dividends relating to the earlier 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 during the 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 Day during the relevant period. The Relevant Period means the period beginning on the first Trading Day after the record date for the first cash dividend aggregated in the total current dividend, and ending on the Trading Day immediately preceding the record 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 record date 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.

82

(vii) In case a tender or exchange offer made by us or any of our Subsidiaries for all or any portion of the Shares shall expire and such tender or exchange offer shall involve the payment by us or such Subsidiary of consideration per Share having a Fair Market Value (as determined by our Board of Directors, 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 exchange offer (as it shall have been amended) that exceeds the Market Value per Share, as of the Expiration Date, 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 Expiration Date. 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 the acceptance (up to a maximum specified in the terms of the tender or exchange offer) of all Shares validly tendered or exchanged and not withdrawn as of the Expiration Date (the Shares deemed so accepted 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 day following the Expiration Date. If we are obligated to purchase Shares pursuant to any such tender or exchange offer, but we are permanently 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 such tender or exchange offer had not been made. (viii) In case we issue Shares (other than Shares based on any of the circumstances described in subsections (i) and (ii), Shares issued on exercise of rights or warrants or on conversion or exchange of any convertible or exchangeable securities granted, offered or issued by us in any of the circumstances 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 exchangeable for Shares at a price per Share less than the Market Value per Share determined as of the last Trading Day preceding the date of announcement of the terms of such issuance of securities, the Conversion Price 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 or initially convertible or exchangeable securities. n = the number of Shares issued or issuable upon conversion or exchange of such initially convertible or exchangeable securities. v = the number of Shares which the aggregate consideration issue price of the total amount of Shares or 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 to exercise or if such convertible or exchangeable securities are for any reason not issued, the Conversion Price shall be readjusted to reflect the actual securities converted or exchanged. 83

If we determine, either by ourselves or in consultation with a leading independent securities company or merchant bank in Mumbai selected by us, that any event or circumstance analogous to the events and circumstances described above in (i) through (viii) has occurred and has substantially the same effect as such event or circumstance described above, the Conversion Price shall be adjusted in a manner that in our opinion fairly 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 of doubt, for the purpose of subsections (i) to (viii) above, outstanding shares shall include any such Shares purchased by us in treasury. In any case in which the Indenture shall require that an adjustment be made immediately following a record date, we may elect to defer the effectiveness of such adjustment (but in no event until a date later than the effective 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 the relevant holder the number of Shares (in the form of ADSs) deliverable upon such conversion in excess of the number of Shares (in the form of Shares or ADSs) deliverable thereupon only on the basis of the Conversion Price 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) deliverable on 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 and other property receivable upon such Merger by a holder of the number of Shares into which such CARS could have been converted immediately prior to such Merger, ignoring any Qualifying Issue. The corporation formed by such Merger or the Person that acquired such properties and assets shall enter into supplemental Indenture with the Trustee to provide for the continuation of the Conversion Rights in respect of Shares only after such Merger and such supplemental Indenture shall provide for adjustments to the Conversion Price which shall be as nearly 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 scheme adopted by us and approved by our shareholders and Board of Directors, we issue to our employees (or the employees of any of our Subsidiaries) options to purchase our Shares, or (ii) if we issue Shares (in the form of Shares 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 to be 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 of failure to meet the 1.0% threshold, will be carried forward. Except as otherwise described below, we may reduce the Conversion Price at any time. We will not take any action which would reduce the Conversion Price per Share below the par value of the Shares (which was Rs.10 per Share at the date of this Offering Memorandum), unless, under applicable law then in effect, the CARS could (if they were converted into Shares) be converted at such reduced Conversion Price into 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 the Antidilution Adjustments below the SEBI Floor Price or a level permitted by applicable Indian laws and regulations from time to time (if any) including (but not limited to) any regulation prescribed by the Indian Ministry 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 the nearest .001 of a share of securities or other property or nearest cent, as the case may be. 84

Whenever the Conversion Price is adjusted, we will promptly deliver to the Trustee a certificate signed by two directors setting forth the Conversion Price after such adjustment and setting forth particulars relating to adjustment 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 date on which such adjustment takes effect, whether an amount is to be carried forward pursuant to the third preceding paragraph and if so, the amount to be carried forward and any other information as the Trustee may reasonably require). Promptly after delivering such certificate, we will prepare a notice containing the same information and shall instruct the Trustee to give such notice of such adjustment of the Conversion Price in the form approved by the Trustee to each Holder and each of the Agents. For so long as the CARS are listed on the SGX-ST, and the rules of such stock exchange so require, we will inform the SGX-ST and publish such notice to Holders in a daily newspaper 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 of Default) under the CARS: (i) default in the payment of all or any part of the principal and premium of any of the 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 or agreements on our part contained in the CARS or the Indenture for a period of 60 days after the date on which written notice specifying such failure, stating that such notice is a Notice of Default under such CARS and demanding that we remedy the same, shall have been given in accordance with the Indenture by the holders of at least 25% in aggregate principal amount of the CARS at the time outstanding; or (iii) any of our present or future indebtedness for borrowed money in the aggregate outstanding principal amount of US$10 million or more either (a) becoming due and payable prior to the due date for payment thereof by reason of acceleration thereof following our default or (b) not being repaid at, and remaining unpaid after, maturity as extended by the period of grace, if any, applicable thereto, or any guarantee or indemnity given by us in respect of indebtedness of any other 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 such indebtedness shall be cured or waived, then the default under the CARS by reason thereof shall be deemed to have been cured or waived; or (iv) a distress, attachment, execution or other legal process is levied, enforced or sued upon or against any material part of our property, assets or revenues by any person or entity and is not either discharged or stayed within 120 days unless enforcement or suit is being contested in good faith and by appropriate proceedings; or (v) an encumbrance takes possession or a receiver or other similar person is appointed 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 or terminated or the debt on account of which such possession was taken or appointment or attachment was made is not discharged or satisfied within 120 days of such possession, appointment or the issue of such order; or (vi) we are 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 for or 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 Financial Reconstruction (BIFR) under the Sick Industrial Companies (Special Provisions) Act, 1985 (or any successor thereto), 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 stayed within 60 days of its taking effect or takes any proceeding under any law for a readjustment or deferment of our obligations or any part of them or make or enter into a general assignment or an arrangement or composition with or 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 securityholders represented and voting at a meeting for such purpose; or (vii) an order of a court of competent jurisdiction is made or an effective resolution passed for our winding-up or dissolution, or we cease to carry on all or substantially all of our business or operations 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 85

securityholders represented and voting at a meeting for such purpose; or (viii) any Governmental authority or agency 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 and such failure and continuation of such failure for five Business Days or to deliver the QSs or ADSs as required following conversion of the CARS; or (xi) any event occurs which under the laws of any relevant jurisdiction has 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 then outstanding, by notice to us and the Trustee as provided in the Indenture, may declare the principal of the CARS 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 such notice, all events of default provided for in the CARS and the Indenture shall have been cured. If, at any time after the CARS shall have been so declared due and payable, and before any judgment or decree for the payment of the monies due shall have been obtained or entered, we shall pay or deposit with the Trustee a sum sufficient to pay all monies then due with respect to the CARS (other than amounts due solely because of such declaration) and cure all other Events of Default, then the Holders of more than 50% in aggregate outstanding principal amount of the CARS may waive all defaults and rescind and annul such declaration and its consequences. If an Event of Default upon the CARS were to occur and a judgment subsequently was obtained in favor of the holders of CARS in an action brought in the United States, enforcement in India of such a judgment or of the Holders rights under the CARS may be subject to significant delays. Indian judicial processes (including those required to obtain judgment on debt obligations, to seek judicial enforcement of such judgments and to compel the winding up of companies) can be very lengthy, often requiring many years to resolve. Subject to certain conditions, Indian companies facing significant financial difficulties can seek rehabilitation, and protection 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 held by us in trust, for the payment of the principal of any CARS and remaining unclaimed for two years after the date upon which such principal of any CARS shall have become due and payable shall promptly be repaid to or for our account by the Trustee or such Paying, Conversion and Transfer Agent upon our request, the receipt of such repayment to be confirmed promptly in writing by or on our behalf, and, to the extent permitted by law, the holder of such CARS shall thereafter look only to us for any payment which such holder may be entitled to collect, and all liability of the Trustee or such Paying, Conversion and Transfer Agent with respect to such monies shall thereupon cease. Under New York law, any legal action upon the CARS must be commenced within six years after the payment 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 due to an Event of Default, upon a request in writing made by Holders holding not less than 25% of the aggregate outstanding principal amount of the CARS we must convene a meeting of the holders of the CARS. At a meeting of the holders of the CARS, persons entitled to vote a majority in aggregate principal amount of the CARS at the time outstanding shall constitute a quorum. In the absence of a quorum at any such meeting, the meeting may be adjourned; in the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned; at the reconvening of any meeting further adjourned for lack of a quorum, the persons entitled to vote 25% in aggregate principal amount of the CARS at the time outstanding shall constitute a quorum for the taking of any action set forth in the notice of the original meeting. Any resolution at a meeting of 86

holders of CARS to modify or amend, or to waive compliance with, any of the covenants or conditions referred to 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 then outstanding 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 than 50% in aggregate principal amount of the CARS at the time outstanding, or of such lesser percentage as may act at a meeting of Holders; provided that no such modification, amendment or waiver of the Indenture or any CARS may, without the consent of each Holder affected thereby: (i) change the stated maturity of the principal of or premium on any CARS; (ii) reduce the principal of or any premium on any CARS; (iii) change the currency of payment of the principal of or any interest on any CARS; (iv) amend the Conversion Rights, other than 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 the quorum 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 any modification or amendment of any provisions of the Indenture or the CARS for the purposes of curing any ambiguities 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 the same terms and conditions as the CARS in all respects so that such further issue shall be consolidated and form a single series with the outstanding CARS. Trustee Citibank N.A., London Branch will be the Trustee under the Indenture. The Corporate Trust Office of the Trustee is located at 14th Floor, Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB. The Indenture provide that, prior to the occurrence of an Event of Default, the Trustee will not be liable except for the performance of such duties as are specifically set forth in the Indenture. If an Event of Default has occurred and is continuing, the Trustee will be obligated to use the same degree of care and skill as a prudent person would exercise under the circumstances in the conduct of such persons own affairs. Obligation Currency To the fullest extent permitted by applicable law, our obligation under the CARS to make all payments in US dollars (the Obligation Currency) will not be satisfied by any payment, recovery or any other realization of proceeds in any currency other than the Obligation Currency. We have has agreed to indemnify the holders of the CARS in US dollars for any shortfall in the aggregate amount of Obligation Currency actually received by such holders 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 State of New York. We have designated Tata Incorporated, with an office located at 3 Park Avenue, New York, New York, 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 Global Security is held by the book-entry depositary for Euroclear and Clearstream, Luxemburg, notices to owners of beneficial interests in the Global Security may be given by delivery of the relevant notice to such book-entry 87

depositary for communication by it to entitled account holders and so long as any of the CARS are outstanding and listed on the SGX-ST and the rules of such stock exchange so require, we will publish all notices to holders of 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 on transfer 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 receipt by 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 circumstances described under Individual Securities below may be transferred only in accordance with the restrictions on transfer set forth under Transfer Restrictions on the CARS and delivery of any additional documents or other evidence (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 circumstances described under Individual Securities below may not be transferred or exchanged for a beneficial interest in the Global Security. Global Security. The Global Security will be registered in the name of Citvic Nominees Limited as nominee 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 financial institutions 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 be effected only through, records maintained in book-entry form by Euroclear and Clearstream, Luxembourg (with respect to their participants interests) and their participants (with respect to indirect participants in Euroclear and Clearstream, Luxembourg. All interests in the Global Security will be subject to the procedures and requirements of Euroclear and Clearstream, 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 to Euroclear and Clearstream, Luxembourg or a nominee thereof as the registered owners thereof. None of us, the Trustee, the Paying Agents and any custodian, transfer agent or registrar will have any responsibility or liability for the accuracy of any of the records relating to, or payments made on account of, ownership interests in the Global Security or for any notice permitted or required to be given to Holders or any consent given or actions taken by such registered Holders. We expect that upon receipt of any payment in respect of the Global Security representing any CARS held by us or our nominee, Euroclear and Clearstream, Luxembourg, will immediately credit Euroclear and Clearstream, Luxembourg participants accounts with payments in amounts proportionate to their 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 of CARS in definitive form. Accordingly, the ability of beneficial owners to own, transfer or pledge beneficial interests in the Global Security may be limited by such laws. 88

Exchange of CARS through participants in Euroclear and Clearstream, Luxembourg will be effected in accordance 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 and settlement of securities transactions between their respective participants through electronic book-entry changes in 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 traded securities and securities lending and borrowing. Euroclear and Clearstream, Luxembourg participants are financial institutions throughout the world, including underwriters, securities brokers and dealers, banks, trust companies, 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 through or maintain a custodial relationship with a Euroclear or Clearstream, Luxembourg participant, either directly or indirectly. Individual Securities If (i) Euroclear and Clearstream, Luxembourg or any successor to Euroclear and Clearstream, Luxembourg advises us in writing that it is at any time unwilling or unable to continue as a depositary and a successor depositary is not appointed by us within 90 days or (ii) we, in our sole discretion determine not to have the CARS represented by the Global Security and have provided Euroclear and Clearstream, Luxembourg or a successor thereof, with written notice of such election, or (iii) the Trustee advises us in writing that an Event of Default under the CARS has occurred and is continuing for the requisite period and requests the issuance of Certificated Securities, we will issue individual CARS in certificated, definitive registered form in exchange for the Global Security in any authorized denominations and in an aggregate principal amount equal to the principal amount of the Global Security, provided, however, that if an Event of Default referred to in clause (iii) above is waived pursuant to the terms of the Indenture and the CARS, or is no longer continuing, such Certificated Security need not be issued and if already issued may, at the holders request, be represented again by the Global Security in accordance with the Indenture and of the CARS. Upon receipt of such notice from Euroclear and Clearstream, Luxembourg or the Trustee, as the case may be, we will use our reasonable best efforts to make arrangements for the exchange of interests in the Global Security for Certificated Securities and cause the requested Certificated Securities to be executed and delivered to the Registrar in sufficient quantities and authenticated by the Registrar or the Paying Agent on its behalf for delivery to Holders. Persons exchanging interests in the Global Security for Certificated Securities will be required to provide to the Registrar, through the relevant 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 Global Security 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 legal counsel prior to making any offer, resale, pledge or transfer of the CARS or the QSs, Shares or ADSs to be issued on conversion of the CARS. This offering is being made in reliance on Registration S under the Securities Act. 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 any State in the United States or other jurisdiction. The CARS may only be offered, sold or delivered outside the United States to persons other than U.S. persons (as defined in Regulation S under the Securities Act) in offshore transactions in reliance on Regulation 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 in India, 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 owning beneficial interests in the Global Security. Such interests in the Global Security will be shown on, and transfers thereof will be effected only through, records maintained by Euroclear and Clearstream, Luxembourg and their respective 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 be deemed to have acknowledged, represented and agreed as follows (terms used herein that are defined in Regulation 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 any State of the United States and are subject to restrictions on transfer. Each purchaser purchasing during the period ending 40 days after the later of the commencement of the offering 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. 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 on conversion of the CARS except as permitted by the applicable legend set out in paragraph 4 below. The CARS will bear a legend to the following effect, unless we determine otherwise in compliance with 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 UPON CONVERSION OF THE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), AND PRIOR TO THE EXPIRATION OF 40 DAYS AFTER THE LATER OF THE COMMENCEMENT OF THE OFFERING OF THE SECURITIES AND THE LAST RELATED CLOSING (THE DISTRIBUTION COMPLIANCE PERIOD) SUCH SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT, OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION 90

2.

3.

4.

UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS. EACH HOLDER AND BENEFICIAL OWNER, BY ITS ACCEPTANCE OF THIS SECURITY OR AN INTEREST IN THE SECURITIES EVIDENCED HEREBY, REPRESENTS THAT IT UNDERSTANDS AND AGREES TO THE FOREGOING AND FOLLOWING RESTRICTIONS. THIS SECURITY AND THE QSs, SHARES OR ADSs TO BE ISSUED ON CONVERSION OF THE SECURITY AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS SECURITY AND ANY SUCH QSs, ADSs OR SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY AND SUCH QSs, ADSs OR SHARES SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY AND ANY SUCH QSs, ADSs OR SHARES TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT. UPON THE EXPIRATION OF THE DISTRIBUTION COMPLIANCE PERIOD, THE SECURITIES EVIDENCED HEREBY AND THE QSs, SHARES OR ADSs TO BE ISSUED ON CONVERSION OF THE SECURITY SHALL NO LONGER BE SUBJECT TO THE RESTRICTIONS PROVIDED IN THIS LEGEND, PROVIDED THAT AT SUCH TIME AND THEREAFTER THE OFFER OR SALE OF THE SECURITIES EVIDENCED HEREBY BY THE HOLDER HEREOF IN THE UNITED STATES WOULD NOT BE RESTRICTED UNDER ANY APPLICABLE SECURITIES LAWS OF THE UNITED STATES OR OF THE STATES OF THE UNITED STATES. 5. The CARS will initially be represented by the Global Security. Before any CARS evidenced by such Global Security may be sold, the transferor and the transferee will be required to provide written certifications set out in the Indenture relating to the CARS. Any resale or other transfer, or attempted resale or other transfer, of the CARS made other than in compliance with the above-stated restrictions shall not be recognized by us or the Trustee.

6.

Each purchaser of CARS that may wish to resell any CARS pursuant to Regulation S is advised that approval 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 resale transaction could be effected in, on or through the facilities of that exchange in reliance upon the safe harbor provided 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, it must make, in the relevant Conversion Notice, the representations, agreements and acknowledgements set out in the 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 of American Depositary Shares (ADSs), pursuant to which the ADSs that may be issued upon conversion of the CARS for ADSs are to be issued (in the event that there has not been an issue of Qualifying Securities). This summary does not purport to be complete and is subject to and qualified in its entirety by reference to the Deposit Agreement, including the form of ADRs. Terms used herein and not otherwise defined shall have the meanings set forth in the Deposit Agreement. Copies of the Deposit Agreement will be available for inspection at the principal office of the Depositary in New York (the Principal New York Office), currently located at 388 Greenwich Street, 14th Floor, New York, New York 10013 and at the principal office of the Depositary in London (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 information only 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 the date hereof, one Share deposited with the Depositarys custodian in Mumbai, India (the Custodian) and registered in the name of the Depositary or its nominee. An ADS will also represent the right to receive any other property received by the Depositary or the Custodian on behalf of the owner of the ADS but that has not been distributed to the owners of ADSs because of legal restrictions or practical considerations. The Custodian is currently Citibank, N.A., Mumbai, located at 81 Dr. Annie Besart Road, Worli, Mumbai, India 400 018. Only persons in whose names ADSs are registered on the books of the Depositary as holders of the ADSs will be treated 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 and therefore will be bound to its terms and to the terms of any ADR that represents your ADSs. The Deposit Agreement and the ADR specify our rights and obligations as well as your rights and obligations as owner of ADSs and those of the Depositary. As an ADS holder you appoint the Depositary to act on your behalf in certain circumstances. The Deposit Agreement and the ADRs are governed by New York law. However, our obligations to the holders of Shares will continue to be governed by the laws of India, which may be different from the laws in the United States. As an owner of ADSs, you may hold your ADSs by means of an ADR registered in your name, through a brokerage 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 ADSs through your brokerage or safekeeping account, you must rely on the procedures of your broker or bank to assert your rights as ADS owner. Please consult with your broker or bank to determine what those procedures are. This summary description assumes you have opted to own the ADSs directly by means of an ADR registered in your name and, as such, we will refer to you as the holder. When we refer to you, we assume the reader owns ADSs 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 the Custodian and registered in the name of the Depositary, who will be the holder of record on our books or that of our agent of all such Shares. Subject to the terms and conditions of the Deposit Agreement, upon transfer of such Shares to the Custodian, the Depositary will issue and deliver to DTC one or more ADSs. Upon conversion of the CARS into ADSs, the Depositary as the holder of record of the Shares held in the ADS facility may be required to 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 Shares received upon conversion of CARS) with the Custodian. The Depositary will deliver these ADSs to the person 92

you indicate only after you pay any applicable issuance fees and any charges and taxes payable for the transfer of the Shares to the Custodian. Your ability to deposit Shares and receive ADSs may be limited by U.S. and Indian legal considerations applicable at the time of deposit. In particular, in accordance with applicable regulations of the Reserve Bank of India, the Depositary will only be able to accept additional Shares for deposit into the ADS facility 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 all required approvals have been given and that the Shares have been duly transferred to the Custodian. The Depositary 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 the Depositary. 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 or exercised. 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, restricted securities (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 cost and 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 to provide certifications as may be determined by us to be reasonably necessary to confirm that you will not, and that 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 approved for 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 deposited with the Custodian. Your receipt of these distributions may be limited, however, by practical considerations and legal limitations. Holders will receive such distributions under the terms of the Deposit Agreement in proportion to 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 the funds with the Custodian. Upon receipt of confirmation of the deposit of the funds, the Depositary will promptly arrange for the funds to be converted into U.S. dollars and for the distribution of the U.S. dollars to the applicable holders, 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 the dollars 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 Depositary will 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. 93

Distributions of Shares Whenever we make a free distribution of Shares for the securities on deposit with the Custodian, we will deposit the applicable number of Shares with the Custodian. Upon receipt of confirmation of such deposit, the Depositary will either distribute to holders new ADSs representing the Shares deposited or modify the ADS-to-Shares ratio, in which case each ADS you hold will represent rights and interests in the additional Shares so deposited. Only whole new ADSs will be distributed. Fractional entitlements will be sold by the Depositary and 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 Shares will be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the Deposit Agreement. In order to pay such taxes or governmental charges, the Depositary may sell all or a portion of 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 operationally practicable. If the Depositary does not distribute new ADSs as described above, it may sell the Shares received upon the terms described in the Deposit Agreement and will distribute the proceeds of the sale as in the case of a distribution of cash. Distributions of Rights Whenever we intend to distribute rights to subscribe for additional Shares, we will give timely notice to the Depositary prior to the proposed distribution stating whether or not we wish the rights to be made available to holders of ADSs. If we intend the rights to be made available to holders of ADSs, we will assist the Depositary in determining whether it is lawful and reasonably practicable to distribute such rights to purchase additional ADSs to holders. The Depositary will establish procedures to distribute rights to purchase additional ADSs to holders and to enable such holders to exercise such rights if we have timely requested that the rights be made available to holders of ADSs, if it is lawful and reasonably practicable to make the rights available to holders of ADSs, and if we provide all of the documentation contemplated in the Deposit Agreement (such as opinions to address the lawfulness of the transaction). You may have to pay fees, expenses, taxes and other governmental charges to subscribe for the new ADSs upon the exercise of your rights. The Depositary is not obligated to establish procedures to facilitate the distribution and exercise by holders of rights to purchase new Shares other than in the form 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 be distributed 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 and reasonably practicable (in the judgment of the Depositary). The proceeds of such sale will be distributed to holders as 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 in additional Shares in accordance with applicable law, we will give timely notice thereof to the Depositary and will indicate 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 and reasonably practicable. 94

The Depositary will make the election available to holders of ADSs only if we have timely requested that the distribution be made available to holders of ADSs, if the Depositary has determined that the distribution is reasonably practical and if we have provided satisfactory documentation as contemplated in the Deposit Agreement. In such case, the Depositary will establish procedures to enable you to elect to receive either cash or additional 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 on what a shareholder in India would receive upon failing to make an election, as more fully described in the Deposit 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 to holders of ADSs. If we notify the Depositary that we wish such distribution to be made to holders of ADSs, we will assist the Depositary in determining whether such distribution to holders is lawful and reasonably practicable. The Depositary shall not make such distribution unless we have requested that such distribution be made to holders of ADSs, we have provided satisfactory documentation as contemplated in the Deposit Agreement and the Depositary has determined that such distribution is reasonably practicable. If the above conditions are satisfied, 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 holders under the terms of the Deposit Agreement. In order to pay such taxes and governmental charges, the Depositary may 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 the Depositary. If the Depositary receives such notice timely, if the redemption is reasonably practicable and if we provide all of the documentation contemplated in the Deposit Agreement, the Depositary will mail notice of the redemption to the holders. The Custodian will be instructed to surrender the Shares being redeemed against payment of the applicable redemption price. The Depositary will convert the redemption funds received into dollars upon the terms of the Deposit 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 pro rata 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 a change in nominal or par value, a split-up, cancellation, consolidation or reclassification of such Shares or a recapitalization, reorganization, merger, consolidation or sale of assets. 95

If any such change were to occur, your ADSs would, to the extent permitted by law, represent the right to receive the property received or exchanged in respect of the Shares held on deposit. The Depositary may in such circumstances deliver new ADSs to you or call for the exchange of your existing ADSs for new ADSs. If the Depositary may not lawfully distribute such property to you, the Depositary may sell such property and distribute the 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 evidenced thereby. For transfers of ADRs, you will have to surrender the ADRs to be transferred to the Depositary and also must: 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 holders pursuant 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 Depositary with your request to have them combined or split up, and you must pay all applicable fees, taxes, charges and expenses payable by ADR holders, pursuant to the terms of the Deposit Agreement, upon a combination or split up 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 receive the corresponding number of underlying Shares at the Custodians offices. Your ability to withdraw the Shares may be limited by U.S. and Indian legal considerations applicable at the time of withdrawal. In order to withdraw the Shares represented by your ADSs, you will be required to pay to the Depositary the fees for cancellation of ADSs and any charges and taxes payable in relation to the Shares being withdrawn. You assume the risk for delivery of all funds and securities upon withdrawal. Once canceled, the ADSs will not have any rights under the Deposit Agreement. If you hold an ADR registered in your name, the Depositary may ask you to provide proof of identity and genuineness of any signature and such other documents as the Depositary may deem appropriate before it will cancel your ADSs. The withdrawal of the Shares represented by your ADSs may be delayed until the Depositary receives satisfactory evidence of compliance with all applicable laws and regulations. Please keep in mind that the 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 on deposit. 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 to certify in writing upon withdrawal of Shares represented by ADSs that you will not seek to sell any withdrawn 96

Shares on any Indian Stock Exchange if less than 45 days have elapsed since the time of the deposit of such Shares into the ADS facility and such Shares were not approved for listing and trading on the Indian Stock Exchanges at the time of such deposit. In the event the securities on deposit includes Shares that have not been dematerialized and listed for trading on the Bombay Stock Exchange and the National Stock Exchange (i.e., on account of a delay in such listing in connection with a deposit of Shares newly issued in connection with a conversion of one of our bonds), the Shares withdrawn from the ADR facility will be selected first from the Shares that have been dematerialized and listed for trading on the Bombay Stock Exchange and the National Stock Exchange and thereafter from the Shares that have not been so dematerialized and listed. Neither the Custodian, the Depositary or we shall have any liability to any holder of ADSs who receives, upon cancellation of ADSs, any Shares that have not been dematerialized 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 by your 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 ADSs only in accordance with the provisions of the Deposit Agreement and Indian law. Holders of ADSs are not entitled to attend and vote at shareholders meetings. A holder of ADSs may withdraw from the ADS facility the related underlying Shares and vote as a direct shareholder, but there may not be sufficient time to do so after the announcement of an upcoming vote. If requested by us, the Depositary will notify holders of ADSs of upcoming votes and arrange to deliver our voting materials to holders of ADSs. The materials will describe the matters to be voted on and explain how holders of ADSs as of a record date specified by the Depositary may instruct the Depositary to vote the deposited securities underlying the ADSs as directed by the holders of ADSs. For the instructions to be valid, the Depositary must receive them on or before a date specified by the Depositary. We have informed the Depositary that under Indian practice (as presently in effect) proxies are to be submitted to us at least 48 hours before a shareholders meeting, which may result in the Depositary requiring the receipt of voting instructions from holders of ADSs as early as five days before the date of the meeting. The Depositary will try, insofar as practicable, subject to the terms of the Deposit Agreement, Indian laws and the provisions of our Articles of Association, to vote or have its agents vote the deposited securities as instructed. The depositary will only vote as instructed and is not entitled to exercise any voting discretion. If the Depositary timely receives voting instructions from a holder of ADSs which fail to specify the manner in which the Depositary is to vote the deposited securities underlying such holders ADSs, such holder will be deemed to have instructed the Depositary to vote in favor of the items set forth in such voting instructions. If the Depositary does not receive timely instructions from a holder of ADSs, the holder shall be deemed to have instructed the Depositary to give a discretionary proxy to a person designated by us, provided that, no such discretionary proxy shall be given with respect to any matter as to which we inform the Depositary that we do not wish such proxy given or substantial opposition exists or the rights of holders of ADSs will be adversely affected. If requested by us, the Depositary is required to represent all Shares underlying the outstanding ADSs, regardless of whether timely voting instructions have been received from the holders of such ADSs, for the sole purpose of establishing a quorum at a meeting of shareholders. Ownership Restrictions We may restrict, in such manner as we deem appropriate, transfers of the ADSs where such transfer may result in the total number of Shares represented by the ADSs owned by a single holder to exceed limits under applicable law or under our Articles of Association. We may instruct the Depositary to take action with respect to the ownership interest of any holder in excess of the limits set forth in the preceding sentence, including but not limited to, the imposition of restrictions on the transfer ADSs, the removal or limitation, of voting rights or the mandatory sale or disposition on behalf of a holder of Shares represented by the ADSs held by such holder in excess of such limitations. 97

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 Cancellation of ADSs Exercise of rights to purchase additional ADSs Distribution of cash dividends Distribution of ADSs pursuant to stock dividend or other free stock distributions Distributions of cash proceeds (i.e., upon sale of rights or other entitlements) Distribution of securities other than ADSs or rights to purchase additional ADSs Annual Depositary Services Fee

Up to U.S. 5 per ADS issued (including ADSs issued upon conversion of the CARS) Up to U.S. 5 per ADS canceled Up to U.S. 5 per ADS issued No fee (so long as prohibited by NYSE) No fee (so long as prohibited by NYSE) Up to U.S. 2 per ADS held Up to U.S. 5 per share (or share equivalent) distributed Annually up to U.S. 2 per ADS held at the end of each calendar year, except to the extent of any cash dividend fee(s) charged during such calendar year Up to U.S.5 per ADS issued

Distribution of ADSs pursuant to exercise of rights to purchase additional ADSs.

As an ADS holder you will also be responsible to pay certain fees and expenses incurred by the Depositary and 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 in India (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 the Depositary. 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. We undertake to give holders 30 days prior notice of any increase in any fees and charges (other than foreign exchange charges, taxes, delivery charges and other such expenses) and any other modifications that would materially prejudice any of their substantial existing rights under the Deposit Agreement. We will not consider to be materially prejudicial to your substantial rights any modifications or supplements that are reasonably necessary for the ADSs to be registered under the Securities Act or to be eligible for book-entry settlement, in each case without imposing or increasing the fees and charges you are required to pay. In addition, we may not be able to provide you with prior notice of any modifications or supplements that are required to accommodate compliance with applicable provisions of law. You will be bound by the modifications to the Deposit Agreement if you continue to hold your ADSs after the modifications to the Deposit Agreement become effective. The Deposit Agreement cannot be amended to prevent you from withdrawing the Shares represented by your ADSs (except as permitted by law). 98

We have the right to direct the Depositary to terminate the Deposit Agreement at any time. Similarly, the Depositary 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 and the withdrawal of the Shares represented by your ADSs and the delivery of all other property held by the Depositary 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. The Depositary will hold uninvested the net proceeds from such sale and any other funds then held for the holders of ADSs in an unsegregated account. At that point, the Depositary will have no further obligations to 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 at such office during regular business hours but solely for the purpose of communicating with other holders in the interest 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 not prohibited by law. Limitations on Obligations and Liabilities The Deposit Agreement limits our obligations and the Depositarys obligations to you. Please note the following: We and the Depositary are obligated only to take the actions specifically stated in the Deposit Agreement without negligence or bad faith. The Depositary disclaims any liability for any failure to carry out voting instructions, for any manner in which a vote is cast or for the effect of any vote, provided it acts in good faith and in accordance with the terms of the Deposit Agreement. The Depositary disclaims any liability for any failure to determine the lawfulness or practicality of any action, for the content of any document forwarded to you on our behalf or for the accuracy of any translation of such a document, for the investment risks associated with investing in Shares, for the validity or worth of the Shares, for any tax consequences that result from the ownership of ADSs, for the credit-worthiness of any third party, for allowing any rights to lapse under the terms of the Deposit Agreement, 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 the Deposit Agreement. We and the Depositary disclaim any liability if we are prevented or forbidden from acting on account of any law or regulation, any provision of our Articles of Association, any provision of any securities on deposit 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, any discretion provided for the Deposit Agreement or in our Articles of Association or in any provisions of securities on deposit. 99

 We and the Depositary further disclaim any liability for any action or inaction in reliance on the advice or information received from legal counsel, accountants, any person presenting Shares for deposit, any holder of ADSs or authorized representatives thereof, or any other person believed by either of us in good faith 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 of the Deposit Agreement, made available to you. We and the Depositary may rely without any liability upon any written notice, request or other document believed 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 of the terms of the Deposit Agreement. Pre-Release Transactions The Depositary may, in certain circumstances, issue ADSs before receiving a deposit of Shares or release Shares before receiving ADSs for cancellation. These transactions are commonly referred to as pre-release transactions. The Deposit Agreement limits the aggregate size of pre-release transactions and imposes a number of conditions on such transactions. These transactions must be fully collateralized with a specified type of collateral and specified representations are required from brokers. The Depositary may retain the compensation received from the pre-release transactions. Taxes You will be responsible for the taxes and other governmental charges payable on the ADSs and the securities represented by the ADSs. We, the Depositary and the Custodian may deduct from any distribution the taxes and governmental charges payable by holders and may sell any and all property on deposit to pay the taxes and governmental charges payable by holders. You will be liable for any deficiency if the sale proceeds do not cover the taxes that are due. The Depositary may refuse to issue ADSs, to deliver, transfer, split and combine ADRs or to release securities on deposit until all taxes and charges are paid by the applicable holder. The Depositary and the Custodian may take reasonable administrative actions to obtain tax refunds and reduced tax withholding for any distributions on your behalf. However, you may be required to provide to the Depositary and to the Custodian proof of taxpayer status and residence and such other information as the Depositary and the Custodian may require to fulfill legal obligations. You are required to indemnify us, the Depositary and the Custodian for any claims 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 such conversion is practicable, and it will distribute the dollars in accordance with the terms of the Deposit Agreement. You may have to pay fees and expenses incurred in converting foreign currency, such as fees and expenses 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 or not obtainable at a reasonable cost or within a reasonable period, the Depositary may take the following actions in its discretion: Convert the foreign currency to the extent practicable and lawful and distribute the dollars to the holders for 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. 100

INFORMATION RELATING TO THE DEPOSITARY Citibank, N.A. (Citibank) has been appointed as Depositary pursuant to the Deposit Agreement. Citibank is an indirect wholly owned subsidiary of Citigroup Inc., a Delaware corporation. Citibank is a commercial bank that, along with its subsidiaries and affiliates, offers a wide range of banking and trust services to its customers throughout the United States and the world. Citibank was originally organized on June 16, 1812, and is now a national banking association organized under the National Bank Act of 1864 of the United States of America. Citibank is primarily regulated by the United 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 forth in Citigroups 2006 Annual Report on Form 10-K. The Annual Report is on file with the United States Securities and Exchange Commission. Citibanks Articles of Association and By-laws, each as currently in effect, together with Citigroups 2006 Annual Report on Form 10-K are available for inspection at the Depositary Receipt office of Citibank, 388 Greenwich Street, New York, New York 10013 and at the offices of the Trustee at Citibank, N.A., London Branch, 14th Floor, Citigroup Centre, Canada Square, Canary Wharf, London E14 5LB.

101

DESCRIPTION OF THE SHARES Set forth below is certain information relating to our share capital, including brief summaries of certain provisions 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 rights attached 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Issued Share Capital: 385,373,885 Ordinary Shares of Rs.10 each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Subscribed Share Capital: 385,373,885 Ordinary Shares of Rs.10 each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Calls in arrears . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Issued US$100 million 1% Convertible Notes due 2008:(1)(2) Aggregate Principal Amount Converted: US$99,940,000 Issued US$100 million Zero Coupon Convertible Notes due 2009:(2) Aggregate Principal Amount Converted: US$93,890,000 Issued US$300 million 1% Convertible Notes due 2011:(2) Aggregate Principal Amount Converted: Nil Issued 11,760 million Zero Coupon Convertible Notes due 2011:(2) Aggregate Principal Amount Converted: Nil After exercise of Notes(3) Issued Share Capital: 407,124,080 Ordinary Shares of Rs.10 each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Paid up Share Capital: 407,124,080 Ordinary Shares of Rs.10 each . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,500.0 3,853.7 3,853.7 0.1 3,853.6 0.5 3,854.1

4,071.2 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 an aggregate of 18,398,095 Ordinary Shares and US$93,890,000 aggregate principal amount of the Zero Coupon Convertible Notes due 2009 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 Coupon Convertible Notes due 2011 are convertible into Ordinary Shares at the initial conversion price of Rs.250.745, Rs.573.106, Rs. 780.40 and 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$1.00 and 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, the shareholders at a general meeting have no power to declare any dividend. Subject to certain conditions laid down 102

by Section 205 of the Companies Act, no dividend can be declared or paid by a company for any financial year except out of the profits of the company calculated in accordance with the provisions of the Companies Act or out 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 moneys provided by the central or state government for payment of dividend in pursuance of a guarantee given by that government. Under our Articles of Association, the shareholders at a general meeting may declare a lower, but not higher, dividend than that recommended by the Board of Directors. Dividends are generally declared as a percentage of the par value. The dividend recommended by the Board of Directors and approved by the shareholders at a general meeting is distributed and paid to shareholders in proportion to the paid-up value of their Shares as on the record date for which such dividend is payable. In addition, as is permitted by the Articles of 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 is specified as the record date or book closure date. No shareholder is entitled to a dividend while any lien in respect of unpaid calls on any of his Shares is outstanding. The Shares to be issued upon the conversion of the CARS will be fully paid-up when delivered as provided herein. Certain loan agreements entered into by us require us to obtain the consent of lenders before making dividend payments when sums due under those loan agreements 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 existing Shares in all respects including entitlement of the dividend declared, where the record date falls on or after the Conversion Date. Any dividend declared is required to be deposited in a separate bank account within five days from the date of the declaration of such dividend. Dividends must be paid within 30 days from the date of the declaration and any dividend which remains unpaid or unclaimed after that period must be transferred within seven days to a special unpaid dividend account held at a scheduled bank. Any money which remains unpaid or unclaimed for seven years from the date of such transfer must be transferred by us to the Investor Education and Protection Fund established by the Government pursuant to which no claim shall lie against us or the said Fund. Directors may 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 any year out of the profits of that year after we have transferred to our reserves, a percentage of our non-consolidated Indian GAAP profits for that year ranging between 2.5% to 10% depending on the rate of dividend proposed to be declared in that year. The Companies Act further provides that if the profit for a year is insufficient, the dividend for that year may be declared out of the non-consolidated Indian GAAP accumulated profits earned in previous years and transferred to reserves, subject to the following conditions: (i) the rate of dividend to be declared may not exceed the lesser of the average of the rates at which dividends were declared in the five years immediately preceding the year, or 10% of paid-up capital; (ii) the total amount to be drawn from the accumulated profits from previous years and transferred to the reserves, may not exceed an amount equivalent to one tenth of the paid-up capital and free reserves and the amount so drawn is first to be used to set off the losses incurred in the financial year before any dividends in respect of preference or equity shares; and (iii) the balance of 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 in certain circumstances that certain amounts standing to the credit of certain reserves or securities premium can be capitalized by the issue of fully paid bonus shares or by crediting shares not fully paid-up with the whole or part of any sum outstanding. Bonus shares must be issued pro rata to the amount of capital paid-up on existing shareholdings. 103

Any issue of bonus shares would be subject to the guidelines issued by SEBI in this regard. The relevant SEBI guidelines prescribe that no company shall, pending conversion of convertible securities, issue any shares by way of bonus unless similar benefit is extended to the holders of such convertible securities, through reservation of shares in proportion to such conversion. The bonus issue shall be made out of free reserves built out of the genuine profits or share premium collected in cash only. The bonus issue cannot be made unless the partly paid shares, if any existing, are made fully paid-up. Further, for the issuance of such bonus shares a company should not have defaulted in the payment of interest or principal in respect of fixed deposits and interest on existing debentures or principal on redemption of such debentures. The declaration of bonus shares in lieu of a dividend cannot be made. Further a company should have sufficient reason to believe that it has not defaulted in respect 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 of directors. 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 on such terms and with such rights as we, by action of shareholders in a general meeting, determine. Such new shares shall be offered to existing shareholders listed on the members register on the record date in proportion to the amount paid-up on those shares at that date. The offer shall be made by notice specifying the number of shares offered and the date (being not less than 15 days from the date of the offer) after which the offer, if not accepted, will be deemed to have been declined. After such date the Board of Directors may dispose of the shares offered 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 him in favour of any other person, provided that the person in whose favour such shares have been renounced is approved 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 those persons include existing shareholders either, if a special resolution to that effect is passed by the shareholders of the company in a general meeting or, where only a simple majority of shareholders present and voting have passed the resolution, if the Governments permission has been given. The issuance of Shares upon conversion of the CARS has been duly approved by a special resolution of our 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 any of our securities, or individually issued, entitling the holder to subscribe for our shares or upon the conversion of convertible 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 of shareholders. We can also alter our share capital by way of a reduction of capital or by undertaking a buyback of shares under the prescribed SEBI guidelines. Our Articles provide that we may in a general meeting, from time to time increase our capital by the creation of new shares and may consolidate or sub-divide its share capital, convert all or any of our fully paid-up Shares into stock and reconvert that stock into fully paid-up Shares or cancel Shares which have not been taken up 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 with the sanction of a special resolution, passed at a separate meeting of the holders of the shares of that class. 104

Preference Shares Preference share capital is that part of the paid-up capital of the company which fulfils both the requirements below: that with respect to dividend, it carries or will carry a preferential right to be paid a fixed amount or an amount 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 to be repaid the amount of the capital paid-up or deemed to have been paid-up, subject to the provisions of the Companies Act. Preference shares do not confer any further rights to participate in our profits or assets. Holders of preference shares are not entitled to vote at general meetings of a company except where the dividend due on such capital has remained unpaid: in the case of cumulative preference shares, in respect of an aggregate period of not less than two years preceding 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 or in respect of an aggregate period of not less than three years comprised in the six years ending with the expiry 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 be redeemed except out of our profits which would otherwise be available for dividends or out of the proceeds of a fresh issue of shares made for the purposes of the redemption; (ii) no such shares shall be redeemed unless they are fully paid; (iii) the premium, if any, payable on redemption shall have been provided for out of our profits or out of our share premium account, before the shares are redeemed; (iv) where any such shares are redeemed otherwise than out of the proceeds of a fresh issue, there shall, out of profits which would otherwise have been available for dividends, be transferred to a reserve fund, to be called the Capital Redemption Reserve Account, a sum equal to the nominal amount of the shares redeemed; and (v) the provisions of the Companies Act relating to the reduction of the share capital of a company shall apply as if such reserve account were paid-up share capital of such company. Preference shares must be redeemable before the expiry of a period of 20 years from the date of their issue. General Meetings of Shareholders We must hold our annual general meeting each year within 15 months of the previous annual general meeting, and in any event not later than six months after the end of each accounting year, unless extended by the Registrar of Companies at our request for any special reason. The Board of Directors may convene an extraordinary general meeting of shareholders when necessary or at the request of a shareholder or shareholders holding in the aggregate not less than 10% of our issued and paid-up capital. Written notices convening a meeting setting out the date, place and agenda of the meeting must be given to members at least 21 days prior to the date of the proposed meeting. A general meeting may be called after giving shorter notice if consent is received from all shareholders entitled to vote, in the case of an annual general meeting, and from shareholders holding not less than 95% of our paid-up capital in the case of any other general meeting. Currently, we give written notices to all members and, in addition, give public notice of general meetings of shareholders in a daily newspaper of general circulation in Mumbai. General meetings are generally held 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 the objects clause of the memorandum, buy back of shares under the Companies Act, giving loans or extending guarantees in excess of limits prescribed under the Companies Act, and guidelines issued thereunder, is required to obtain a resolution passed by means of a postal ballot instead of transacting the business in a general meeting 105

of the company. A notice to all the shareholders shall be sent along with a draft resolution explaining the reasons therefor and requesting them to send their assent or dissent in writing on a postal ballot within a period of 30 days 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 in person has one vote. Upon a poll the voting rights of each shareholder entitled to vote and present in person or by proxy is in the same proportion as the capital paid-up on each share held by such holder bears to the total paid-up capital of the company. Voting is by show of hands, unless a poll is ordered by the Chairman of the meeting or demanded by a shareholder or shareholders holding at least 10% of the voting rights in respect of the resolution or by those holding paid-up capital of at least Rs. 50,000 (i.e., 5000 shares of Rs.10 each). The Chairman of the meeting has a casting vote. Holders of ADSs may exercise voting rights with respect to the ordinary shares represented by ADSs only in accordance with the provisions of our Deposit Agreement and Indian law. See Description of the American Depositary Shares Voting Rights. Ordinary resolutions may be passed by simple majority of those present and voting. Special resolutions require the vote of three fourths of the members present and voting. Special resolutions require that the votes cast in favour of the resolution by those present and voting must be at least three times the votes cast against the resolution. The Companies Act provides that to amend the Articles of Association, a special resolution is required 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 the business of any other company and in any case, where shareholding of public financial institutions and banks exceeds 25%, appointment of statutory auditors and dissolution of the company require a special resolution. Our Articles 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. The instrument appointing a proxy is required to be lodged with us at least 48 hours before the time of the meeting. A shareholder may, by a single power of attorney, grant a general power of representation regarding several general meetings of shareholders. Any of our shareholders may appoint a proxy. A proxy shall not vote except on a poll and does not have a right to speak at meetings. A corporate shareholder is also entitled to nominate a representative to attend and vote on its behalf at general meetings, who shall not be deemed a proxy. Such an authorized 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 or otherwise subject to certain conditions prescribed under applicable law. See Issue of Shares with Differential Rights. Convertible Securities/Warrants We may issue from time to time debt instruments that are partly and fully convertible into Shares and/or warrants 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 approval of our shareholders by way of a special resolution and with prior intimation to the Registrar of Companies at some other place in the same city. The register and index of beneficial owners maintained by a depository under the Depositories Act, 1996 is deemed to be an index of members and register and index of debenture holders. We 106

recognize as shareholders only those persons who appear on its register of shareholders and we cannot recognize any person holding any Share or part of it upon any trust, express, implied or constructive, except as permitted by law. In the case of shares held in physical form, we through our Registrar and Transfer Agent, register transfers of shares on the register of shareholders upon lodgement of the share transfer form duly complete in all respects accompanied by a share certificate or if there is no certificate, the letter of allotment in respect of shares to be transferred 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 the beneficial owner of the shares. In turn, we enter the name of the depository in its records as the registered owner of the shares. The beneficial owner is entitled to all the rights and benefits as well as the liabilities with respect to the shares that are held by the depository. Transfer of beneficial ownership through a depository is exempt from any stamp duty but each depository participant may have its own depository charges. A transfer of shares by way of 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 previous notice by advertisement in some newspaper circulating in the district where our registered office is situated, close the register for periods not exceeding 45 days in any one year or 30 days at any one time. In order to determine the 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 our outstanding Shares are listed, we may, upon at least 15 days advance notice (or 21 days advance notice in the event our shares are traded on the stock exchanges in physical form) to such stock exchanges, set a record date and/or close the register of shareholders in order to ascertain the identity of shareholders. The trading of Shares and 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 other financial information, a corporate governance section and managements discussion and analysis and are made available for inspection at our registered office during normal working hours for 21 days prior to the annual general meeting. Under the Companies Act, we must file the Annual Report with the Registrar of Companies within seven months 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 sent to the BSE and NSE. We must also publish our financial results in at least one English language daily newspaper circulating in the whole or substantially the whole of India and also in a newspaper published in the language of the region where our registered office is situated. We file certain information on-line, including our Annual Report, half yearly financial statements, report on corporate governance and the shareholding pattern statement and such other statements, information and reports as may be specified by the SEBI from time to time, in accordance with the requirements of the Listing Agreement. Transfer of Shares Shares held through depositories are transferred in the form of book entries or in electronic form in accordance with the regulations laid down by the SEBI. These regulations provide the regime for the functioning of the depositories and the participants and set out the manner in which the records are to be kept and maintained and the safeguards to be followed in this system. Transfers of beneficial ownerships of shares held through a depository are exempt from stamp duty. We have entered into an agreement for such depository services with National Securities Depository Limited and the Central Depository Services India Limited. 107

The SEBI requires that for trading and settlement purposes, our Shares be in book-entry form for all investors, except for transactions that are not made on a stock exchange and transactions that are not required to be reported to the stock exchange. The requirement to hold shares in book-entry form will apply to Holders when they acquire Shares upon conversion. In order to trade in the our Shares in the Indian market, the converting Holder will be required to comply with the procedures above. Our Shares are freely transferable, subject only to the provisions of the Companies Act under which, if a transfer of Shares contravenes the SEBI provisions or the regulations issued under it or the SICA, or any other similar law, the Indian Company Law Board may, on an application made by the company, a participant, a depository incorporated in India, an investor or the SEBI, direct a rectification of the register of records. If a company without sufficient cause refuses to register a transfer of shares within two months from the date of which the instrument of transfer is delivered to the company, the transferee may appeal to the Indian Company Law Board seeking to register the transfer of equity shares. The Company Law Board may, in its discretion, issue an interim order suspending the voting rights attached to the relevant equity shares before completing its investigation of the alleged contravention. Under the Companies (Second Amendment) Act, 2002, the Indian Company Law Board will be replaced with the National Company Law Tribunal. Pursuant to the Listing Agreement, in the event the company has not effected the transfer of Shares within one month or where the company has failed to communicate to the transferee any valid objection to the transfer within the stipulated time period of one month, the company is required to compensate the aggrieved party for the opportunity loss caused during the period of delay. The Companies Act provides that the shares or debentures of the public listed company shall be freely transferable. Our Articles of Association provide for certain restrictions on the transfer of shares, including granting power to the board of directors in certain circumstances, to refuse to register or acknowledge transfer of shares or other securities issued by us. However, to the extent that the provisions of the Articles 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 by an approval of at least 75% of our shareholders voting on the matter in accordance with the Companies Act and is 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 by means of a loan, guarantee, the provision of security or otherwise, any financial assistance for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for any shares in the company or its holding company. However, pursuant to certain amendments to the Companies Act, a company has been empowered to purchase its own shares or other specified securities out of its free reserves, or the securities premium account or the proceeds of any shares or other specified securities (other than the kind of shares 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 buy back; 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 the total paid-up equity capital and free reserves of the company and provided that such buy-back has been 108

authorized by the board of directors of the company. Further, a company buying back its securities is not permitted to buyback any securities for a period of one year from the buyback or to issue new securities for six months from the buyback date. The aforesaid restriction relating to the one year period does not apply to a buyback authorised by a special resolution of the shareholders in general meeting. Every buy back has to be completed within a period of one year from the date of passing of the special resolution or resolution of the Board as the case may be. A company buying back its securities is required to extinguish and physically destroy the securities so bought 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 any subsidiary company including its own subsidiary companies or through any investment company (other than a purchase of shares in accordance with a scheme for the purchase of shares by trustees of or for shares to be held by or for the benefit of employees of the company) or if the company is defaulting on the repayment of deposit or interest, redemption of debentures or preference shares or payment of dividend to a shareholder or repayment of any term loan or interest payable thereon to any financial institution or bank, if the company is listed and wishes to buy back its shares or specified securities for the purpose of delisting its shares or specified securities or in the event 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 entitled by their terms of issue to preferential repayment over the Shares, in the event of winding up of the Company, the holders of the Shares are entitled to be repaid the amounts of capital paid-up or credited as paid-up on such Shares. All surplus assets after payments due to workmen, statutory creditors, and secured and unsecured creditors belong to the holders of the equity shares in proportion to the amount paid up or credited as paid-up on such 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 Indian companies that are not holders of record to declare to the company details of the holder of record and holders of record to declare details of the beneficial owner. While it is unclear whether these provisions apply to holders of an Indian companys ADSs, investors who exchange ADSs for equity shares are subject to this provision. Failure to comply with these provisions would not affect the obligations of a company to register a transfer of equity shares or to pay any dividends to the registered holder of any equity shares in respect of which this declaration has not been made, but any person who fails to make the required declaration may be liable for a fine of up to Rs.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 as to dividend, voting or otherwise (Differential Shares). Further, the issue by a public limited company of Differential Shares would be subject to compliance with the provisions of the Companies (Issue of Share Capital with Differential Voting Rights) Rules, 2001 (DVR Rules). The DVR Rules prescribe various conditions that would be required to be satisfied by a public limited company in order for such company to be permitted to issue Differential shares. Such conditions include the following: the company has distributable profits for 3 financial years preceding the year in which Differential Shares are sought to be issued; the company has not failed to repay its deposits or interest thereon on the due date or redeem its debentures 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 Exchange Regulation 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 by the Foreign Exchange Management Act 1999 (the FEMA), and the rules, regulations and notifications made under FEMA. The transfer and issue of securities by a person resident, including but not limited to corporates established and incorporated, outside India is also governed by the Foreign Exchange Management (Transfer or Issue of Securities by a Person Resident Outside India) Regulation, 2000 (the FEM Securities Regulations), notified by the 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 are amended from time to time. The FEM Securities Regulations provide that an Indian entity may issue securities to a person resident outside India or record in its books any transfer of security from or to such person only in the manner set forth in the 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 Promotion Board (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-resident investor. FIPB approval is required for investment in certain notified sectors. In addition, the following investments 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 technology transfer or trademark agreement in India in the same field as that in which the company in which the investment is proposed to be made. However, no prior approval is required if: (a) the investor is a venture capital fund registered with SEBI, or (b) in the existing joint venture, investment by either of the parties is less 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 small scale 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 an individual of Indian nationality or origin residing outside India (a Non-Resident Indian) and corporates established and incorporated outside India) which are not under automatic route under the existing Indian 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 to non-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 Regulatory and Development Authority.

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A person residing outside India (other than a citizen of Pakistan and Bangladesh) or any entity incorporated outside India (other than an entity incorporated in Pakistan or Bangladesh) has general permission to purchase shares, convertible debentures or preference shares of an Indian company, subject to certain terms and conditions. Currently, subject to certain exceptions, Foreign Direct Investment and investment by individuals of Indian nationality or origin residing outside India, or Non-Resident Indians, in Indian companies does not require the prior approval of the FIPB or the RBI. The Government has indicated that in all cases where Foreign Direct Investment is allowed on an automatic basis without FIPB approval the RBI would continue to be the primary agency for the purposes of monitoring and regulating foreign investment. In cases where FIPB approval is obtained, no further approval of the RBI is required. In both of the above cases, the prescribed applicable norms with respect to determining the price at which shares may be issued by an Indian company to a non-resident foreign investment and exchange controls investor would need to be complied with and a declaration in the prescribed form, detailing the foreign investment, is required to be filed with the RBI once the foreign investment is made in the Indian company. The foregoing description applies only to an issuance of shares by, and not to a transfer of shares of, Indian companies. The Government of India has set up the Foreign Investment Implementation Authority (the FIIA) in the Department of Industrial Policy and Promotion. The FIIA has been mandated to (i) translate foreign direct investment approvals into implementation, (ii) provide proactive one-stop after-care service to foreign investors by helping them obtain necessary approvals, (iii) deal with operational problems, and (iv) meet with various Government of India agencies to find solutions to foreign investment problems, and maximize opportunities through a cooperative approach. Pricing SEBI is the regulatory body that regulates the business issuing Indian securities markets and has framed SEBI (Disclosure and Investor Protection) Guidelines, 2000, as amended (the SEBI Guidelines), to be complied with by Indian companies who intend to issue and list their securities in the Indian stock market. The SEBI Guidelines are applicable to all public issues by listed and unlisted companies, all offers for sale, bonus issues and rights issues by listed companies whose equity share capital is listed, except in case of rights issues where 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 public offer basis, price the securities in consultation with the lead manager to the issue and in all other cases as provided in Regulation 5 of the SEBI Guidelines. Regulation 5 of the SEBI Guidelines states that shares issued to persons resident outside India shall not be less than the price worked out in accordance with the SEBI Guidelines as applicable, where the issuing company is listed on any recognised stock exchange in India, and in all other cases not less than the fair valuation of the shares arrived at by a chartered accountant. Every Indian company issuing shares or convertible debentures in accordance with the FEM Securities Regulations must submit a report to the RBI within 30 days of receipt of the consideration and another report within 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 some additional requirements in relation to pricing of foreign currency convertible bonds. See Issue of Foreign Currency Convertible Bonds and Depositary Receipts 111

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, nominee companies and incorporated/institutional portfolio managers, to make portfolio investments in all securities of listed and unlisted companies in India. Investments by registered FIIs or Non-Resident Indians made through a stock exchange are known as Portfolio Investments. Foreign investors wishing to invest and trade in Indian securities in India under these guidelines are required to register with the SEBI and obtain a general permission from the RBI under the FEMA. However, since the SEBI provides a single window clearance, a single application must be made to the SEBI. Foreign investors are not necessarily required to register with the SEBI as FIIs and may invest in securities of Indian companies pursuant to the FDI route discussed above. However, under the FDI route, while shares of Indian listed companies may be sold on recognised stock exchanges, shares of listed Indian companies cannot be purchased on stock exchanges. FIIs that are registered with the SEBI must comply with the provisions of the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations 1995, or the Foreign Institutional Investor Regulations. A registered FII may, subject to the ownership restrictions discussed below, freely buy and sell securities issued by any Indian company, realize capital gains on investments made through the initial amount invested in India, subscribe to or renounce rights offerings for shares, appoint a domestic custodian for custody of investments made and repatriate the capital, capital gains, dividends, income received by way of interest and any compensation received towards sale or renunciation of rights offerings for shares. An FII may not hold more than 10% of the total issued capital of a company in its own name; a corporate/individual sub-account of the FII may not hold more than 5% of the total issued capital of a company, and a broad-based sub-account may not hold more than 10% of the total issued capital of a company. The total holding of all FIIs in a company is subject to a cap of 24% of the company. The 24% limit may be increased to the sectoral cap/statutory limit as applicable to the Indian company concerned, by the Indian company passing a resolution by its Board of Directors followed by passing of a special resolution to that effect by its general body. Since the sectoral cap specified for the Company is 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 to purchase 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 are issued to Indian residents, or a private placement, where the price of the shares to be issued is not less than the price according to the terms 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. The CARS and the Shares are subject to tax under Section 115AC. There is uncertainty under Indian law as to the tax regime applicable to the FIIs that hold and trade in foreign currency denominated bonds or global depositary receipts. 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 of Indian companies on a basis not generally available to other foreign investors. Under the Portfolio Investment Scheme, NRIs can purchase up to 5% of the paid up value of the shares issued by a company, subject to the condition that the aggregate paid up value of shares purchased by all NRIs does not exceed 10% of the paid up capital of the company. In addition to Portfolio Investments in Indian companies, Non-Resident Indians may also make foreign direct investments in Indian companies pursuant to the FDI route discussed above. 112

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 RBI approval, unless the sale was made on a stock exchange at the market price. The Government has granted general permission to persons residing outside India to transfer shares and convertible debentures held by them to an Indian resident, subject to compliance with certain terms and conditions and reporting requirements. A resident who wishes to purchase shares from a non-resident must, pursuant to the relevant notice requirements, file a declaration with an authorised dealer in the prescribed Form FC-TRS, together with the relevant documents and file an acknowledgment thereof with the Indian company to effect transfer of the shares to his name. However, in such cases, the person to whom the shares are being transferred is required to obtain the prior permission of the Central Government of India to acquire the shares if he has an existing venture as on January 12, 2005 (with his holding over 3% shares) or tie-up in India through investment in shares or debentures or a technical collaboration or a trade mark agreement or investment by whatever name called, in the same field to that in which the Indian company whose shares are being transferred is engaged. Further, a non-resident may transfer any security held by him 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 prior approval of the Government or RBI, provided that: (i) the activities of the investee company are under the automatic route pursuant to the FDI Policy (ii) the non-resident shareholding complies with sector limits under the 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 in relation to block deals. The Block Deal Circular has defined a block deal to mean a trade with a minimum quantity of 500,000 shares or a minimum value of Rs.50 million executed through a single transaction on a separate specified window of the stock exchange. The Block Deal Circular has specified the following conditions for a block deal: (i) the specified trading window may be kept open for a limited period of 35 minutes from the beginning of 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 market price/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 same day, 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 0.5 percent of the number of equity shares of the company listed on the stock exchange, certain disclosure requirements 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 (trough Depositary Receipt Mechanism) Scheme, 1993 (the Depositary Receipt Scheme) and the External Commercial Borrowings (ECB) Guidelines, has allowed Indian corporates to issue FCCBs. The notification relating to FCCBs has been amended from time to time by the MOF, and certain relaxations in the guidelines have also been notified 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 person resident outside India subject to the approval of the RBI in certain cases. Any Indian company issuing such bonds 113

must comply with certain reporting requirements prescribed by the RBI. The FEMA Foreign Securities Regulations provide the following: An Indian corporate can raise funds up to US$500 million under the automatic route without the approval of the RBI, and above any amount of US$500 million with the approval of the RBI. These limits are also available to FCCBs under the ECB Guidelines, and Indian companies may issue FCCBs subject to the following conditions: FCCBs up to US$20 million are required to have a minimum average maturity period of three years and FCCBs above US$20 million and up to US$450 million are required to have a minimum average maturity of five years. As per recent amendments to the ECB Guidelines, Indian corporates have been permitted to issue FCCBs for an additional amount of US$250 million with an average maturity of more than 10 years with the prior approval of the RBI, over and above the aforesaid limit of US$500 million under the automatic route, during a financial year. However, prepayment and call/put options would not be permissible in respect of FCCBs issued in respect of the additional US$250 million, up to a period of 10 years; 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 compliance with the minimum average maturity period, as applicable; the all-in cost ceiling for FCCBs having a minimum average maturity period of three to five years should not exceed six month LIBOR plus 1.5%, and in the case of FCCBs having a minimum average maturity 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, including small 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 parks and (vii) urban infrastructure (water supply, sanitation and sewage projects). Utilisation of the FCCB proceeds is also permitted in the first stage acquisition of shares in the divestment process and also in the mandatory second stage offer to the public under the Government of Indias divestment programme of PSU shares, or for overseas direct investment in joint ventures/wholly-owned subsidiaries, expansion of existing joint ventures or wholly-owned subsidiary operations and overseas mergers and acquisitions. For any use of proceeds, 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 or for repayment of existing rupee loans; FCCB proceeds may not be used for on-lending and investment in capital markets and real estate, or acquiring 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 and expenses of the arranger (provided that such amounts do not exceed the ceiling as may be approved by the MOF) 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 External Commercial Borrowings, which is also applicable to FCCBs (the Borrowing Policy), permitting Indian corporations to raise funds up to US$450 million under the automatic approval route. Borrowings in excess of US$450 million require the approval of the RBI. In terms of the Borrowing Policy, FCCBs up to US$20 million must have a minimum average maturity period of three years and FCCBs above US$20 114

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 should not exceed 200 basis points over six month LIBOR and in the case of FCCBs having a minimum average maturity 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 is not permitted; the maximum amount of FCCBs that may be raised by an eligible borrower under the automatic route is US$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 instructions is that of the concerned borrower and any contravention of the FCCB guidelines will be viewed seriously and may result in penal action. The Ministry of Finance, Government of India has by a notification dated August 31, 2005 and an amendment thereto dated September 14, 2005, amended the Depositary Receipt Scheme and has set out the following additional requirements: an Indian company which is not eligible to raise funds from the Indian capital market including a company which has been restrained from accessing the securities market by the SEBI will not be eligible to issue FCCBs; erstwhile overseas corporate bodies and other entities which are prohibited to buy, sell or deal in securities by 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 and low of the closing price of the related shares quoted on the stock exchange during the six months preceding the relevant date; and (b) the average of the weekly high and low of the closing price of the related shares quoted on the stock exchange during the two weeks preceding the relevant date. For the purpose of computation of the price, the relevant date is the date thirty days prior to the date on which the meeting 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 distributed directly or indirectly in India or to residents of India and the CARS are not being offered or sold and may not be 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 of India and that it is not purchasing for, or for the account or benefit of, any such person, and understands that the CARS will bear a legend to the effect that the securities evidenced thereby may not be offered, sold, pledged or otherwise transferred to any person located in India, to any resident of India or to, or for the account of, such persons, 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 certain prescribed conditions, without the prior approval of the RBI. This offering is being made in accordance with the revised policy. This does not represent any commitment of any kind on the part of the Government of India to render any assistance in any matters of priorities or licenses for the supply of raw materials, machinery, transport facilities or any other governmental assistance, including the provision of foreign exchange. We are required to make 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 are permitted 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 may require 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) are to 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 days from 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 of Companies 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 the CARS, the QSs, the ADSs and the Shares issuable on conversion of the CARS. The summary is based on the taxation law and practice in force at the time of this Offering Memorandum and is subject to change. Further, it only 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 Offering Memorandum and who hold such CARS,QSs, ADSs or Shares (upon conversion) as capital assets, and does not address 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 way of interest, dividends and capital gains is earned. EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT ITS TAX ADVISERS ABOUT THE PARTICULAR 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 Income Tax Act 1961 and The Issue of Foreign Currency Convertible Bonds and Ordinary Shares (through Depository Receipt 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 the Section 115AC Regime, and non-resident Investors of the CARS will therefore have the benefit of tax concessions 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 applicable rate of surcharge on income tax (surcharge is calculated on income tax and the rate is 10% for individuals or associations of persons whose total income exceeds Rs.1,000,000 and 2.5% for a company including a body corporate whose income exceeds Rs.10,000,000 for the current financial year and could vary from year to year and further an education cess on income tax and surcharge at the applicable rates) on interest and long term capital gains on the CARS. The premium on redemption would also be taxed at the rate of 10% plus surcharge and education cess at the applicable rates if the CARS are held for a period exceeding 36 months and in the case of CARS held for a period less than 36 months, would be subject to tax at the rates applicable to the holders 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 of the acquisition, ownership and sale of the CARS, QSs, ADSs or Shares by non-resident investors. Potential investors should, therefore, consult their own tax advisers on the tax consequences of such acquisition, ownership and 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 depositary bank (the Depositary) as applicable and, in particular, the application of the provisions of the Income Tax Act and 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-resident holders of the CARS will be subject to withholding tax at the rate of 10% plus surcharge and education cess at the applicable rates (or at any more favourable rate available under tax treaties entered into by India with the country of residence of the relevant Depositary). The Income Tax Act requires such tax to be withheld at the source. Where the tax is required to be deducted or withheld, we will gross up the taxable amount and will be required 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., it is held for more than 36 months, subject to any more favorable rate under the tax treaties entered into between 117

India and the country of residence of the noteholder. If it is held for less than 36 months, the premium will be taxed at the applicable rate (plus surcharge and education cess at the applicable rates). We will be under an obligation 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 Depositary Facility under the Deposit Agreement or when the CARS are converted into Shares, dividends paid to such non-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 amount distributed 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 the purposes 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/or acquisition of shares in exchange for QSs or ADSs does not constitute a taxable event for Indian income tax purposes. 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 outside India is free from any liability for income tax in India on capital gains arising therefrom. It is unclear whether capital gains derived from the sale of Rights by a non-resident investor to another non-resident investor outside India will be subject to tax liability in India. This would depend on the view taken by Indian tax authorities on the 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 outside India to a non-resident or Indian resident investor) will be liable for income tax under the provisions of the Indian Income Tax Act. Any gain realised on the sale of the Shares on the Stock Exchange held for more than 12 months (long-term gain), will not be subject to Indian capital gains tax if the Securities Transaction Tax, or STT, has been paid on the 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 is paid to the Government. Any gain realised on the sale of Shares held for more than 12 months on which no STT has been paid, will be 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, the cost of acquisition of Shares received in exchange for ADSs will be determined on the basis of the prevailing price of the Shares on the BSE or NSE as on the date on which the relevant Depository gives notice to its Custodian for the delivery of such Shares upon redemption of the ADSs, while the cost of acquisition of shares directly converted from the CARS will be determined on the basis of the price prevailing on the BSE or the NSE on the date of conversion into equity shares. A non-resident holders holding period (for purpose of determining the applicable Indian capital gains tax rate) in respect of Shares commences on the date of the advice of 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) for 12 months or less (short-term capital gain) on which STT is paid in the manner and rates set out above, is subject to tax at the rate of 10% plus surcharge and education cess at the applicable rates. In the event that no STT is paid, short-term gain is subject to tax at variable rates with the maximum rate of 40% plus surcharge and education 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. 118

Under the Income Tax Act, capital gains can be of two types, long-term capital gain or short-term capital gain. Normally, gain arising on sale of capital asset held for more than 36 months is considered as long-term capital gain and gain arising on sale of capital asset held for less than 36 months is considered as short-term capital gain. Tax on long-term and short-term capital gains, if payable, shall be paid by the transferor in accordance 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 of Shares in India. In general terms, losses arising from a transfer of a capital asset in India can only be set off against capital gains. Long-term capital loss can be set off only against a long-term capital gain. To the extent that the losses are not absorbed in the year of transfer, they may be carried forward for a period of eight assessment years immediately succeeding the assessment year for which the loss was first determined and may be set off against the capital gains, assessable for such subsequent assessment years. In order to set off capital losses as above, the non-resident investor would be required to file appropriate and timely tax returns in India. If the investors covered by STT regime, the loss arising from transfer of such long term capital asset may not be available for setoff against any capital gains. Tax Treaties The provision of the Agreement for Avoidance of Double Taxation entered into by the Government of India with the country of residence of the non-resident investor will be applicable to the extent they are more beneficial to the non-resident investor. If any Shares are held by a non-resident investor following withdrawal thereof from the depositary facility under the Deposit Agreements, a double taxation treaty, if any, entered into by India with the country of residence of such non-resident investor will be applicable to taxation with respect to any capital gain arising from transfer 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 provisions of the Agreement for Avoidance of Double Taxation entered into by the Government of India with the country of residence 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 liability to Indian stamp duty. However, the transfer of ordinary shares in physical form would be subject to Indian stamp duty at the rate of 0.25% of the market value of the ordinary shares on the trade date, and such stamp duty customarily is borne by the transferee, that is, the purchaser. In order to register a transfer of Shares in physical form, it is necessary to present a stamped deed of transfer. An acquisition of shares in physical form from the Depositary in exchange for ADSs representing such shares will not render an investor liable to Indian stamp duty, but we will be required to pay stamp duty at the applicable rate on the share certificate. However, since our Shares are compulsorily deliverable in dematerialized form (except for trades of up to 500 Shares, which may be delivered in physical form) there would be no stamp duty payable in India on transfer of these Shares in dematerialised 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 ADSs or the underlying shares. Service Tax Brokerage or commissions paid to stockbrokers in connection with the sale or purchase of shares listed on a recognised 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. 119

PLAN OF DISTRIBUTION Citigroup Global Markets Limited and J.P. Morgan Securities Ltd., the initial purchasers, are acting as the joint bookrunners of the offering. Subject to the terms and conditions stated in the purchase agreement dated June 21, 2007 (the Purchase Agreement), the initial purchasers have agreed to purchase, and we have agreed to sell to the initial purchasers, the principal amount of the CARS set forth opposite the initial purchaers name below. We have also granted to the initial purchasers an option to purchase up to US$40,000,000 additional aggregate principal amount of CARS, solely to cover over-allotments. This option has been exercised in full.
Initial Offering Amount Issued Pursuant to Over-allotment Option

Initial Purchaser

Total

Citigroup Global Markets Limited . . . . . . . . . . . . . . . . . . . . . . $300,000,000 J.P. Morgan Securities Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $150,000,000 $450,000,000

$26,668,000 $13,332,000 $40,000,000

$326,668,000 $163,332,000 $490,000,000

The Purchase Agreement provides that the obligation of the initial purchasers to purchase the CARS is subject to approval of legal matters by counsel and to other conditions. The initial purchasers must purchase all the 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 forth on the cover page of this Offering Memorandum outside the United States in reliance on Regulation S. The price at 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 and will not be registered under the Securities Act or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S) except in transactions exempt from the registration requirements of the Securities Act. In addition, hedging transactions involving the CARS or the QSs, Shares or ADSs deliverable upon conversion of the CARS may not be conducted 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 as set forth in Transfer Restrictions on the CARS, it will not offer or sell the CARS or the QSs, Shares or ADSs 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 the commencement 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 distribution compliance 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 not participating in this offering may violate the registration requirements of the Securities Act if that offer or sale is made 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 days from the Closing Date, we will not, without the prior written consent of the initial purchasers, issue or offer, sell or contract to sell any Shares or any securities convertible, exchangeable or exercisable for Shares (including any warrants), except for the issuance of Shares upon conversion of outstanding convertible securities and conversion of the CARS. The initial purchasers in their sole discretion may release any of the securities subject to this lock-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 be communicated an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act of 2000 (the FSMA)) received by it in connection with 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 will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the CARS or the QSs, Shares or ADSs deliverable or delivered upon conversion of the CARS, from or otherwise 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, any CARS 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 and any rules made under that Ordinance; or (b) in other circumstances which do not result in the document being a prospectus as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance; and (ii) it has not issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the CARS or QSs, Shares or ADSs to be issued upon conversion of the CARS, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to CARS or QSs, Shares or ADSs to be issued upon conversion of the CARS which are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors as defined in the Securities and Futures Ordinance and 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 and will not be registered under the Securities and Exchange Law of Japan (the Securities and Exchange Law), and it has not, directly or indirectly, offered or sold and will not, directly or indirectly, offer or sell any CARS or QSs, Shares or ADSs to be issued upon conversion of the CARS in Japan or to, or for the 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 or re-sale, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange 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 of Companies in India and that the CARS and the QSs, Shares or ADSs to be issued upon conversion of the CARS will not be offered in India and that it has not offered or sold and will not offer or sell, any CARS or QSs, Shares or ADSs to be issued upon conversion of the CARS, nor has it circulated or distributed nor will it circulate or distribute this Offering Memorandum or any other offering document or material relating to CARS or QSs, Shares or ADSs to be issued upon conversion of the CARS, directly or 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 or ADSs deliverable upon conversion of the CARS to the public in France. In addition, each of us and each initial purchaser has represented, warranted and agreed that it has not distributed or caused to be distributed and will not distribute or cause to be distributed to the public in France, this Offering Memorandum or any other offering material relating to the CARS or the QSs, Shares or ADSs to be issued upon conversion of the CARS and such offers, sales and distributions have been and will be made in France only to (i) persons providing investment services relating to portfolio management for the account of third parties and/or (ii) qualified investors (investisseurs qualifis), as defined in, and in accordance with, Articles L.411-1, L.411-2 and D.411-1 to D.411-3 of the French Code montaire et financier; 121

 this Offering Memorandum has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, it has represented, warranted and agreed that it has not offered or sold any CARS or QSs, Shares or ADSs to be issued upon conversion of the CARS or caused the CARS or QSs, Shares or ADSs to be issued upon conversion of the CARS to be made the subject of an invitation for subscription or purchase nor will it offer or sell the CARS or QSs, Shares or ADSs to be issued upon conversion of the CARS or cause the CARS or QSs, Shares or ADS to be issued upon conversion of the CARS to be made the subject of an invitation for subscription or purchase, nor has it circulated or distributed nor will it circulate or distribute this Offering Memorandum or any other document or material in 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 in Singapore 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 person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275, of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the 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 sole business of which is to hold investments and the entire share capital of which is owned by one or more 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 and each 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 and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or 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 person defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights and interest in that trust are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the conditions specified in 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 Prospectus Directive (each, a Relevant Member State), with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the Relevant Implementation Date), it has not made and will not make an offer of the CARS or the QSs, Shares or ADSs to be issued upon conversion of the CARS which are the subject of the offering contemplated by this Offering Memorandum to the public in that Relevant Member State other than (i) to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; (ii) to any legal entity which has two or more of (1) an average 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 or consodilated accounts; (iii) to fewer than 100 natural or legal persons (other than qualified investors as defined 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 122

such offer of CARS or QSs, Shares or ADSs to be issued upon conversion of the CARS shall require the Company or any of the initial purchasers to publish a prospectus pursuant to Article 3 of the Prospectus 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 or QSs, Shares or ADSs to be issued upon conversion of the CARS in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the CARS and the QSs, Shares or ADS to be issued upon conversion of the CARS to be offered so as to enable an investor to decide to purchase or subscribe the CARS, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State and the expression Prospectus Directive means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State. Although approval in-principle has been received for the listing of the CARS on the SGX-ST, no assurance can be given that the CARS will be listed on the SGX-ST or, if they are, that the CARS will continue to be listed for so long as they are outstanding. In addition, we cannot assure you that the prices at which the CARS will sell in the market after this offering will not be lower than the initial offering price or that an active trading market for the CARS will develop and continue after this offering. See Risk Factors 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. The initial purchasers have advised us that they currently intend to make a market in the CARS. However, they are not obligated to do so and may discontinue any market-making activities with respect to the CARS at any time without notice. In addition, market-making activity will be subject to the limits imposed by the Securities Act and the Exchange Act and may be limited during the pendency of any shelf registration statement. Accordingly, we cannot assure you as to the liquidity of or the trading market for the CARS. In connection with this offering, each initial purchaser (or its affiliates) may, for its own account, enter into asset swaps, credit derivatives or other derivative transactions relating to the CARS, the ADSs and/or the Shares at the same time as the offer and sale of the CARS or in secondary market transactions. As a result of such transactions, each initial purchaser may hold long or short positions in such CARS or derivates or in the ADSs or Shares. These transactions may comprise a substantial portion of the offering and no specific disclosure will be made of such positions. Each initial purchaser (or its affiliates) may have purchased CARS and been allocated CARS for asset management and/or proprietary purposes and not with a view to distribution. Such purchases 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 day following the date of the pricing of the CARS. Since trades in the secondary market generally settle in three business days, purchasers who wish to trade CARS on the date of pricing or the next succeeding business day will be required, by virtue of the fact that the CARS initially will settle in T+21, to specify alternative settlement arrangements to prevent a failed settlement. The initial purchasers have performed investment banking and advisory services for us from time to time for which 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 the Securities Act, or to contribute to payments that the initial purchasers may be required to make because of any of those liabilities.

123

VALIDITY OF SECURITIES The validity of the CARS and the ADSs deliverable upon conversion of the CARS will be passed upon for 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 for us 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 and 2007 and our consolidated financial statements as of and for the fiscal years ended March 31, 2005, 2006 and 2007 included in this Offering Memorandum have been audited by Deloitte Haskins & Sells, independent statutory auditors to us, as stated in their reports appearing herein.

124

ENFORCEABILITY OF CIVIL LIABILITIES We are a limited liability public company incorporated under the laws of India. Substantially all of our directors and executive officers are residents of India and all or a substantial portion of our assets and the assets of such persons are located in India. As a result, it may not be possible for investors to (i) effect service of process upon us or such persons in jurisdictions outside of India or (ii) enforce against us or them judgments obtained in courts outside of India. India is not a party to any international treaty in relation to the recognition or enforcement of foreign judgments. Recognition and enforcement of foreign judgments is provided under Section 13 of the Code of Civil Procedure, 1908 (the Civil Code). Section 13 and Section 44A of the Civil Code provide that a foreign judgment shall be conclusive as to any matter thereby directly adjudicated upon except (i) where it has not been pronounced by a court of competent jurisdiction, (ii) where it has not been given on the merits of the case, (iii) where it appears on the face of the proceedings to be founded on an incorrect view of international law or a refusal to recognize the law of India in cases where Indian law is applicable, (iv) where the proceedings in which the judgment was obtained were opposed to natural justice, (v) where it has been obtained by fraud or (vi) where it sustains a claim founded on a breach 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 court in any country or territory outside India which the Government has by notification declared to be a reciprocating territory, it may be enforced in India by proceedings in execution as if the judgment had been rendered by the relevant court in India. However, Section 44A of the Civil Code is applicable only to monetary decrees not being in the nature of any amounts payable in respect of taxes or other charges of a like nature or in respect of a fine or other penalty. Any judgment of a court in a country that has not been declared by the Government of India to be a reciprocating territory for the purpose of Section 44A of the Civil Code may be enforced only by a suit upon the judgment and not by proceedings in execution. The suit must be brought in India within three years from the date of the judgment in the same manner as any other suit filed to enforce a civil liability in India. It is unlikely that a court 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 of damages awarded as excessive or inconsistent with Indian practice. A party seeking to enforce a foreign judgment in India is required to obtain approval from the Reserve Bank of India (RBI) to execute such a judgment or to repatriate outside India any amount recovered.

125

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, the information contained herein is in accordance with the facts and does not omit anything likely to affect the import of such information. This offering and the issue of the CARS were authorized and approved by our Board of Directors on June 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 the CARS are listed on the SGX-ST and the rules of the SGX-ST so require, we will appoint and maintain a paying agent in Singapore, where the CARS may be presented or surrendered for payment or redemption, in the event that the Global Security is exchanged for Individual Securities. In addition, in the event that the Global Security is exchanged for Individual Securities, an announcement of such exchange shall be made by us or on our behalf through the SGX-ST and such announcement will include all material information with respect to the delivery of the 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 through Euroclear and Clearstream, Luxembourg under Common Code number 030788176. See Description of the CARS The Global Security. The CUSIP number for the ADSs is 876568502, and the ISIN for the ADSs is US8765685024. The ADSs have been assigned Common Code number 020233168.

126

Page

Index to the Non-Consolidated Financial Statements Auditors Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit and Loss Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash Flow Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schedules Forming Part of the Profit and Loss Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schedules Forming Part of the Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Significant Accounting Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schedules Forming Part of the Balance Sheet and Profit and Loss Account . . . . . . . . . . . . . . . . . . . . . . . . . F-2 F-3 F-4 F-5 F-6 F-10 F-23 F-26

Index to the Consolidated Financial Statements Auditors Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit and Loss Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash Flow Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schedules Forming Part of the Consolidated Profit and Loss Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schedules Forming Part of the Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Schedules Forming Part of the Consolidated Balance Sheet and Profit and Loss Account . . . . . . . . . . . . . . F-48 F-50 F-51 F-52 F-54 F-56 F-67

F-1

AUDITORS REPORT ON THE NON-CONSOLIDATED FINANCIAL STATEMENTS To the Board of Directors Tata Motors Limited 1. We have examined the non-consolidated Balance Sheets of Tata Motors Limited as at March 31 2005, 2006 and 2007, the non-consolidated Profit and Loss Account and Cash Flow Statements for the years ended on these dates and the accompanying notes and schedules (together comprising the Financial Statements) all expressed in Indian Rupees, as set out in the accompanying Memorandum on pages F-3 to F-47. These Financial Statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these Financial Statements based on our audit. 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 were jointly audited by Messrs A. F. Ferguson & Co. and Messrs S. B. Billimoria & Co. and have been relied upon for the purpose of this report. The audit is conducted in accordance with auditing standards generally accepted in India. Those standards require that the audit be planned and performed to obtain reasonable assurance about whether the Financial Statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Financial Statements. An audit also includes assessing the accounting principles used and significant estimates made by the Management. The audit provides a reasonable basis for the opinion. In our opinion and to the best of our information and according to the explanations given to us, and on the basis stated in Paragraph (2) above, we report that the said Financial Statements give a true and fair view in conformity with the accounting principles generally accepted in India: i ii iii 4. in the case of the Balance Sheet, of the state of affairs of the Company as at March 31 2005, 2006 and 2007; in the case of the Profit and Loss Account, of the profit of the Company for the years ended on those dates; and in the case of the Cash Flow Statement, of the cash flows for the years ended on those dates.

2.

3.

The amounts for the year ended and as at March 31 2007 expressed in U.S. dollars, provided as supplementary information solely for the convenience of the reader, have been translated on the basis set forth in note (C) (vii) on Schedule 14 to the Financial Statements.

For DELOITTE HASKINS & SELLS Chartered Accountants M. S. Dharmadhikari Partner Membership No. 30802 Mumbai: July 6, 2007

F-2

AUDITED NON-CONSOLIDATED FINANCIAL STATEMENTS OF TATA MOTORS LIMITED BALANCE SHEET

Schedule 2005 As at March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S. $ Millions)

SOURCES OF FUNDS 1. SHAREHOLDERS FUNDS (a) Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Reserves and Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. LOAN FUNDS (a) Secured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. DEFERRED TAX LIABILITY (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [Note A (3) (a) Schedule 14] 4. TOTAL FUNDS EMPLOYED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . APPLICATION OF FUNDS 5. FIXED ASSETS (a) Gross Block . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) LessDepreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Net Block . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Capital Work in Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. CURRENT ASSETS, LOANS AND ADVANCES . . . . . . . . . . . . . . . . . . . . (a) Interest accrued on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Sundry Debtors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Cash and Bank Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Loans and Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. CURRENT LIABILITIES AND PROVISIONS (a) Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 2

3,617.9 37,496.0 41,113.9

3,828.7 51,542.0 55,370.7 8,227.6 21,140.8 29,368.4 6,225.4 90,964.5

3,854.1 64,843.4 68,697.5 20,220.4 19,871.0 40,091.4 7,868.3 116,657.2

88.7 1,491.7 1,580.4 465.2 457.1 922.3 181.0 2,683.7

3 4

4,898.1 20,056.1 24,954.2 5,652.8 71,720.9

66,119.5 34,542.8 31,576.7 5,388.4

79,715.5 44,015.1 35,700.4 9,511.9 45,212.3 20,151.5 61.6 20,122.4 7,166.0 11,194.3 56,333.8 94,878.1 57,268.2 12,150.4 69,418.6 25,459.5 141.2 90,964.5

87,758.0 48,945.4 38,812.6 25,133.2 63,945.8 24,770.0 59.4 25,009.5 7,821.8 8,267.6 60,259.9 101,418.2 59,934.5 13,643.2 73,577.7 27,840.5 100.9 116,657.2

2,018.7 1,126.0 892.7 578.2 1,470.9 570.0 1.4 575.3 179.9 190.2 1,386.3 2,333.1 1,378.7 313.9 1,692.6 640.5 2.3 2,683.7

36,965.1 29,120.6 61.2 16,013.6 7,985.8 20,050.4 25,492.6 69,603.6

7 8 9 10

11 12

52,889.4 11,260.6 64,150.0

9. NET CURRENT ASSETS [(7) less (8)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10. MISCELLANEOUS EXPENDITURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (to the extent not written off or adjusted) 11. TOTAL ASSETS (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12. SIGNIFICANT ACCOUNTING POLICIES 13. NOTES TO BALANCE SHEET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13

5,453.6 181.6 71,720.9

14

F-3

TATA MOTORS LIMITED PROFIT AND LOSS ACCOUNT

Schedule 2005 Year Ended March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S. $ Millions)

INCOME 1. SALE OF PRODUCTS AND OTHER INCOME FROM OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LESS : EXCISE DUTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. DIVIDEND AND OTHER INCOME . . . . . . . . . . . . . . . . . . . . . . . . EXPENDITURE 3. MANUFACTURING AND OTHER EXPENSES . . . . . . . . . . . . . . 4. EXPENDITURE TRANSFERRED TO CAPITAL AND OTHER ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A(1)

204,790.0 30,359.8 174,430.2 1,660.9 176,091.1

240,014.4 33,479.5 206,534.9 2,890.8 209,425.7 183,866.6 (3,088.5) 180,778.1 28,647.6 737.8 5,209.4 2,263.5 20,436.9 96.9 20,533.8 (5,245.0) 15,288.8 5,856.0 199.4 5,656.6 20,945.4 4,979.4 698.4 7,500.0 7,767.6 20,945.4 40.57 38.20

318,846.9 43,494.5 275,352.4 2,451.9 277,804.3 247,985.7 (5,770.5) 242,215.2 35,589.1 850.2 5,862.9 3,130.7 25,745.3 (10.9) (2.6) 25,731.8 (6,597.2) 19,134.6 7,767.6 7,767.6 26,902.2 5,780.7 982.5 0.7 10,000.0 10,138.3 26,902.2 49.76 47.24

7,334.9 1,000.6 6,334.3 56.4 6,390.7 5,704.8 (132.7) 5,572.1 818.6 19.5 134.8 72.0 592.3 (0.3) (0.1) 591.9 (151.8) 440.1 178.7 178.7 618.8 133.0 22.6 * 230.0 233.2 618.8 US $ US $ 1.14 1.09

A(2)

154,941.0 (2,181.3) 152,759.7

PROFIT BEFORE DEPRECIATION, INTEREST, EXCEPTIONAL ITEMS AND TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. PRODUCT DEVELOPMENT EXPENDITURE . . . . . . . . . . . . . . . 6. DEPRECIATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. INTEREST [Note B (4) Schedule 14] . . . . . . . . . . . . . . . . . . . . . . . . PROFIT FOR THE YEAR BEFORE EXCEPTIONAL ITEMS AND TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. PROVISION FOR DIMINUTION IN VALUE OF INVESTMENTS (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9. EMPLOYEE SEPARATION COST . . . . . . . . . . . . . . . . . . . . . . . . . PROFIT BEFORE TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10. TAX EXPENSE [Note A(3)(c) Schedule 14] . . . . . . . . . . . . . . . . . PROFIT AFTER TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11. BALANCE BROUGHT FORWARD FROM PREVIOUS YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Arrears of preference dividend pertaining to erstwhile . . . . . . Tata Finance Ltd. (including tax) [Note C(ii)(h) Schedule 14] . . . .

23,331.4 671.2 4,501.6 1,541.5 16,617.1 (96.7) (1.4) 16,519.0 (4,149.5) 12,369.5 3,658.0 3,658.0

AMOUNT AVAILABLE FOR APPROPRIATION . . . . . . . . . . . . . . . . 12. APPROPRIATIONS (a) Proposed Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Tax on Proposed Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Residual dividend paid for preceeding year (including tax) . . . . . (d) General Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Balance carried to Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . .

16,027.5 4,521.9 634.2 15.4 5,000.0 5,856.0 16,027.5

13. EARNINGS PER SHARE a) Basic . . . . . . . . . . . . . . . . . . Rupees [Note B (7) Schedule 14] b) Diluted . . . . . . . . . . . . . . . . Rupees 14. SIGNIFICANT ACCOUNTING POLICIES 15. NOTES TO PROFIT AND LOSS ACCOUNT . . . . . . . . . . . . . . . .

34.38 32.23 14 to 18

F-4

TATA MOTORS LIMITED CASH FLOW STATEMENT

Year Ended March 31, 2005 2006 (in Rs. Millions) A. Cash flow from Operating Activities Profit after tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustments for: Depreciation (including Lease Equalization netted off against income) . . . . . . . . . . . . . . . . . . . . . Profit on sale of assets (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit on sale of investments (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision for diminution in value of investments (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wealth tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest / Dividend (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employee Separation Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Operating Profit before Working Capital changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustments for: Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vehicle loans and hire purchase receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash generated from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Direct taxes refund / (paid) (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net Cash from / (used in) Operating Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B. Cash Flow from Investing Activities Purchase of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sale of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loan to associates, subsidiaries and others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchase of investments in subsidiary companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchase of investments in associate companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sale of investments in Mutual Fund (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Decrease / (Increase) in investments in retained interest in securitisation transactions . . . . . . . . . . Purchase of investmentsOthers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Refund of acquisition tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Refund from escrow account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sale of investments in subsidiary companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sale / redemption of investmentsothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividend / Income on investments received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Increase)/ Decrease in short term Inter-corporate deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net Cash used in Investing Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C. Cash Flow from Financing Activities Proceeds from issue of Foreign Currency Convertible Notes (FCCN) (net of expenses) . . . . . . . . Stamp duty on FCCN conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Premium on redemption of debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceeds from long term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repayment of long term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payment of premium on long term forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Decrease) / Increase in short term loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceeds from issue of shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividend paid (including Dividend tax) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net Cash received / (used) in Financing Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net Increase / (Decrease) in Cash & cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents as at March 31, (Opening Balance) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and Bank balance taken over on amalgamation of Tata Finance Ltd and Telco Dadajee Dhackjee Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and Bank balance taken over on merger of spare parts division of TMISL (formerly known as Concorde Motors Ltd.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less : Exchange fluctuation on FCCN proceeds kept outside India and on foreign currency bank balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents as at March 31, (Closing Balance) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,369.5 4,501.6 (0.3) (479.4) 96.7 5.5 3,638.2 511.3 360.0 (116.1) 40.3 8,557.8 20,927.3 (975.3) (4,519.3) 11,148.6 5,654.0 (10,004.6) (4,350.6) 16,576.7 (4,071.8) 12,504.9 (8,174.7) 38.2 (5,096.6) (1,245.2) (233.4) 4,912.4 595.8 (3,146.3) 42.9 1,150.3 466.5 1,181.5 (57.1) (9,565.7) 17,315.0 (118.6) 985.4 (4,993.6) (547.7) 718.1 (1,653.9) (2,229.1) 9,475.6 15,288.8 5,224.8 (56.0) (1,776.4) (96.9) 4.3 3,823.5 1,421.5 1,148.8 343.2 40.4 10,077.2 25,366.0 (3,170.2) (4,108.8) 1,941.7 (5,337.3) (17,853.9) (23,191.2) 2,174.8 (4,385.1) (2,210.3) (11,234.9) 140.4 (77.4) (2,066.5) 8,486.0 914.7 (300.0) 33.4 2,065.9 130.2 791.7 1,081.0 24.9 (10.6) 4,449.9 (3.7) 10.0 (5,618.1) 847.7 (5,141.6) (3,096.9) (8,552.7) 19,134.6 5,825.1 (146.4) (354.8) 10.9 6.5 4,825.0 1,772.2 1,033.6 (621.7) 40.3 12,390.7 31,525.3 (3,773.8) (4,887.1) 2,219.6 (6,441.3) 1,921.2 (4,520.1) 27,005.2 (4,903.9) 22,101.3 (24,611.9) 951.5 (5,616.4) 1,371.7 (286.6) (67.5) 345.0 412.0 2,076.3 (2,625.1) (28,051.0) (0.9) 17,839.2 (8,142.6) (30.7) 2,738.0 (5,667.0) (3,700.2) 3,035.8 (2,913.9) 11,194.3* (12.8) 8,267.6* 2007 2007 (in U.S. $ Millions) 440.1 134.0 (3.4) (8.2) 0.3 0.1 111.0 40.8 23.8 (14.3) 0.9 285.0 725.1 (86.8) (112.4) 51.1 (148.1) 44.2 (103.9) 621.2 (112.8) 508.4 (566.2) 21.9 (129.2) 31.6 (6.6) (1.6) 7.9 9.5 47.8 (60.4) (645.3) * 410.4 (187.3) (0.7) 63.0 (130.4) (85.1) 69.9 (67.0) 257.5 (0.3) 190.2

12,414.8 (10,773.6) 7,704.9* 20,050.4* 6.3 (75.6) 20,050.4* 1,946.5 (29.0) 11,194.3*

* 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 years figures have been restated, wherever necessary, to conform to this years classification

F-5

SCHEDULE FORMING PART OF THE PROFIT AND LOSS ACCOUNT SCHEDULE A

2005 Year Ended March 31, 2006 2007 2007 (in Rs. Millions) (in U.S. $ Millions)

SALE OF PRODUCTS AND OTHER INCOME 1. Sale of products and other income from operations (a) Sale of Products / Services (Schedule 15) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Income from Hire Purchase/Loan Contracts (Notes 1, 2, 3 & 4 below) . . . . . . . . . . . (c) Miscellaneous income (Note 5 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Exchange differences (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

202,174.2 1,594.7 1,021.1 204,790.0

234,394.1 4,326.7 1,293.6 240,014.4 958.4 110.2 179.4 1,642.8 2,890.8 242,905.2

309,994.3 5,465.1 2,082.7 1,304.8 318,846.9 1,968.2 105.8 138.4 239.5 2,451.9 321,298.8

7,131.3 125.7 47.9 30.0 7,334.9 45.3 2.4 3.2 5.5 56.4 7,391.3

2. Dividend and other income (a) Trade investments (long term) (Note 6 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Other investments (long term) (Note 7 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Other investments (current) (Note 8 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Profit on sale of investments (net) (trade, long term) (Note 9 below) . . . . . . . . . . . .

663.8 61.6 466.5 469.0 1,660.9 206,450.9

2005

Year Ended March 31, 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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Vehicles from Companys stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) Value of vehicles purchased and issued on Hire purchase contracts during the year . . . . (3) (i) Income from Hire purchase contracts includes net income from lease rentals and income on securitisation / sale of receivables under Hire purchase contracts . . . . . . (ii) Income from Loan contracts includes income on securitisation of Loan contracts (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) Income from Loan contracts includes Interest income (net) . . . . . . . . . . . . . . . . . . . . . . . (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)] . . . . . . . . . . . . . . . . . . . . . . (ii) Insurance claims for loss of profit due to fire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) Dividend and other income from trade investments include dividend from subsidiary companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) Includes Tax deducted at source . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8) Includes profit on sale of current investments (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9) Include : (i) Profit on sale of investments in subsidiary company [Note C(iv), Schedule 14 ] . . (ii) Additional consideration received in respect of Trade investment sold in 1999-2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,301.9 5.9 1,856.6 139.5 1,003.3

74.6 0.7 72.0 216.7 762.8 3,052.5

487.2 411.2 4.2 775.0 4,315.0

11.2 9.5 0.1 17.8 99.3

24.9 198.2 9.3 10.4 167.4

61.4 414.0 9.6 133.4 1,643.0

158.9 479.0 869.4 19.3 115.3

3.7 11.0 20.0 0.4 2.7

F-6

SCHEDULE FORMING PART OF THE PROFIT AND LOSS ACCOUNT SCHEDULE B

2005 Year Ended March 31, 2006 2007 (in Rs Millions) 2007 (in US $ Millions) 335.7 4,121.4 189.5 238.9 40.6 35.1 314.6 116.1 110.2 5.4 11.3 75.3 4.6 7.5 0.1 7.0 57.9 76.5 334.5 806.4 17.5

MANUFACTURING AND OTHER EXPENSES 1. Purchase of products for sale etc [Note B (1) Schedule 14] . . . . . . . . . . . . . . . . . . . . . . . 2. Consumption of raw materials and components (Schedule 18) . . . . . . . . . . . . . . . . . . . . 3. Processing charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Payments to and provisions for employees [Note B (5), Schedule 14]: (a) Salaries, wages and bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Contribution to provident and other funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Workmen and staff welfare expenses [Note (i)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Expenses for Manufacture, Administration and Selling : (a) Stores, spare parts and tools consumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Freight, transportation, port charges, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Repairs to buildings [Note (ii)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Repairs to plant, machinery, etc. [Note (iii)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Power and fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (f) Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (g) Rates and taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (h) Provision for Wealth tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (j) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (k) Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (l) Incentive / Commission to dealers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (m) Works operation and other expenses [Note (iv)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. Excise Duty on Stock-in-trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. Changes in Stock-in-trade and Work-in-progress : Opening Stock (i) Work-in-progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Stock-in-trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Add: Stock taken over on merger of spare parts division of Concorde Motors Ltd (now known as Tata Motors Insurance Services Ltd.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LessClosing Stock (i) Work-in-progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Stock-in-trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,692.3 112,602.5 5,556.6 8,008.8 1,182.3 1,242.7 10,433.8 3,331.4 2,393.1 242.1 369.8 2,378.1 119.5 287.9 5.5 241.9 1,723.7 1,446.3 8,472.4 21,011.7 84.1

9,987.4 132,651.2 6,257.0 8,837.2 1,392.9 1,241.6 11,471.7 3,691.6 3,351.3 276.7 456.1 2,585.1 152.6 335.8 4.3 281.5 1,872.5 2,335.2 10,403.9 25,746.6 321.8

14,592.0 179,157.3 8,237.9 10,386.8 1,765.1 1,526.4 13,678.3 5,046.3 4,790.4 234.9 491.6 3,274.1 199.6 325.1 6.5 305.6 2,515.4 3,326.5 14,541.1 35,057.1 759.9

1,766.4 4,752.9 6,519.3 18.2 2,644.6 5,332.9 7,977.5 (1,440.0) 154,941.0

2,644.6 5,332.9 7,977.5 2,863.1 7,683.5 10,546.6 (2,569.1) 183,866.6

2,863.1 7,683.5 10,546.6 3,013.2 11,030.2 14,043.4 (3,496.8) 247,985.7

65.9 176.8 242.7 69.3 253.7 323.0 (80.3) 5,704.8

F-7

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 (ii) Item 5 (iii) Item 5 (iv) Item 5 (c): Workmen and staff welfare expenses include provisions for other employee benefit schemes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c): Repairs to buildings exclude amounts charged to other revenue accounts . . . . (d): Repairs to plant, machinery, etc. exclude amounts charged to other revenue accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (m): Works operation and other expenses include (1) Loss on assets scrapped / written off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) Lease rentals in respect of plant & machinery . . . . . . . . . . . . . . . . . . . . . . . . . . (3) Commission and Brokerage on sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) Provision and write off for sundry debtors / advances (net) . . . . . . . . . . . . . . . (5) Securitisation expenses for Hire purchase / Loan contracts . . . . . . . . . . . . . . . . (6) Exchange differences (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) Contribution to Electoral Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

229.6 51.6 1,067.4 24.6 102.2 251.0 126.8 62.7 258.4 30.0

143.3 64.1 1,026.9 5.4 81.6 36.4 615.1 485.9 198.4

266.3 89.6 1,236.3 12.5 29.4 53.3 1,657.4 629.5

6.1 2.1 28.4 0.3 0.7 1.2 38.1 14.5

F-8

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] . . . 2. The above is inclusive of : (a) Estimated expenditure on perquisites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Contribution to provident / superannuation funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Commission to directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Directors sitting fees [Note (b)(ii) below] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notes : (a) Excludes retirement benefits relating to former whole-time directors . . . . . . . . . . . . . . . . . . . . . . (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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (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) . . . . . . . . . . . . . . . . . . . . .

54.3 2.6 2.0 39.5 1.6

55.5 3.7 2.0 39.0 1.4

67.7 2.4 2.1 52.0 1.2

1.6 0.1 * 1.2 *

2.9

2.9

3.7

0.1

8.8 0.2

F-9

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 at March 31, 2005 : 400,000,000 shares) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,000.0 4,000.0

4,100.0 4,100.0

4,500.0 4,500.0

103.5 103.5

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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Calls in arrears . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,617.5 0.1 3,617.4 0.5 3,617.9

3,828.3 0.1 3,828.2 0.5 3,828.7

3,853.7 0.1 3,853.6 0.5 3,854.1

88.7 * 88.7 * 88.7

F-10

SCHEDULE FORMING PART OF THE BALANCE SHEET SCHEDULE 2

2004 As at April 1, 2005 2006 Opening Balance (in Rs. Millions) 2005 For year ended March 31, 2006 2007 2005 2006 2007 Additions Deductions (in Rs. Millions) (in Rs. Millions) 2005 As at March 31, 2006 2007 Closing Balance (in Rs. Millions) 2007 (in U.S. $ Millions)

RESERVES AND SURPLUS (a) Securities premium account [Note (i) and (ii)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Capital redemption reserve [Note (iii)(a)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Debenture redemption reserve [Note (iii)(b)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Amalgamation reserve [Note (iii)(c)] . . . . (e) Special reserve [Note (iii)(d)] . . . . . . . . . . (f) Revaluation Reserve [Note (iii)(e)] . . . . . . (g) General reserve [Note (iv)] . . . . . . . . . . . .

16,813.4 22.8 3,341.5 0.5 8,531.5 28,709.7

14,738.9 22.8 3,341.5 0.5 13,536.3 31,640.0

18,287.0 22.8 3,343.5 0.5 550.5 263.9 21,306.2 43,774.4

1,271.0 5,004.8 6,275.8

3,763.8 393.5 203.0 4.8 550.5 268.2 9,360.3 14,544.1

1,077.9 10,000.0 11,077.9

3,345.5 3,345.5

215.7 393.5 201.0 4.8 4.3 1,590.4 2,409.7

0.9 4.4 141.9 147.2

14,738.9 22.8 3,341.5 0.5 13,536.3 31,640.0 5,856.0 37,496.0

18,287.0 22.8 3,343.5 0.5 550.5 263.9 21,306.2 43,774.4 7,767.6 51,542.0

19,364.0 22.8 3,343.5 0.5 550.5 259.5 31,164.3 54,705.1 10,138.3 64,843.4

445.5 0.5 76.9 * 12.7 6.0 716.9 1,258.5 233.2 1,491.7

F-11

(h) Profit and loss account . . . . . . . . . . . . . . . .

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (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 Right issue of shares [Note A 1(c) to A 1(e), Schedule 14] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Consequent to amalgamation of Telco Dadajee Dhackjee Ltd [Note C (iii), Schedule 14] . . . . . . . . . . . . . . . . . (d) FCCN issue expenses (2005-06 expenses net of tax) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Provision for premium on redemption of FCCN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (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)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (g) Stamp Duty charges on conversion of FCCN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

118.6

1,271.0

306.2 2,920.7

3,648.2 115.6

115.6 50.4

938.4

1,271.0

3,345.5

3,763.8

46.0 3.7 215.7

139.5 1,077.9

0.9 0.9

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Debenture redemption reserve on account of amalgamation of Tata Finance Ltd . . . . . . . . . . . . . . . . . . . . . . . . (c) Amalgamation reserve on account of amalgamation of Tata Finance Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Special reserve on account of amalgamations of: (i) Tata Finance Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Telco Dadajee Dhackjee Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Revaluation reserve on account of: (i) Amalgamation of Telco Dadajee Dhackjee Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Depreciation on revalued portion of assets taken over on amalgamation of Telco Dadajee Dhackjee Ltd . . . (iv) Changes in General Reserve (a) Upon amalgamation of: (i) Tata Finance Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Telco Dadajee Dhackjee Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iii) Suryodaya Capital and Finance (Bombay) Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (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] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Excess of assets over liabilities on merger of spare parts division of Tata Motors Insurance Services Limited (formerly known as Concorde Motors Ltd.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Amount transferred from Profit and Loss Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393.5 203.0 4.8 537.8 12.7 550.5 268.2 268.2 393.5 201.0 4.8 4.3 4.3 4.4 4.4

F-12

4.8 5,000.0 5,004.8

1,853.0 7.3 7,500.0 9,360.3

1,252.2 330.5 7.7 1,590.4

10,000.0 10,000.0

141.9 141.9

SCHEDULES FORMING PART OF THE BALANCE SHEET SCHEDULE 3

2005 As at March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S. $ Millions)

LOANSSecured (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)] . . . . . . . . . . . . . (ii) 13.50% Non-Convertible Debentures (2005) [Notes A(2)(i)(a) & A(2)(ii)] . . . . . . . . . . . . (iii) Floating Rate Non-Convertible Debentures (2007) [Notes A(2)(i)(a) & A(2)(ii)]* . . . . . . (b) Loan from Technology Development Board [Note A(2)(i)(b)] . . . . . . . . . . . . . . . . . . . . . . . . (c) Sales Tax Deferment Loan [Note A(2)(i)(e)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Loans from Housing Development Finance Corporation Ltd. [Note A(2)(i)(c)] . . . . . . . . . . . (e) Loan from International Finance Corporation US$ 50 million [Note A(2)(i)(d)]** . . . . . . . . . (f) From Banks: (i) Loans and Cash Credit Accounts [Note A(2)(i)(g)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Loans and Overdraft Accounts [Note A(2)(i)(h)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iii) Buyers line of credit [Note A(2)(i)(f) and A(2)(i)(g)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

705.0 70.0 50.0 230.0 1,106.1 30.1 2,187.5 349.1 170.3 4,898.1

705.0 50.0 180.0 869.8 5,779.8 643.0 8,227.6

705.0 50.0 60.0 732.8 14,007.5 352.5 4,312.6 20,220.4

16.2 1.2 1.4 16.9 322.2 8.1 99.2 465.2

* **

At 1 year Government Security benchmark semi-annual rate + 140 basis points At 6 month LIBOR + 150 basis points

SCHEDULE 4
2005 As at March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S. $ Millions) 405.9 46.7 4.5 457.1

LOANSUnsecured (a) Foreign Currency Convertible Notes (FCCN) [Note (C) (i) Schedule 14] . . . . . . . . . . . . . . (b) Long term loans in foreign currency (others) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Loans from others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17,962.0 2,092.4 1.7 20,056.1

19,046.2 2,091.0 3.6 21,140.8

17,646.9 2,028.3 195.8 19,871.0

F-13

SCHEDULE FORMING PART OF THE BALANCE SHEET SCHEDULE 5

Cost as at March 31, [Note (iv)] 2005 2006 (in Rs. Millions) 2007 Accumulated Depreciation up to March 31, [Note (v) and (viii)] 2005 2006 (in Rs. Millions) 2007 2005 Net Book Value as at March 31, 2006 (in Rs. Millions) 2007 2007 (in U.S. $ Millions)

FIXED ASSETS (a) Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Buildings, etc. [Note (i), (ii)(a) & (iii)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Leasehold Land [(Note (ii)(b)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Railway Sidings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Plant & Machinery and Equipment, etc. [Note (ii)(a) & (iii)] . . . . . . . . . . . . . . . . (f) Water System and Sanitation [Note (ii)(a)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (g) Furniture, Fixtures and Office Appliances [Note (iii)] . . . . . . . . . . . . . . . . . . . . . (h) Technical Know-how . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (j) Vehicles and Transport [Note (iii)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (k) Plant taken on lease [Note (vii)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (l) Leased premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (m) Assets given on lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (n) Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (o) Product Development Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital Work-in-Progress [Note (vi)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Grand Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notes: (i) (ii) (a)

4.0 7,238.1 387.4 1.3 53,255.8 425.6 443.4 345.1 788.9 1,887.3 580.8 761.8 66,119.5

53.1 8,020.6 387.4 60,000.1 452.2 702.7 345.1 932.8 1,885.7 312.8 4,517.0 911.3 1,194.7 79,715.5

53.1 8,391.1 722.7 67,074.4 554.7 734.2 345.1 1,022.6 1,507.5 312.8 4,429.4 1,255.6 1,354.8 87,758.0

2,156.1 36.5 1.3 30,115.3 195.6 242.0 345.1 500.3 729.3 16.5 204.8 34,542.8

2,344.8 40.3 34,255.5 213.6 347.6 345.1 568.5 885.0 6.6 4,257.0 204.7 546.4 44,015.1

2,564.2 44.4 38,181.4 233.5 369.2 345.1 595.7 883.9 11.7 4,193.1 500.1 1,023.1 48,945.4

4.0 5,082.0 350.9 23,140.5 230.0 201.4 288.6 1,158.0 564.3 557.0 31,576.7 5,388.4 36,965.1

53.1 5,675.8 347.1 25,744.6 238.6 355.1 364.3 1,000.7 306.2 260.0 706.6 648.3 35,700.4 9,511.9 45,212.3

53.1 5,826.9 678.3 28,893.0 321.2 365.0 426.9 623.6 301.1 236.3 755.5 331.7 38,812.6 25,133.2 63,945.8

1.2 134.0 15.6 664.7 7.4 8.4 9.8 14.3 6.9 5.4 17.4 7.6 892.7 578.2 1,470.9

F-14
(iii) (iv) (v) (vi)

(b)

(a) (b) (c) (a) (b) (c) (d) (e) (a) (b) (c) (vii) (viii)

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. 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, 2006 Rs 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. The registration of leasehold land acquired during 2006-07 is in process. 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. Cost of fixed assets includes: 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). 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. Rs. 380 million taken over on amalgamation of Telco Dadajee Dhakjee Ltd (TDDL) with effect from April 1, 2005. Accumulated Depreciation includes: 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. 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. lease equalisation of Rs. 37.8 millions (2005-06 Rs. 15.4 millions; 2004-05 Rs.NIL) adjusted in lease rental income. depreciation of Rs. 4.4 millions (2005-06 Rs. 4.3 millions) on revalued portion of gross block of TDDL transferred to Revaluation Reserve. 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). Capital Work-in-progress includes: 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 development projects Rs. 4,744.2 millions (as at March 31, 2006 Rs. 2,076 millions, as at March 31, 2005 Rs. 844.7 millions). 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) 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). The assets are under renewable secondary lease. Accumulated Depreciation includes amortisation, diminution in value of assets and write down of assets net of reversals.

SCHEDULE FORMING PART OF THE BALANCE SHEET INVESTMENTS SCHEDULE 6

As at March 31, 2007 Face Value Per Unit Number Rupees As at March 31, Description 2005 2006 (in Rs. Millions) 2007 2007 (in U.S. $ Millions)

493,970 25,806,729 70,249

10 10 10

I. Long Term Investments (at Cost) (A) Trade Investments (1) Fully paid Ordinary/Equity shares (Quoted) Automobile Corporation of Goa Ltd. . . . . . . . . . . . . . . . . . . Tata Steel Ltd [Note 15] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Finance Ltd [Note 13] . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Chemicals Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) Investments in Subsidiary Companies (a) Fully Paid Ordinary / Equity Shares (Unquoted) Sheba Properties Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Technologies Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Telco Dadajee Dhackjee Ltd [Note 13] . . . . . . . . . . . . . . . . . Telco Construction Equipment Company Ltd [Note 10] . . . . Concorde Motors (India) Ltd. . . . . . . . . . . . . . . . . . . . . . . . . TAL Manufacturing Solutions Ltd. (Note 7) . . . . . . . . . . . . . HV Transmissions Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HV Axles Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Motors Insurance Services Ltd [Note 16] . . . . . . . . . . . Suryodaya Capital and Finance (Bombay) Ltd [Note 13] . . . Tata Daewoo Commercial Vehicle Co. Ltd (Korea) . . . . . . . Tata Motors European Technical Centre Plc, UK . . . . . . . . . INCAT Systems Inc. (formerly Tata Technologies Ltd, USA) [Note 9] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TML Financial Services Ltd. . . . . . . . . . . . . . . . . . . . . . . . . (450,000,000 shares acquired during 2006-07) Tata Marcopolo Motors Ltd. . . . . . . . . . . . . . . . . . . . . . . . . (25,500 shares acquired during 2006-07) (b) Partly Paid Up Equity Shares (Unquoted) Tata Motors (Thailand) Ltd (25% paid Up) . . . . . . . . . . . . . . (3,507,000 Shares acquired during 2006-07) (c) Fully paid Cumulative Redeemable Preference Shares (Unquoted) 7% Concorde Motors (India) Limited . . . . . . . . . . . . . . . . . . (3) Fully Paid Ordinary / Equity Shares (Unquoted) in Others Tata Precision Industries Pte. Ltd., (Singapore) [Note 5] . . . . . . . Tata International Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Services Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The Associated Building Company Ltd. . . . . . . . . . . . . . . . . . . . Tata Industries Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Projects Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,500 shares allotted @ Rs. 6,000/- per share on conversion of 7,500 partly convertible debentures during 2006-07) . . . . . . . . . . NITA Co. Ltd., (Bangladesh) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Kulkarni Engineering Associates Ltd. . . . . . . . . . . . . . . . . . . . . . Tata Cummins Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Sons Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Holset Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,250,000 shares sold during 2006-07) Tata Teleservices Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata AutoComp Systems Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . Haldia Petrochemicals Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hispano Carrocera, S. A [Note 8] . . . . . . . . . . . . . . . . . . . . . . . . . Tata Securities Private Ltd [Note 14] . . . . . . . . . . . . . . . . . . . . . . . [184,880 Bonus shares received during 2006-07] . . . . . . . . . . . . . Oriental Floratech (India) Pvt. Ltd [Note 14] . . . . . . . . . . . . . . . . . TSR Darashaw Ltd [Notes 14 & 17] . . . . . . . . . . . . . . . . . . . . . . . (42,886 shares sold during 2006-07) . . . . . . . . . . . . . . . . . . . . . . . Carried forward

8.8 2,162.3 599.3 2.4 2,772.8

8.8 2,162.3 2.4 2,173.5

8.8 2,162.3 2.4 2,173.5

0.2 49.7 0.1 50.0

7,500,000 30,300,600 59,750,000 2,448,120 65,000,000 40,000,000 45,000,000 500,000 3,016,060 500,000 7,900 450,000,000 25,500

100 10 10 10 10 10 10 10 (KRW) 5000 (GBP) 1 10 10

750.0 221.0 452.7 1,595.0 296.3 1,500.0 800.0 900.0 173.1 8.2 2,487.5 9,183.8

750.0 2,241.0 1,195.0 296.3 1,500.0 800.0 900.0 173.1 2,454.1 40.2 6.3 10,356.0

750.0 2,241.0 1,195.0 296.3 1,500.0 800.0 900.0 173.1 2,454.1 40.2 6.3 5,500.0 0.3 15,856.3 116.1

17.3 51.6 27.5 6.8 34.5 18.4 20.7 4.0 56.5 0.9 0.1 126.5 * 364.8 2.7

3,507,000

(THB) 100

1,354,195

100

119.3 9,303.1

135.4 10,491.4 31.1 38.5 1.4 0.1 829.7 1.8 12.7 6.7 900.0 687.5 22.5 320.0 986.7 225.0 23.4 1.4 2.4 36.3 4,127.2 16,792.1

135.4 16,107.8 31.1 38.5 1.4 0.1 829.7 46.8 12.7 6.7 900.0 687.5 320.0 986.7 225.0 23.4 1.4 2.4 19.4 4,132.8 22,414.1

3.1 370.6 0.7 0.9 * * 19.1 1.1 0.3 0.2 20.7 15.8 7.4 22.7 5.2 0.5 * 0.1 0.4 95.1 515.7

5,059,203 25,000 1,383 350 6,665,780 22,500 16,000 33,600 90,000,000 12,375 22,000,200 83,867,086 22,500,001 28,263 300,430 240,000 49,436

1(S$) 1000 1000 900 100 100 (TK)1000 100 10 1000 10 10 10 (Euro) 31.28 10 10 100

31.1 38.5 1.4 0.1 779.4 1.8 12.7 6.7 900.0 687.5 22.5 20.0 986.7 225.0 23.4 3,736.8 15,812.7

F-15

SCHEDULE FORMING PART OF THE BALANCE SHEET INVESTMENTS (Contd.) SCHEDULE 6 (Contd.)
Face Value Per Unit Rupees As at March 31, Description 2005 2006 (in Rs. Millions) 2007 2007 (in U.S. $ Millions)

Number

I. Long Term Investments (at Cost) (Contd.) Brought forward (4) Fully paid Cumulative Redeemable Preference Shares (Unquoted) in others 6% Tata Sons Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7% Tata AutoComp Systems Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . 7.50% Rallis India Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) Non Convertible Debentures (Unquoted) 11.00% Automobile Corporation of Goa Ltd. . . . . . . . . . . . . . . . . . 0.01% Tata Finance Limited [Note 13] . . . . . . . . . . . . . . . . . . . . . . . Rushi Automobiles Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8% Tata Projects Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15,000 partly convertible debentures allotted during 2006-07 of which 7,500 were converted into 7,500 fully paid shares) Total (A) Trade Investments . . . . . . . . . . . . . . . . . . . . . . . . . . (B) Other Investments (1) Fully paid Equity Shares (Unquoted) NICCO Jubilee Park Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) Fully paid Corporate Bonds (Quoted) 6.25% EXIM 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.50% EXIM 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.30% EXIM 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.60% HDFC Limited 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.70% Indogulf Fertilisers Limited 2007 . . . . . . . . . . . . . . . . . . . . . . 10.25% Indian Oil Corporation 2006 . . . . . . . . . . . . . . . . . . . . . . . . . 5.00% Tax free National Housing Bank 2005 . . . . . . . . . . . . . . . . . . 6.60% Panatone Fininvest Ltd 2008 . . . . . . . . . . . . . . . . . . . . . . . . . 6.75% Tax free Unit Trust of India 2008 . . . . . . . . . . . . . . . . . . . . . . 7.10% Tata Sons 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total (B) Other Investments . . . . . . . . . . . . . . . . . . . . . . . . . . Long Term Investments (Sub-total A + B) . . . . . . . . . . . . . . Less: Provision for Diminution in value of Long Term Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total (I) Long Term Investments . . . . . . . . . . . . . . . . . . . . . . II. Current Investmentsothers (at Cost or Fair value whichever is lower) (A) Investments in Mutual Fund (Unquoted) (a) Floater Dividend (including dividend reinvested) Deutsche Floating Rate Fund Regular PlanWeekly Dividend . . . HDFC Floating Rate Income FundShort Term Plan Growth . . . . HSBC Floating Rate FundLong Term Plan Institutional Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HSBC Floating RateLong Term Plan Institutional Option . . . . . . ING Vysa Floating Rate FundQuarterly Dividend . . . . . . . . . . . . J M Floater (Long-Term) Premium Dividend . . . . . . . . . . . . . . . . . . Kotak Flexidebt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Kotak Floater Long Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Principal Floating Rate FundFMPInstitutional Option . . . . . . . (b) Liquid Dividend Plan (including dividend reinvested) DSP Liqidity FundWeekly Dividend . . . . . . . . . . . . . . . . . . . . . . . HDFC Cash Management Savings PlanWeekly Dividend Reinvestment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HDFC Cash Management Savings Plus PlanDividend . . . . . . . . . HSBC Cash Fund Institutonal PlusWeekly Dividend . . . . . . . . . . JM High Liquidity Super Institutional . . . . . . . . . . . . . . . . . . . . . . . . Kotak Liquid IP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Principal Cash Management FundInstitutional Premium Plan . . . SBI Magnum Institutional IncomeSavingsDividend . . . . . . . . . Tata Liquid Super High Investment FundWeekly Dividend . . . . . UTI Liquid Cash Plan InstitutionalWeekly Income Option . . . . . Investments in Mutual Fund (Unquoted) Carried forward 15,812.7 100.0 210.0 50.0 360.0 680,000 7,500 100 3000 60.0 1,500.0 16,792.1 100.0 210.0 50.0 360.0 23.8 22,414.1 100.0 210.0 50.0 360.0 18.9 22.5 515.7 2.3 4.8 1.2 8.3 0.4 0.5

100,000 21,000,000 5,000,000

1,000 10 10

1,560.0 17,732.7

23.8 17,175.9

41.4 22,815.5

0.9 524.9

50,000 10 10 5 100 700 25 3,607,493 10

10 10,000,000 10,000,000 10,000,000 1,000,000 500,000 10,000,000 100 10,000,000

0.5 97.9 98.7 51.7 104.2 365.7 53.2 50.2 246.2 378.5 100.0 1,546.3 1,546.8 19,279.5 853.4 18,426.1

0.5 97.9 98.7 51.7 104.2 365.7 53.2 246.2 378.5 100.0 1,496.1 1,496.6 18,672.5 777.2 17,895.3

0.5 97.9 98.7 51.7 104.2 365.7 246.2 378.5 100.0 1,442.9 1,443.4 24,258.9 785.8 23,473.1

* 2.3 2.3 1.2 2.4 8.4 5.7 8.7 2.3 33.3 33.3 558.2 18.1 540.1

150.8 52.3 257.4 202.0 151.8 355.3 182.6 102.8 102.2 300.5 400.0 551.5 1.9 380.3 100.2 553.7 351.3 650.1 150.1 4,996.8

F-16

SCHEDULE FORMING PART OF THE BALANCE SHEET INVESTMENTS (Contd.) SCHEDULE 6 (Contd.)
Face Value Per Unit Rupees As at March 31, Description 2005 2006 (in Rs. Millions) 2007 2007 (in U.S. $ Millions)

Number

II. Current Investmentsothers (at Cost or Fair value whichever is lower) (Contd.) (A) Investments in Mutual Fund (Unquoted) (Contd.) Investments in Mutual Fund (Unquoted) Brought forward (c) Short Term Plan (including dividend reinvested) Birla Bond Plus Institutional PlanDividend Reinvestment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deutsche Short Maturity FundWeekly Dividend Plan . . . Reinvestment monthly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prudential ICICI Institutional Short Term Plan . . . . . . . . . . (d) Monthly Income Plan HDFC Multiple Yield FundGrowth . . . . . . . . . . . . . . . . . (e) Fixed Maturity Plan Birla Fixed Maturity Plan Yearly Growth 14 Plan B . . . . . . Birla Fixed Term Plan Series AGrowth . . . . . . . . . . . . . . Grindlays Fixed Maturity Annual Plan Growth . . . . . . . . . . Grindlays Fixed Maturity Annual Plan 2 . . . . . . . . . . . . . . . Grindlays Fixed Maturity 7th Plan BGrowth . . . . . . . . . . HDFC Fixed Investment PlanMarch 2004 (I)Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HDFC Fixed Investment Plan July 2004 (2)Growth . . . . . ING Vysa Fixed Maturity Fund Series -(2)- Growth Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . JM Fixed Maturity Plan QSA5 . . . . . . . . . . . . . . . . . . . . . . . Principal Deposit Fund (FMP-6) 371daysMarch 2004 Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Principal Deposit Fund (FMP-3) 91days . . . . . . . . . . . . . . . . Pru ICICI FMP Quarterly Series XXV . . . . . . . . . . . . . . . . . SBI Magnum Debt Fund Series 60 days (FEB 05 Series) Dividend Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SBI Magnum Debt Fund Series 15 mths (Jan 05) Growth Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Fixed Horizon Fund YearlyGrowth . . . . . . . . . . . . . . Tata Fixed Horizon Fund Yearly Growth Sept 04 . . . . . . . . Tata Fixed Horizon Series 1Plan A (371 Days)Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Fixed Horizon Yearly Growth (Jan 05) . . . . . . . . . . . . Tata Fixed Horizon Fund Yearly Growth (Nov 04) . . . . . . . UTI FMP-QFMP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . UTI FMP-YFMPGrowth Plan . . . . . . . . . . . . . . . . . . . . . . (f) Income Plan 30,000,000 10 JM Equity and Derivative Fund Growth . . . . . . . . . . . . . . . . 21,757,084 10 JM Equity and Derivatives fundDividend Option . . . . . . . (B) Investments in Equity shares (Quoted) 35,000 10 Elcot Power Control Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . 91,800 10 Munis Forge Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30,997 10 Roofit Industries Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (C) Investments in Government Securities (Quoted) 11.50% Government of India 2007 Stock . . . . . . . . . . . . . . . 170 1000 12.00% Uttar Pradesh 2011 Stock . . . . . . . . . . . . . . . . . . . . . 200 1000 13.00% Maharashtra State Development Loan 2007 . . . . . . 13.00% Industrial Finance Corporation of India 2007 7,500 1000 Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.50% Madhya Pradesh Electricity Board 2007 Bonds . . . (D) Investments in Preference Shares (Unquoted) 100,000 100 15.50% Pennar Paterson Securities Ltd . . . . . . . . . . . . . . . . . 15.00% Atcom Technologies Ltd.Cumulative Preference 200,000 100 Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Provision for Diminution in value of Current Investments Total (II)Current Investments . . . . . . . . . . . . . . . . III. Retained interest in securitisation transactions ( Unquoted) (long term) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TotalInvestments (I + II + III) . . . . . . . . . . . . . . . .

4,996.8 75.3 150.8 75.2 150.0 200.0 150.0 250.0 250.0 191.9 100.0 150.0 330.0 100.0 302.6 150.0 100.8 253.0 151.1 200.0 130.0 500.0 150.0 150.0 100.0 100.0 250.0 300.0 10,007.5 10,007.5 687.0 29,120.6

200.0 250.0 100.0 100.0 200.0 150.0 250.0 300.0 205.5 3.7 3.7 1.9 0.3 0.2 0.2 7.5 10.0 10.0 20.0 1,813.0 39.3 1,773.7 482.5 20,151.5

300.0 219.9 3.7 3.7 1.9 0.2 0.2 7.5 10.0 20.0 567.1 39.3 527.8 769.1 24,770.0

6.9 5.1 0.1 0.1 * * * 0.2 0.2 0.5 13.1 0.9 12.2 17.7 570.0

F-17

SCHEDULE FORMING PART OF THE BALANCE SHEET INVESTMENTS (Contd.) SCHEDULE 6 (Contd.)
2005 As at March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S. $ Millions) 82.6 487.2 304.4

NOTES : (1) Face Value per unit in Rupees unless stated otherwise . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) Book Value of quoted investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) Book Value of unquoted investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) Market Value of quoted investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (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 and other facilities extended by the Bank to TPI and Tata Engineering Services Pte Ltd (TES), Singapore, a wholly owned subsidiary of TPI, aggregating Singapore $ 3 Million and Singapore $ 10.85 Million respectively. (6) i) During 2004-05, in terms of the Scheme approved by The High Courts of Judicature at New Delhi and Mumbai, the Sales and Service division of Concorde Motors Ltd (CML) was transferred to Concorde Motors (India) Ltd. (CMIL) and in consideration of such divestment of net assets, CMIL issued 2,435,000 Preference Shares of Face Value Rs.100 each at par to the shareholders of CML. The Company received 1,193,150 Preference Shares issued by CMIL and accordingly the cost of investments in CML was adjusted. ii) The Company made a further investment of Rs. 92.4 Millions on October 21, 2004 in CML by way of purchase of shares. Consequently, CML became 100% subsidiary of the Company. iii) During 2004-05, CML effected reduction of its Equity Share Capital as per the scheme approved by The High Court of Judicature at Mumbai. Consequent to such reduction of Share Capital, the Company holds 500,000 shares of face value of Rs 10 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 Manufacturing Solutions Ltd. (TAL). During 2004-05, TAL has effected reduction of its Equity Share Capital 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 of face value of Rs 10 each in TAL in place of 150,000,000 shares of Rs 10 each. The provision 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 the management to be adequate. (8) The Company acquired 21% shares in Hispano Carrocera, S.A. on March 16, 2005. As per 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% of the shares through one or more transfers, as per terms and conditions duly agreed upon at a price not exceeding Euro 2 millions. The Company has also given a letter of comfort to Standard Chartered Bank and Citibank NA against working capital loans extended by both the banks to Hispano aggregating Euro 7 million each. The Company has also given an undertaking to Standard Chartered Bank and Citibank NA for non-disposal of its shareholding in Hispano during the tenure of the loan. (9) The Company has given a letter of comfort to Standard Chartered Bank against the term loan upto US $ 60 million extended by the bank to INCAT Systems Inc. (formerly Tata Technologies Ltd, USA), an indirect subsidiary of the Company. (10) As per the shareholders agreement dated December 9, 2005, between Hitachi Construction Machinery Co. Ltd and the Company, these shares are under restriction for sale, assign or transfer for a period of 5 years from the date of the agreement. (11) Trade Investments also include: Face Value Per Unit Rupees 10 5 1(M$) 10 25,000 10 10

4,319.1 24,801.5 12,608.5

3,665.8 16,485.7 15,500.0

3,591.4 21,178.6 13,230.8

Number 5,000 50 1,656,517 100 4 100 200

Description Metal Scrap Trade Corporation Ltd. . . . . . . . . . . . Jamshedpur Co-operative Stores Ltd. . . . . . . . . . . Tatab Industries Sdn. Bhd. Malaysia . . . . . . . . . . . . American Express Services Ltd . . . . . . . . . . . . . . . ICICI Money Multiplier Bond . . . . . . . . . . . . . . . . . Optel Telecommunications . . . . . . . . . . . . . . . . . . . Punjab Chemicals . . . . . . . . . . . . . . . . . . . . . . . . . . .

Rupees 25,000 250 1

Rupees 25,000 250 1 1 1 1,995 1

Rupees 25,000 250 1 1 1 1,995 1

F-18

SCHEDULE FORMING PART OF THE BALANCE SHEET INVESTMENTS (Contd.) SCHEDULE 6 (Contd.)
(12) Current Investments acquired and sold during 2006-07: No. of Units 133,636,183 135,030,032 50,007,439 40,790,685 84,990,973 44,616,300 1,394,656 314,275,192 473,968,864 60,004,315 204,036,053 358,921,705 1,884,634 249,974 640,304 2,891,209 Face value Purchase Cost (in U.S. $ in Rs. Millions in Rs. Millions Millions) 1,336.4 1,350.3 500.1 407.9 849.9 446.2 13.9 3,142.8 4,739.7 600.0 2,040.4 3,589.2 1,884.6 2.5 6.4 2,891.2 1,340.4 1,350.6 500.1 500.1 850.1 450.0 14.3 3,450.6 4,741.4 600.1 2,040.4 3,600.9 2,100.5 250.0 650.8 2,947.0 30.8 31.1 11.5 11.5 19.6 10.4 0.3 79.4 109.1 13.8 46.9 82.8 48.3 5.8 15.0 67.8

Name Birla Cash Plus IP PremiumWeekly Dividend Reinvestment . . . . . . . . . . . . . . . . . . Birla Sun Life Cash Manager-IPDaily Dividend Reinvestment . . . . . . . . . . . . . . . . Grindlays CF Super IP C Daily Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HDFC Liquid Fund Premium PlanDaily Dividend Reinvest . . . . . . . . . . . . . . . . . . ING Vysya Liquid Fund Super InstitutionalDaily Dividend Option . . . . . . . . . . . . . ING Vysya Liquid Fund Institutional Weekly Dividend Option . . . . . . . . . . . . . . . . . JM Equity and Derivative FundDividend Option . . . . . . . . . . . . . . . . . . . . . . . . . . . LIC Liquid Fund-Dividend Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Principal Cash Management fund Institutional Premium PlanWeekly Dividend . . . Principal Cash Management Fund-Liquid Option-Inst Premium- Dividend Reinvestment Daily . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prudential ICICI Institutional Liquid PlanSuper Institutional Daily Dividend . . . . . SBI Magnum Institutional Income-Savings Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Liquid Super High Investment Fund-Daily Dividend . . . . . . . . . . . . . . . . . . . . . . Templeton India Treasury Management Account Super Institutional Plan-Daily Dividend Reinvestment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Templeton India Treasury Management Account Super Institutional PlanWeekly Dividend Reinvestment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . UTI Liquid Cash Plan InstitutionalDaily Income Option-Reinvestment . . . . . . . . .

(13) Consequent to amalgamation of Tata Finance Ltd, Telco Dadajee Dhackjee Ltd, Suryodaya Capital and Finance (Bombay) Ltd with the company, 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.

F-19

SCHEDULES FORMING PART OF THE BALANCE SHEET SCHEDULE 7

2005 As at March 31, 2006 2007 (in Rs. Millions) 1,355.0 165.2 7,326.9 2,863.1 7,683.5 728.7 20,122.4 1,390.0 174.4 8,725.9 3,013.2 11,030.2 675.8 25,009.5 2007 (in U.S. $ Millions) 32.0 4.0 200.7 69.3 253.7 15.6 575.3

INVENTORIES (As valued and certified by the Management) (a) Stores and spare parts (at or below cost) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Consumable tools (at cost) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Raw materials and components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Work-in-progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Stock-in-trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (f) Goods-in-transit (at cost) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,423.5 180.5 6,300.6 2,644.6 5,332.9 131.5 16,013.6

Note: Items (c), (d) and (e) above are valued at lower of cost and net realisable value.

SCHEDULE 8
2005 As at March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S. $ Millions) 13.0 7.3 156.2 176.5 7.3 169.2 11.8 2.6 14.4 2.6 11.8 (1.1) 10.7 179.9

SUNDRY DEBTORS (a) Over six months : (unsecured) Considered good. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Considered doubtful . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Others (unsecured) Considered good . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less : Provision for doubtful debts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Considered doubtful . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less : Provision for doubtful instalments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unearned finance and service charges on lease receivable /hire purchase contracts . . . . . .

196.4 521.0 4,952.7 5,670.1 521.0 5,149.1 3,174.1 47.5 3,221.6 47.5 3,174.1 (337.4) 2,836.7 7,985.8

355.7 342.9 6,183.8 6,882.4 342.9 6,539.5 656.9 218.0 874.9 218.0 656.9 (30.4) 626.5 7,166.0

565.6 318.0 6,792.0 7,675.6 318.0 7,357.6 510.9 112.4 623.3 112.4 510.9 (46.7) 464.2 7,821.8

SCHEDULE 9
2005 As at March 31, 2006 2007 (in Rs. Millions) 68.0 27.6 2007 (in U.S. $ Millions) 0.6

CASH AND BANK BALANCES (a) Cash on hand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (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. 215.5 millions) and cheques on hand Rs. 1,387.6 millions (as at March 31, 2006 Rs. 1,268.8 millions as at March 31, 2005 Rs. 1,182.6 millions) and remittances in transit Rs. 2,349.8 millions (as at March 31, 2006 Rs.1,055.9 millions; as at March 31, 2005 Rs. 992.6 millions)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Short term deposits with Scheduled Banks [including in foreign currencies Rs. NIL (as at March 31, 2006 Rs. 4,407.2 millions, as at March 31, 2005 Rs. 11,795.8 millions)]* . . . . (d) Margin Money/Cash Colleteral with Scheduled Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13.0

3,439.6 15,841.9 755.9 20,050.4

3,208.6 5,089.0 2,828.7 11,194.3 4,407.2

5,330.2 1.8 2,908.0 8,267.6

122.7 * 66.9 190.2

* Includes unutilised proceeds from FCCN issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11,568.5

F-20

SCHEDULES FORMING PART OF THE BALANCE SHEET SCHEDULE 10

2005 As at March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S. $ Millions)

LOANS AND ADVANCES A) SECURED Vehicle loans [Note 1 below and [Note A(4) Schedule 14]]* Considered good . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Considered doubtful . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Provision for doubtful loans # . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . __________ * 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) . . . . . . . . . . . . . . . (b) Dues from subsidiary companies (Note 4 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Loans to associates and others (Note 5 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (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) . . . . . . . . . . . . . . . . . . . . . (e) Deposits with government, public bodies and others : (i) Balances with Customs, Port Trust, Excise, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (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 )] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (f) Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (g) Advance payments against taxes (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,581.3 268.3 14,849.6 268.3 14,581.3

44,233.0 1,105.5 45,338.5 1,105.5 44,233.0

42,474.1 1,689.5 44,163.6 1,689.5 42,474.1

977.1 38.9 1,016.0 38.9 977.1

3,006.8 94.1 5,096.6 815.5 651.5 398.0 248.2 600.6 10,911.3 25,492.6

4,942.0 66.9 455.1 1,403.5 1,143.3 810.4 484.4 2,795.2 12,100.8 56,333.8

6,657.6 892.5 490.4 4,028.6 1,237.1 1,167.4 500.9 2,811.3 17,785.8 60,259.9

153.1 20.5 11.3 92.7 28.5 26.9 11.5 64.7 409.2 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Maximum during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) Advances to suppliers, contractors and others are net of advances considered doubtful which have been provided for . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) Dues from subsidiary companies: (i) HV Axles Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) HV Transmissions Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iii) Telco Construction Equipment Company Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iv) Tata Daewoo Commercial Vehicle Co. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (v) Tata Motors European Technical Centre Plc, UK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (vi) TML Financial Services Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (vii) Tata Marcopolo Motors Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (viii) Tata Motors (Thailand) Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) Loans to associates, subsidiaries and others : (i) Hispano Carrocera, S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Tata Finance Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iii) Tata Motors European Technical Centre Plc, UK-(subsidiary) . . . . . . . . . . . . . . . . . . . . (6) Inter-corporate deposits with subsidiaries: (i) Sheba properties Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) HV Transmissions Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iii) Concorde Motors (India) Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iv) Tata Technologies Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (v) TAL Manufacturing Solutions Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (vi) Telco Construction Equipment Company Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (vii) TML Financial Services Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3.6 3.9 313.7 7.0 62.0 21.5 3.6 396.6 4,700.0 67.5 20.0 100.0 40.0 50.0

3.4 3.6 1,024.7 34.4 19.9 5.9 6.7 377.7 77.4 280.0 60.0 70.0 100.0

3.2 3.4 902.9 27.1 103.4 30.3 5.1 6.9 703.5 12.1 4.1 405.2 85.2 195.0 40.0 250.0 50.0 2,000.0

0.1 0.1 20.8 0.6 2.4 0.7 0.1 0.2 16.2 0.3 0.1 9.3 2.0 4.5 0.9 5.8 1.2 46.0

F-21

SCHEDULES FORMING PART OF THE BALANCE SHEET SCHEDULE 11

2005 As at March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S. $ Millions) 461.0 853.4 56.1

CURRENT LIABILITIES (a) Acceptances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Sundry creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Advance and progress payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Liability towards Investors Education and Protection Fund under Section 205C of the Companies Act, 1956 not due i) Unpaid dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii) 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv) Unclaimed matured debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v) Interest accrued on (iii) and (iv) above . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Interest/commitment charges accrued on loans but not due . . . . . . . . . . . . . . . . . . . . . . . . .

28,072.8 20,839.0 3,716.1

26,973.8 26,649.9 3,340.7

20,038.0 37,097.1 2,436.8

35.4 8.3 13.4 8.5 195.9 52,889.4

54.8 43.0 8.9 6.3 190.8 57,268.2 600.8

66.3 36.1 1.8 4.2 254.2 59,934.5 908.8

1.5 0.8 * 0.1 5.8 1,378.7 20.9

Notes:Sundry creditors include amounts payable to small scale industrial undertakings . . . .

467.5

SCHEDULE 12
2005 As at March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S. $ Millions) 133.0 22.6 58.7 99.6 313.9

PROVISIONS (a) Proposed dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Provision for tax on dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Provision for retirement and other employee benefit schemes [Note B (5) Schedule 14] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Other Provisions [Note B (6) Schedule 14] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,521.9 634.2 1,435.9 4,668.6 11,260.6

4,979.4 698.4 1,811.7 4,660.9 12,150.4

5,780.7 982.5 2,550.0 4,330.0 13,643.2

SCHEDULE 13
2005 As at March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S.$ Millions)

MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) Employee Separation Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

181.6 181.6

141.2 141.2

100.9 100.9

2.3 2.3

F-22

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 or when 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 export receivables 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 to the Companies Act, 1956 except in the case of: Leasehold Landamortised over the period of the lease Technical Know-howat 16.67% (SLM) Laptopsat 23.75% (SLM) Carsat 19% (SLM) Assets acquired prior to April 1, 1975on Written Down Value basis at rates specified in Schedule XIV to the Companies Act, 1956. Capital assets, the ownership of which does not vest in the Company, other than leased assets, are depreciated 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 estimated useful life, whichever is lower.

(ii) Assets given on lease as on March 31, 2000, acquired upon amalgamation of Tata Finance Ltd., are depreciated at rates specified in Schedule XIV to the Companies Act, 1956. The difference between the depreciation charge as computed using the Internal Rate of Return (IRR) implicit in the lease, to ensure capital recovery over the primary lease 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 over the revised remaining useful life. (c) Fixed Assets (i) Fixed Assets (except for a building acquired on amalgamation with Telco Dadajee Dhackjee Ltd which is at revalued figure) are stated at cost of acquisition or construction less accumulated depreciation / amortisation. All costs relating to the acquisition and installation of Fixed Assets are capitalised and include financing costs relating to borrowed funds attributable to construction or acquisition of Fixed Assets, upto the date the asset is ready for intended use, adjusted for charges on foreign exchange contracts and exchange rate differences relating to specific borrowings, where applicable, attributable to those fixed assets.

(ii) Product development costs incurred on new vehicle platforms, variants on existing platforms and new vehicle aggregates are recognised as Intangible Assets (included under Fixed Assets) and amortised over a period of thirty six months or on the basis of actual production to planned production volumes for thirty six months from commencement of commercial production. (iii) Software not exceeding Rs. 25,000 and product development costs relating to minor product enhancements, facelifts and 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 the present value of minimum lease payments. Lease payments are apportioned between the finance charge and the outstanding liability. The finance charge is allocated to periods during the lease term at a constant periodic rate of interest on the remaining balance of the liability. Assets given under finance leases, except for those stated in b(ii) above, are recognised as receivables at an amount equal to the net investment in the lease and the finance income is based on a constant rate of return on the outstanding net investment.

F-23

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. Foreign currency monetary assets and liabilities are translated at year end exchange rates. Exchange difference arising on settlement of transactions and translation of monetary items are recognised as income or expense in the year in which they arise, except in respect 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 or expense, except in respect of liabilities for the acquisition of fixed assets incurred prior to April 1, 2004, where such amortisation 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 using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible 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 plant given on lease, are accounted for by using the Internal Rate of Return method. Consequently, a constant rate of return on the net outstanding amount is accrued over the period of contract. The Company provides an allowance for hire purchase and loan receivables that are in arrears for more than 11 months, to the extent of an amount equivalent to the outstanding principal and amounts 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 net realisable value. Cost is ascertained on a moving weighted average / monthly moving weighted average basis. The cost of work-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 on termination of employment of an amount equivalent to 15 to 30 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company makes annual contributions to gratuity fund established as trust. The Company accounts for the liability for gratuity benefits payable in future based on an independent actuarial valuation. ii) Superannuation The Company has two superannuation plans, a defined benefit plan and a defined contribution plan. An eligible employee 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 the years of service and salary drawn. The monthly pension benefits after retirement range from 0.75% to 2% of the annual basic salary for each year of service. The Company accounts for the liability for superannuation benefits payable 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 been protected as at March 31, 2003. Employees covered by this plan are prospectively entitled to benefits computed on a basis 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 Company contributes up to 15% of the eligible employees salary to the trust every year. The Company recognizes such contributions 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 eligible employee at the time of death or permanent disablement, while in service, either as a result of an injury or as certified by the Companys Medical Board. The monthly payment to dependents of the deceased/disabled employee under the

F-24

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. The Company accounts for the liability for BKY benefits payable in future based on an independent actuarial valuation. iv) Post-retirement Medicare Scheme Under this scheme, employees get medical benefits subject to certain limits of amount, periods after retirement and types of benefits, depending on their grade and location at the time of retirement. Employees separated from the Company as part of Early Separation Scheme, on medical grounds or due to permanent disablement are also covered under the scheme. The liability for post-retirement medical scheme is based on an independent actuarial valuation. v) Provident fund The eligible employees of the Company are entitled to receive benefits under the provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees salary (currently 12% of employees salary). The contributions as specified under the law are paid to the provident fund and pension fund set up as irrevocable trust by the Company or to respective Regional Provident Fund Commissioner and the Central Provident Fund under the State Pension scheme. The Company is generally liable for annual contributions and any shortfall in the fund assets based on the government specified minimum rates of return or pension and recognises such contributions and shortfall, if any, as an expense in the year incurred. vi) Compensated absences The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits, for future encashment. The liability is provided based on the number 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 investments comprising 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 the provisions of the IncomeTax Act, 1961. Current tax includes Fringe benefit tax. Deferred tax is recognised, on timing differences, being the difference between taxable income and accounting 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 there is virtual certainty 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 adjusting against the Securities Premium Account (SPA). Any changes to this premium payable on account of conversion or exchange fluctuation 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 and passenger vehicles including financing of the vehicles sold by the Company. These, in the context of Accounting Standard 17 on Segment Reporting, issued by the Institute of Chartered Accountants of India, are considered to constitute one single primary 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 depending upon 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 of India becoming applicable in the financial year 2004-05, and debited to Securities Premium Account (SPA) as against the past practice of providing premium on a pro-rata basis and debiting to SPA. As a result, the debit to SPA is higher by Rs. 2,530.9 millions. Consequent to revision of Accounting Standard - AS 15 Employee Benefits, the Company has adopted the revised accounting standard effective April 1, 2006 . Pursuant to the adoption, an amount of Rs. 141.9 millions (net of tax Rs. 72.1 millions) have been adjusted to General Reserve during 2006-07 for difference as per revised AS 15 [Refer Note B (5), Schedule 14].

2.

F-25

SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT 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 DaimlerBenz AG in consideration of materials supplied to the Company in the financial year 1956-57, 300,000 Ordinary Shares allotted to the Shareholders of Investa Machine Tools and Engineering Company Limited in terms of 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 Amalgamation in the financial year 1970-71, 183,823 Ordinary Shares issued to the Shareholders of the erstwhile Noduron Founders Maharashtra Limited in terms of the merger 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 Financial Institutions 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 the financial 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 up Bonus 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 of equivalent 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 of 8,800 (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. 591.5 millions] ) and 919,297 (for 2005-06 : 6,264,476; for 2004-05 : Nil ) Ordinary Shares were allotted during the year, consequent to conversion of 12,015 (for 2005-06 : 81,875; for 2004-05 : Nil) 0% Foreign Currency Convertible Notes (FCCN) due 2009 aggregating 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 2008 and 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 in abeyance. (f) II. 2. Subsequent to the year ended March 31, 2007, 100 Zero coupon FCCN (due 2009) aggregating U.S.$ 0.10 Million (Rs. 4.1 millions), have been converted into 7,651 Ordinary Shares.

The entitlements to 49,989 Ordinary Shares are subject matter of various suits filed in the courts / forums by third parties for which final order is awaited and hence kept in abeyance. 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-Convertible Debentures (2007) are secured by a pari passu charge by way of equitable mortgage of immovable properties and fixed assets in 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 Companys residential flats at Mumbai, Pune and Jamshedpur and the Companys freehold land admeasuring 4245 sq. mtrs. approximately, situated at village MoujeNaupada in Thane District. (b) Loan from Technology Development Board has a specific charge on the Companys movable plant and machinery, machinery spares, tools and accessories and other movables, both present and future, save and except book debts and stocks pertaining to the Indica Car Plant at Chikali. (c) Loans from Housing Development Finance Corporation Limited were secured against pledge of the Companys investment in the Ordinary Shares of The Tata Iron and Steel Co. Ltd.

F-26

SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT 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 properties excluding 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 Companys residential flats at Mumbai, Pune and Jamshedpur and the Companys freehold land admeasuring 4245 sq. mtrs. approximately, situated at village MoujeNaupada 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 in 2009-10.

(g) Loans, Cash Credit Accounts and Buyers line of credit from Banks are secured by hypothecation of existing and future stocks of raw materials, stock in trade, stores, work in progress and book debts, except Hire Purchase book debts and outstanding amounts on vehicle loan contracts. (h) Loans and Overdraft Accounts from Banks are secured under Hire Purchase Agreements and by Promissory Notes in respect of future instalments receivable from hirers [Schedule 8 (c)] and outstanding amounts on vehicle loan contracts and hypothecation of vehicles. (ii) Terms of Redemption : Non Convertible Debentures (NCDs) 14.75% Non-Convertible Debentures (2008) Floating Rate Non-Convertible Debentures (2007) 13.50% Non-Convertible Debentures (2005) 3. (a) Major components of deferred tax arising on account of timing differences are: As at March 31, 2005 2006 2007 (in Rs. Millions) 2007 (in U.S. $ Millions) (149.4) (70.4) (1.8) (221.6) 15.5 2.5 22.0 0.6 40.6 (181.0) Redeemable on October 11, 2008 October 1, 2007 July 23, 2005 (At par) (At par) (At par)

Liabilities: Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Product Development Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Assets: Employee benefits / Expenses allowable on payment basis . . . . . . . . . . . . . . . . . . . . Employees Separation Schemes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision for Doubtful Debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net Deferred Tax Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5,929.2) (6,180.4) (6,495.8) (732.0) (1,479.4) (3,059.8) (18.5) (73.1) (78.7) (6,679.7) (7,732.9) (9,634.3) 418.1 183.3 371.8 53.7 1,026.9 500.5 145.4 783.2 78.4 1,507.5 672.6 108.8 958.0 26.6 1,766.0

(5,652.8) (6,225.4) (7,868.3)

(b)

Deferred Tax charge for the year 5,141.5 5,141.5 5,652.8 511.3 5,652.8 (848.9) 4,803.9 6,225.4 1,421.5 6,225.4 (129.3) 6,096.1 7,868.3 1,772.2 143.2 (3.0) 140.2 181.0 40.8

Opening Deferred Tax Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Add:Net deferred tax balances taken over upon merger of Tata Finance Ltd and Telco Dadajee Dhackjee Ltd (net of amount transferred to General Reserve) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Add:Net deferred tax asset created on difference in opening liability as per revised AS 15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Closing Deferred Tax Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred Tax charge for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-27

SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (Contd.) (A) Notes to Balance Sheet (contd.)
(c) a) b) c) Tax expense: Current Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fringe Benefit Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,638.2 511.3 4,149.5 4. 3,633.5 190.0 1,421.5 5,245.0 4,760.0 65.0 1,772.2 6,597.2 109.5 1.5 40.8 151.8

Future instalments receivable from Hirer / vehicle loans [Schedule 8 (c) and Schedule 10 (A)] includes Rs. 5,983.7 millions (as at March 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 have not 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 at March 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)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total gross investment in the leases for a period Not later than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Later than one year and not later than five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Present value of the minimum lease payments receivable . . . . . . . . . . . . . . . . . . . . . . . Present value of the minimum lease payments receivable for a period Not later than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Later than one year and not later than five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Unearned finance income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) The accumulated provision for the uncollectible minimum lease payments receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) A general description of significant leasing arrangements:- Finance lease and Hire purchase agreements: The Company has given own manufactured vehicles and machines and equipment on Hire Purchase / Lease. The contingent lease rentals is based 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Later than one year and not later than five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Lease payments recognised in the statement of profit and loss for the year . . . . . . . . . . . (c) A general description of the significant leasing arrangements:The Company has entered into operating lease arrangements for computers and data processing equipments from a vendor

3,221.6 2,076.4 1,145.2 2,884.2 1,834.5 1,049.7 337.4 47.5

874.9 453.9 421.0 844.5 432.5 412.0 30.4 218.0

623.3 376.2 247.1 576.6 349.6 227.0 46.7 112.4

14.4 8.7 5.7 13.2 8.0 5.2 1.1 2.6

76.1 3.7 102.2

6.1 0.6 81.6

32.0 90.9 29.4

0.7 2.1 0.7

F-28

SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (Contd.) (A) Notes to Balance Sheet (contd.) 6. i) Related party disclosures a) 1. Related Party and their relationship Subsidiaries
Tata Technologies Ltd TAL Manufacturing Solutions Ltd H V Axles Ltd H V Transmissions Ltd Sheba Properties Ltd Concorde Motors (India) Ltd Telco Construction Equipment Co. Ltd Tata Daewoo Commercial Vehicle Co. Ltd Tata Motors Insurance Services Ltd (formerly known as Concorde Motors Ltd.) Tata Motors European Technical Centre Plc (from September 1, 2005) TML Financial Services Ltd (from June 1, 2006) Tata Marcopolo Motors Ltd (from September 20, 2006) Tata Motors (Thailand) Ltd (from February 28, 2007) INCAT (Thailand) Ltd (formerly known as Tata Technologies Ltd, Thailand) (from October 10, 2005) Tata Technologies Pte Ltd, Singapore (from December 7, 2005) Tata Technologies Investments Pte.Ltd, Singapore (from December 7, 2005) Tata Technologies Sdn Bhd, Malaysia (from December 7, 2005) INCAT International Plc. INCAT Limited INCAT SAS INCAT GmbH INCAT Holdings B.V. Lemmerpoort B.V (formerly known as INCAT Engineering Solutions B.V.) INCAT K.K Tata Technologies iKS Inc (Formerly known as iKnowledge Solutions Inc.) CADPO Asia Pte. Ltd INCAT Systems Inc Integrated Systems Technologies de Mexico, S.A. de C.V. INCAT Solutions of Canada Inc INCAT Holdings Inc. Merged with INCAT Systems Inc. INCAT Financial Services Inc. w.e.f April 1, 2006 Tata Technologies Ltd. U.S.A Cedis Mechanical Engineering GmbH (from January 1, 2006)

from October 3, 2005

2.

Associates :
Tata AutoComp Systems Ltd Tata Cummins Ltd Tata Precision Industries Pte. Ltd Tata Engineering Services Pte. Ltd (Due to Common Key Management Personnnel) Tata Sons Ltd (Investing Party) 3. Key Management Personnnel Mr. Ravi Kant Mr. Praveen P Kadle Dr. V Sumantran (upto August 24, 2005) Hispano Carrocera, S. A (from March 16, 2005) TSR Darashaw Ltd Tata Securities Private Ltd Nita Company Ltd Niskalp Investments and Trading Co. Ltd (upto January 20, 2006)

F-29

SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (Contd.) (A) Notes to Balance Sheet (contd.) b) Transactions with the related parties
Key Management Personnel 45.7 37.5 39.3 2.8 3.0 3.2 Total (in Rs. Millions) 18,210.4 13,464.5 9,546.0 7,190.0 5,306.2 4,960.0 685.5 683.4 516.9 577.0 0.4 1.0 9,907.4 7,021.7 6,344.5 445.7 410.2 366.8 9,817.9 8,920.6 3,966.5 1,459.8 674.5 445.7 (251.5) 210.0 (211.5) 1,138.0 235.2 559.7 11.9 101.8 2,453.8 1,158.4 715.5 3,037.1 985.6 677.3 195.8 (in U.S. $ Millions) 418.9

Subsidiaries Purchase of goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 601.6 914.2 68.2 6,044.2 4,339.2 3,297.4 685.5 503.4 420.8 577.0 0.4 1.0 9,432.6 6,454.6 5,957.2 415.7 367.8 331.3 9,817.9 8,920.6 3,009.9 1,459.8 674.5 445.7 (927.5) (546.6) (244.3) 1,050.4 133.7 403.3 1,308.1 545.8 208.9 2,621.4 587.9 277.5 195.8

Associates 17,608.8 12,550.3 9,477.8 1,145.8 967.0 1,662.6 180.0 96.1 429.1 529.6 348.0 30.0 42.4 35.5 956.6 676.0 756.6 32.8 87.6 101.5 156.4 11.9 101.8 1,145.7 612.6 506.6 412.9 394.7 396.6

Sale of goods (inclusive of sales tax) . . . . . . . . . . . . . . . . .

165.4

Purchase of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . .

15.8

Sale of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13.3

Services received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

227.9

Services rendered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

10.3

Finance given (including loans and equity) . . . . . . . . . . . .

225.9

Finance taken (including loans and equity) . . . . . . . . . . . .

33.6

Interest / Dividend paid / (received) (net) . . . . . . . . . . . . .

(5.8)

Amount receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

26.2

Bills discounted (in respect of amount receivable) . . . . . .

Amount payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

56.4

Amount receivable (in respect of loans) . . . . . . . . . . . . . .

69.9

Amount payable (in respect of loans) . . . . . . . . . . . . . . . .

4.5

F-30

SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT 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, 2006 2007 2007 (in Rs. Millions) (in U.S. $ Millions) 9,471.6 10,537.0 14,935.6 343.6 2,002.8 2,659.0 61.2 3,106.5 4,039.4 5,663.6 130.3 998.8 925.8 1,044.4 24.0 398.6 501.2 685.5 15.8 96.1 180.0 0.2 398.0 9.2 0.9 179.0 4.1 0.1 0.1 3,026.1 3,100.5 4,413.0 101.5 1,746.9 1,788.2 2,468.4 56.8 1,044.4 1,233.4 1,280.1 29.4 120.1 117.2 119.3 2.7 124.5 123.1 124.0 2.9 69.8 81.2 86.7 2.0 2005 750.0 393.8 582.9 465.0 120.0 396.6 263.5 115.1 67.1 316.3 (180.0) (74.3) (67.5) (60.0) (39.9) (30.3) (11.7) (4.6) (8.0) (0.7) 2,020.0 928.8 4,114.2 325.0 105.0 230.0 991.4 (72.0) (91.6) (135.0) (120.0) (119.6) (30.3) (97.0) (42.9) 5,500.0 2,000.0 1,416.6 1,327.5 1,096.1 (288.0) (86.4) (315.0) (280.0) (184.7) (40.1) (49.6) (33.0) 126.5 46.0 32.6 30.5 25.2 (6.6) (2.0) (7.2) (6.4) (4.2) (0.9) (1.1) (0.8)

i) Purchase of goods ii) Sale of goods iii) Purchase of fixed assets iv) Sale of fixed assets

v) Receiving of services

vi) Rendering of services

Tata Cummins Ltd . . . . . . . . . . . . . . . . . . . . Tata AutoComp Systems Ltd . . . . . . . . . . . . Concorde Motors (India) Ltd . . . . . . . . . . . . Tata Cummins Ltd . . . . . . . . . . . . . . . . . . . . TAL Manufacturing Solutions Ltd . . . . . . . Hispano Carrocera, S. A . . . . . . . . . . . . . . . H V Axles Ltd . . . . . . . . . . . . . . . . . . . . . . . H V Transmissions Ltd . . . . . . . . . . . . . . . . Telco Construction Equipment Co. Ltd . . . . H V Axles Ltd . . . . . . . . . . . . . . . . . . . . . . . H V Transmissions Ltd . . . . . . . . . . . . . . . . Tata Technologies Ltd . . . . . . . . . . . . . . . . . H V Axles Ltd . . . . . . . . . . . . . . . . . . . . . . . H V Transmissions Ltd . . . . . . . . . . . . . . . . Telco Construction Equipment Co. Ltd . . . . TAL Manufacturing Solutions Ltd . . . . . . . Sheba Properties Ltd . . . . . . . . . . . . . . . . . . Tata Technologies Ltd . . . . . . . . . . . . . . . . . TML Financial Services Ltd . . . . . . . . . . . . TML Financial Services Ltd . . . . . . . . . . . . Sheba Properties Ltd . . . . . . . . . . . . . . . . . . Concorde Motors (India) Ltd . . . . . . . . . . . . TAL Manufacturing Solutions Ltd . . . . . . . Hispano Carrocera, S. A (from March 16, 2005) . . . . . . . . . . . . . . . . . . . . INCAT Systems Inc . . . . . . . . . . . . . . . . . . . Tata Technologies Ltd . . . . . . . . . . . . . . . . . Sheba Properties Ltd . . . . . . . . . . . . . . . . . . Concorde Motors (India) Ltd . . . . . . . . . . . . Telco Dadajee Dhackjee Ltd . . . . . . . . . . . . Tata Sons Ltd . . . . . . . . . . . . . . . . . . . . . . . . Tata Cummins Ltd . . . . . . . . . . . . . . . . . . . . Tata Sons Ltd . . . . . . . . . . . . . . . . . . . . . . . . H V Axles Ltd . . . . . . . . . . . . . . . . . . . . . . . H V Transmissions Ltd . . . . . . . . . . . . . . . . Telco Construction Equipment Co. Ltd . . . . Tata Technologies Ltd . . . . . . . . . . . . . . . . . Concorde Motors (India) Ltd . . . . . . . . . . . . Tata Technologies Ltd . . . . . . . . . . . . . . . . . Telco Construction Equipment Co. Ltd . . . . H V Transmissions Ltd . . . . . . . . . . . . . . . . Tata Sons Ltd . . . . . . . . . . . . . . . . . . . . . . . . INCAT Systems Inc . . . . . . . . . . . . . . . . . . . Niskalp Investments and Trading Co. Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sheba Properties Ltd . . . . . . . . . . . . . . . . . .

vii) Finance given (including loans and equity) Investment in Equity Investment in Equity Investment in Equity Investment in Equity Inter Corporate Deposit Inter Corporate Deposit Inter Corporate Deposit Inter Corporate Deposit Loan Loan viii) Finance taken (including loans and equity) Inter Corporate Deposit Inter Corporate Deposit Inter Corporate Deposit Inter Corporate Deposit ix) Interest / Dividend paid / (received) Dividend paid Dividend received Dividend received Dividend received Dividend received Dividend received Dividend received Dividend received Interest received Interest received Interest received Interest received Interest received Interest received Interest received

F-31

SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT 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
Maximum Amount Outstanding during the year ended March 31, (in Rs. Millions) Investment in shares of the Company No. of Shares Direct investment in shares of subsidiaries of the Company No. of Shares

Name of the Company

Outstanding As at March 31, (in Rs. Millions)

Outstanding As at March 31, (in U.S. $ Millions)

a) Subsidiaries H V Transmissions Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2007 2006 2005 2007 2006 2005 2007 2006 2005 2007 2006 2005 2007 2006 2005 2007 2006 2005 2007 2006 2005 2007 2006 2005 2007 2006 2005 2007 2006 2005 2007 2006 2005 2007 2006 2005 2007 2006 2005

40.0 20.0 195.0 280.0 67.5 40.0 50.0 70.0 50.0 100.0 250.0 60.0 100.0 85.2 77.4 2,000.0 405.2 377.7 396.6 893.5

0.9

140.0 90.0 200.0 931.2 482.3 246.5 350.0 250.0 4,152.4 70.0 100.0 827.3 100.0 500.0 300.0 250.0 100.0 100.0 160.0 30.0 85.2 77.4 2,000.0 100.0 405.2 396.6 396.6 964.8

683,461

250,000 250,000 250,000 85,110,000 85,318,400 150,000 2,000

Sheba Properties Ltd. [Note (i) below] . . . . . . . . . . . . . . . . .

4.5

Tata Technologies Ltd. [Note (ii) below] . . . . . . . . . . . . . . .

INCAT System Inc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TAL Manufacturing Solutions Ltd. . . . . . . . . . . . . . . . . . . .

1.2

Telco Construction Equipment Co. Ltd. . . . . . . . . . . . . . . . .

Concorde Motors (India) Ltd. . . . . . . . . . . . . . . . . . . . . . . . .

5.8

H V Axles Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tata Motors European Technical Centre Plc., UK . . . . . . . .

2.0

TML Financial Services Limited . . . . . . . . . . . . . . . . . . . . . (From June 1, 2006) b) Associates Tata International Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (upto February 28, 2005) Hispano Carrocera, S. A. . . . . . . . . . . . . . . . . . . . . . . . . . . . (from March 16, 2005) Niskalp Investments and Trading Co. Ltd . . . . . . . . . . . . . . (Net of provision of Rs. 59.7 millions) (upto January 20, 2006)

46.0

9.3

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 at March 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 determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

F-32

SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (Contd.) (A) Notes to Balance Sheet (contd.) 8. Claims against the Company not acknowledged as debts
2005 As at March 31, 2006 2007 (in Rs. Millions) 1,404.9 932.0 239.5 158.9 717.6 476.0 2,364.8 1,561.0 309.7 204.4 1,023.8 675.8 2007 (in U.S. $ Millions) 54.4 35.9 7.1 4.7 23.6 15.5

(i) Sales TaxGross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net of Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Excise DutyGross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net of Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iii) Others Gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net of Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iv) Income tax (exclusive of the effect of similar matters in respect of assessments remaining to be completed) in respect of matters: (a) Decided in Companys favour by Appellate authorities and for which Department is in further appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (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 . . . . . . . . . . . . . . . . . (c) Pending in appeal / other matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (v) The counter claim made by a party upon termination of distributorship arrangement by the Company - GBP NIL (As at March 31, 2006 and 2005 GBP 4.432 Millions) . . . . . . . . . . . 9. The claims / liabilities in respect of excise duty, sales tax and other matters where the issue were decided in favour of the Company for which the Department is in further appeal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,593.4 1,644.4 981.6 622.4 725.1 459.8

650.7 315.4 157.7 364.7

593.3 411.2 1,767.5 343.1

547.9 2,868.8 2,822.4

12.6 66.0 64.9

1,435.0

180.8

270.8

6.2

10. Estimated amount of contracts remaining to be executed on capital account and not provided for . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11. Other money for which the Company is contingently liable (i) In respect of bills discounted and export sales on deferred credit . . . . . . . . . . . . . . . . . . . . (ii) The Company has given guarantees for liability in respect of receivables assigned by way of securitization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iii) Cash Margins / Collateral [Schedule 9 (d)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iv) In respect of retained interest on securitisation transactions . . . . . . . . . . . . . . . . . . . . . . . (v) In respect of subordinate receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (vi) Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12. Uncalled liability on partly paid shares of Tata Motors (Thailand) Ltd. . . . . . . . . . . . . . . .

5,326.3

10,952.5

32,624.8

750.5

2,316.9 1.1 755.9 687.0 42.3

4,867.6 1,314.7 2,741.4 482.5 458.3 64.1

4,057.8 6,327.0 2,819.1 769.1 694.5 50.0 352.1

93.3 145.5 64.9 17.7 16.0 1.2 8.1

F-33

SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT 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, 2006 2007 2007 (in Rs. Millions) (in U.S. $ Millions) 3,082.4 4,615.5 5,589.1 128.6 3,609.9 5,297.2 8,600.6 197.8 74.7 402.3 9.3 2005 6,692.3 9,987.4 14,592.0 335.7

(i)

(a) Spare parts and accessories for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Bodies and trailers for mounting on chassis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Passenger cars 1,328 nos. (2005-06 : 209 nos.; 2004-05 : Nil) . . . . . . . . . . . . . . . .

(ii) Sales and Opening and Closing Stocks of vehicles and cars include chassis mounted with bodies / trailers and passenger cars. [Also refer Schedule 14 (E) and 15]

(2) The total expenditure incurred on Research and development :

(a) Expenditure charged to profit and loss account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Expenditure capitalised during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,284.5 2,648.9 3,933.4 1,322.1 3,439.1 4,761.2 1,601.3 6,367.3 7,968.6 36.8 146.5 183.3

2005 Auditors Remuneration (excluding Service Tax) : Audit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Audit Fees for financial statements as per US GAAP . . . . . . . . . . . . . . . . . . In other Capacities : Company Law Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corporate Governance certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Taxation Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iv) Other Services (Refer Note 1 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (v) Reimbursement of travelling and out-of-pocket expenses . . . . . . . . . . . . . . . (b) Cost Auditors Remuneration (excluding Service Tax): (i) Audit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Reimbursement of travelling and out-of-pocket expenses . . . . . . . . . . . . . . . (3) (a) (i) (ii) (iii)

Year Ended March 31, 2006 2007 ( in Rupees)

2007 (in U.S. $)

13,600,000* 20,000,000 21,000,000^ 5,000,000 35,000* 2,500,000* 250,000* 1,180,300 4,574,000 311,840* 800,000 32,254 35,000* 2,500,000* 250,000 135,000* 2,243,065 561,267* 800,000 28,100

22,500,000 517,598.3 14,500,000# 333,563.4 35,000 3,200,000 250,000 1,126,446 316,152* 800,000 29,500 805.2 73,614.0 5,751.1 25,913.2 7,272.9 18,403.5 678.6

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) 632.5 727.6 1,124.7 25.9 1,410.7 1,649.9 1,756.4 40.4 164.5 587.4 1,017.5 23.4 2,207.7 29.6 636.6 1,541.5 2,964.9 30.0 671.4 2,263.5 3,898.6 213.5 554.4 3,130.7 89.7 4.9 12.8 72.0

(a) On Debentures and fixed loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Discounting charges (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: (i) Transferred to Capital account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (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)] . . . . . . . . . . . . . . . . . . . . . . . . .

F-34

SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (Contd.) (B) Notes to Profit and Loss Account (contd.):
(5) Defined benefit plans / Long term compensated absencesAs per actuarial valuations as on March 31, 2007 (Refer F-36 for US $ Millions equivalents)
Postretirement Super- Compensated Medicare Gratuity annuation absences scheme (in Rs. Millions)
i Components of employer expense Current Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actuarial Losses/(Gains) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total expense / (income) recognised in the Statement of Profit & Loss Account in . . . . ii iii Schedule B under item : Actual Contribution and Benefit Payments for year ended March 31, 2007 Actual benefit payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actual Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net asset/(liability) recognised in balance sheet as at March 31, 2007 Present Value of Defined Benefit Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net asset/(liability) recognised in balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change in Defined Benefit Obligations (DBO) during the year ended March 31, 2007 Present Value of DBO at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actuarial (gains)/ losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Present Value of DBO at the end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change in Fair Value of Assets during the year ended March 31, 2007 Plan assets at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actual Company contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114.6 177.6 (205.9) 651.3 737.6 (4)(b) 325.4 788.6 3,099.8 3,111.1 11.3 2,382.1 114.6 177.6 750.9 (325.4) 3,099.8 2,342.4 305.5 788.6 (325.4) 3,111.1 8.5% 8.0% 5%-7.5% N/A 51% 49% 37.5 73.5 (48.2) (30.1) 32.7 (4)(b) 224.4 182.9 948.8 561.0 (387.8) 1,161.8 37.5 73.5 (99.6) (224.4) 948.8 623.8 (21.3) 182.9 (224.4) 561.0 8.0% 8.0% N/A N/A 72% 28% 104.2 59.6 314.8 478.6 (4)(a) 177.2 N/A 1,235.9 (1,235.9) 934.5 104.2 59.6 314.8 (177.2) 1,235.9 N/A N/A N/A N/A N/A 8.5% N/A 5%-7.5% N/A N/A N/A 21.5 27.3 140.0 188.8 (4)(c) 36.6 N/A 511.4 (511.4) 359.2 21.5 27.3 140.0 (36.6) 511.4 N/A N/A N/A N/A N/A 8.5% N/A N/A 4.0% N/A N/A 11.9 23.3 42.3 77.5 (4)(c) 32.8 N/A 352.8 (352.8) 308.1 11.9 23.3 42.3 (32.8) 352.8 N/A N/A N/A N/A N/A 8.5% N/A 5%-7.5% N/A N/A N/A

BKY

iv

Plan assets at the end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actuarial Assumptions Discount Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expected Return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Salary escalation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Medical cost inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii The major categories of plan assets as percentage of total plan assets Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Balances with banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

viii Effect of one percentage point change in assumed Medical inflation rate Revised DBO as at March 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Revised service cost for 2006-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Revised interest cost for 2006-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a) Defined Contribution Plans

One percentage point increase in Medical inflation rate 563.9 23.8 30.1

One percentage point decrease in Medical inflation rate 465.5 19.6 24.8

b) c) d)

The Companys contribution to defined contribution plan aggregated Rs.1,005.8 millions for the year ended March 31, 2007 has been recognised in the statement of Profit and Loss Account under item 4 (b) in Schedule 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. 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. 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 per revised AS15 : Gross
Gratuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Superannuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BKY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ex Gratia on retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tax

Net

(in Rs. Millions) 39.7 (13.4) 26.3 (65.8) 22.2 (43.6) (209.8) 70.6 (139.2) 449.9 (151.5) 298.4
214.0 (72.1) 141.9

F-35

SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (Contd.) (B) Notes to Profit and Loss Account (contd.): (5) Defined benefit plans / Long term compensated absencesAs per actuarial valuations as on March 31, 2007
Superannuation Compensated absences (in US $ Millions) 2.4 1.4 7.2 11.0 (4)(a) Postretirement Medicare scheme

Gratuity i Components of employer expense Current Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actuarial Losses/(Gains) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total expense / (income) recognised in the Statement of Profit & Loss Account in . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii Schedule B under item: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actual Contribution and Benefit Payments for year ended March 31, 2007 Actual benefit payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actual Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net asset/(liability) recognised in balance sheet as at March 31, 2007 Present Value of Defined Benefit Obligation . . . . . . . . . . . . . . . . . . . Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net asset/(liability) recognised in balance sheet . . . . . . . . . . . . . . . Change in Defined Benefit Obligations (DBO) during the year ended March 31, 2007 Present Value of DBO at beginning of year . . . . . . . . . . . . . . . . . . . . Current Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actuarial (gains)/ losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Present Value of DBO at the end of year . . . . . . . . . . . . . . . . . . . . Change in Fair Value of Assets during the year ended March 31, 2007 Plan assets at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actual Company contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

BKY

2.6 4.1 (4.7) 15.0 17.0 (4)(b)

0.9 1.7 (1.1) (0.7) 0.8 (4)(b)

0.5 0.6 3.2 4.3 (4)(c)

0.3 0.5 1.0 1.8 (4)(c)

7.5 18.1

5.2 4.2

4.1 N/A

0.8 N/A

0.8 N/A

iii

71.3 71.6 0.3

21.8 12.9 (8.9)

28.4 (28.4)

11.8 (11.8)

8.1 (8.1)

iv

54.8 2.6 4.1 17.3 (7.5) 71.3

26.7 0.9 1.7 (2.3) (5.2) 21.8

21.5 2.4 1.4 7.2 (4.1) 28.4

8.3 0.5 0.6 3.2 (0.8) 11.8

7.1 0.3 0.5 1.0 (0.8) 8.1

53.9 7.0 18.1 (7.5) 71.5 8.5% 8.0% 5%-7.5% N/A

14.4 (0.5) 4.2 (5.2) 12.9 8.0% 8.0% N/A N/A

N/A N/A N/A N/A N/A 8.5% N/A 5%-7.5% N/A

N/A N/A N/A N/A N/A 8.5% N/A N/A 4.0%

N/A N/A N/A N/A N/A 8.5% N/A 5%-7.5% N/A

Plan assets at the end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actuarial Assumptions Discount Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expected Return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Salary escalation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Medical cost inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii The major categories of plan assets as percentage of total plan assets Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Balances with banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi viii Effect of one percentage point change in assumed Medical inflation rate Revised DBO as at March 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . Revised service cost for 2006-2007 . . . . . . . . . . . . . . . . . . . . . . . . . . Revised interest cost for 2006-2007 . . . . . . . . . . . . . . . . . . . . . . . . . .

51% 49%

72% 28%

N/A N/A

N/A N/A

N/A N/A

One percentage point increase in Medical inflation rate 13.0 0.5 0.7

One percentage point decrease in Medical inflation rate 10.7 0.5 0.6

F-36

SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (Contd.) (B) Notes to Profit and Loss Account (contd.): a) Defined Contribution Plans The Companys contribution to defined contribution plan aggregated US $ 23.1 millions for the year ended March 31, 2007 has been recognised in the statement of Profit and Loss Account under item 4 (b) in Schedule B. b) c) d) 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. 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. 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 per revised AS 15 :
Gross Tax Net (in US $ Millions) 0.9 (0.3) 0.6 (1.5) 0.5 (1.0) (4.8) 1.6 (3.2) 10.3 (3.5) 6.8 4.90 (1.70) 3.2

Gratuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Superannuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BKY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ex Gratia on retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) Other Provisions include [Schedule 12 (d)]:

2005 Year Ended March 31, 2006 2007 2007 (in Rs. Millions) (in U.S. $ Millions) 1,582.6 1,238.6 (1,446.3) 1,374.9 1,374.9 1,775.0 (1,662.4) 1,487.5 31.6 40.8 (38.2) 34.2

a)

Product warranty : Opening Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Add:- Provision for the year (net) (including additional provision for earlier years) . . . . . . . . . . . . . Less: Payments/ debits (net of recoveries from suppliers) . . . . . . . . . . . Closing Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The provision is expected to be utilised for settlement of warranty claims within a period of 2 to 3 years. Premium on redemption of Foreign Currency Convertible Notes (FCCN) : [Note (C)(i)]: Opening Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Add:- Provisions for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Add /(Less) : Foreign currency exchange difference . . . . . . . . . . . . . . . Less : Reversal due to conversion of FCCN . . . . . . . . . . . . . . . . . . . . . . Closing Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,428.7 1,460.4 (1,306.5) 1,582.6

b)

15.3 2,920.7 2,936.0

2,936.0 58.7 (12.7) 2,982.0

2,982.0 (70.0) (69.5) 2,842.5

68.6 (1.6) (1.6) 65.4

F-37

SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (Contd.) (B) Notes to Profit and Loss Account (contd.): (7) Earnings Per Share:
2005 (a) Profit after tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) The weighted average number of Ordinary Share for Basic EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) The nominal value per Ordinary Share . . . . . . . . . . (d) Earnings Per Share (Basic) . . . . . . . . . . . . . . . . . . . (e) Profit after tax for Basic EPS . . . . . . . . . . . . . . . . . Add: Interest payable on outstanding Foreign Currency Convertible Notes . . . . . . . . . . . . . . . . . . . . . . . . . . (f) Profit after tax for Diluted EPS . . . . . . . . . . . . . . . . (g) The weighted average number of Ordinary Shares for Basic EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (h) Add: Adjustment for Options relating to warrants, fractional coupons and Foreign Currency Convertible Notes . . . . . . . . . . . . . . . . . . . . . . . . . . (j) The weighted average number of Ordinary Share for Diluted EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . (k) Earnings Per Share (Diluted) . . . . . . . . . . . . . . . . . . Rs. Millions Nos. Rupees Rupees Rs. Millions 12,369.5 359,837,353 10 34.38 12,369.5 Year Ended March 31, 2006 2007 15,288.8 376,804,863 10 40.57 15,288.8 19,134.6 384,544,205 10 49.76 19,134.6 2007 US $ Millions 440.2

US $ 1.14 US $ Millions 440.2

Rs. Millions Rs. Millions Nos.

90.5 12,460.0 359,837,353

101.8 15,390.6 376,804,863

99.4 19,234.0 384,544,205

US $ Millions 2.3 US $ Millions 442.5

Nos. Nos. Rupees

26,719,121 386,556,474 32.23

26,042,196 402,847,059 38.20

22,622,790 407,166,995 47.24

US $ 1.09

F-38

SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT 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 Issued on Issue Amount (in INR at the time of the issue) Face Value Conversion Price per share at fixed exchange rate Exercise Period 1% FCCN (due 2008) July 31, 2003 US $100 million (Rs.4,615.6 millions) US $1000 Rs.250.745 US $1 = Rs.46.16 after September 11, 2003 and upto July 1, 2008 0% FCCN (due 2009) April 27, 2004 US $100 million (Rs.4,385.0 millions) US $1000 Rs.573.106 US $1 = Rs.43.85 June 7, 2004 to March 28, 2009 on or after April 27, 2005 (in whole but not in part) 1% FCCN (due 2011) April 27, 2004 US $300 million (Rs.13,155.0 millions) US $1,000 Rs.780.400 US $1 = Rs.43.85 June 7, 2004 to March 28, 2011 0% FCCN (due 2011) March 20, 2006 JP 11,760 million (Rs.4,500.3 millions) JP 10,000,000 Rs.1,001.39 Rs.1 = JP 2.66 May 2, 2006 to February 19, 2011 i) after March 20, 2009 but prior to February 8, 2011 (in whole or in part) subject to certain conditions or ii) any time (in whole but not in part) in the event of certain changes affecting taxation in India March 21, 2011 99.253% Nil Nil 1,176

Early redemption at the option of the Company subject to certain conditions

on or after July 31, 2006

Not Applicable

Redeemable on Redemption percentage of the Principal Amount Amount converted Aggregate conversion into Shares / ADRs Notes Outstanding as at March 31, 2007 Aggregate amount of shares that could be issued on conversion of outstanding notes

July 31, 2008 116.824% US $99.94 million (Rs.4,520.9 millions) 18,398,095 60

April 27, 2009 95.111% US $93.89 million (Rs.4,189.0 millions) 7,183,773 6,110

April 27, 2011 121.781% Nil Nil 300,000

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, of Honble High Court of Judicature at Mumbai, Tata Finance Ltd. (TFL) whose core business was providing finance for commercial vehicles, passenger cars and construction equipments was amalgamated 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 into 410,000,000 Ordinary Shares of Rs. 10 each. (b) the assets, liabilities, rights and obligations of TFL were vested in the Company with effect from April 1, 2005 and were recorded at their respective carrying values under the pooling F-39

SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (Contd.) (C) Other Notes (contd.) of interest method of accounting for amalgamation after making adjustments to ensure uniform set of 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 the holders of 181,311,857 Equity Shares of TFL, in the ratio of 8 Shares of the Company of Rs.10 each 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 was transferred to General Reserves and an amount of Rs.204.7 millions (net of deferred tax) was adjusted to the General Reserves to ensure uniform set of accounting policies, in respect of some of the items of TFL. (e) the reserves of TFL were incorporated in the Companys 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 the investments of the Company in the said Capital.

(g) the difference of Rs.1853.0 millions between the amounts recorded as Equity Share Capital to be issued to TFL shareholders and the amount of the Equity Share Capital of TFL was credited to the General Reserve of the Company. (h) Arrears of dividend on cumulative preference shares of TFL was provided from the brought forward profits of the Company. (iii) In terms of the Scheme of Amalgamation (Scheme) sanctioned by order dated June 29, 2005, of Honble High 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 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 the Company with effect from April 1, 2005 and were recorded at their respective carrying values under the pooling of interest method of accounting for amalgamation after making adjustments to ensure uniform set of accounting policies as stated in (b) below. the credit balance of Rs. 6.6 millions remaining in the Profit and Loss Accounts of TDDL and the debit balance of Rs. 0.1 million of SCFL was transferred to General Reserve of the Company and an amount of Rs. 0.8 million was adjusted to the General Reserves to ensure uniform set of accounting policies, in respect of some of the items of TDDL. the paid up share capital of TDDL and SCFL of Rs. 6.5 millions and Rs. 0.5 million respectively was adjusted against the cost of investment of the Company in the equity share capital of TDDL and SCFL respectively, and the balance cost of investment of Rs. 446.1 millions and Rs. 7.7 millions of the Company in the equity share capital of TDDL and SCFL respectively, were adjusted against the reserves of the Company as under : Securities Premium Rs. 115.6 millions (TDDL) General Reserves Rs. 338.2 millions F-40

(b)

(c)

SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT 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 millions and the Revaluation Reserve of Rs. 268.2 millions were recorded in the Companys books in the same form. (iv) In the year 2005-06, the Company diluted its shareholding in its subsidiary Telco Construction Equipment Company Ltd (TELCON) from 79.75% to 59.75%. As a result of this transaction, the Company 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. 23.4 Millions. Additionally, the Company has given a unsecured loan of Euro 7 million (Rs. 396.6 Millions). (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. $1 = Rs. 43.47 being the average of the T.T (telegraphic transfer) buying and selling rates as on March 30, 2007 as quoted by the State Bank of India. (viii) The figures disclosed in the non-consolidated Financial Statements are extracted from the audited financial statements for the years ended March 31, 2005, March 31, 2006 and March 31, 2007, approved by the Board of Directors on May 17, 2005, May 19, 2006 and May 18, 2007 respectively, and on which auditor viz. Messrs Deloitte Haskins & Sells ( joint auditors Messrs A.F.Ferguson & Co. and Messrs S. B. Billimoria for the year ended March 31, 2005) have issued their opinion dated May 17, 2005, May 19, 2006 and May 18, 2007 respectively. Any event subsequent to the said dates has not been considered/ adjusted. (ix) The financial results for the years ended March 31, 2006 and March 31, 2007, include the results of the operations of erstwhile TFL, TDDL and SCFL. The comparative figures for the year ended March 31, 2005, do not include the results of the operations of TFL, TDDL and SCFL, and as such, the financial results for the years ended March 31, 2006 and March 31, 2007, are not comparable to this extent. (x) Figures in the Notes / Schedules to the Financial Statements pertain to 2006-07 unless otherwise stated / indicated. (xi)*under column in U.S.$ Millions represents amount less than U.S.$ 50,000/-

F-41

SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (Contd.) (D) Derivative transactions The Company uses forward exchange contracts, principal only swaps, interest rates swaps, currency swaps and currency options to hedge its exposure in foreign currency and interest rates. The information on derivative instruments is as follows : a) Derivative Instruments outstanding as at March 31, 2007 and March 31, 2006
Amount (Foreign Currency in Millions) 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 US$ 239.90 US$ 160.08 6.77 1.60 US$ 2.00 US$ 10.27 US$ 10.27 US$ 5.00 638.11 US$ 25.00 US$ 25.00 INR 1,250.00 US$ 96.49 US$ 27.50 US$ 84.50 35.00 13.00 US$ 9.50 Buy/Sell Sold Sold Sold Bought Bought Bought Bought Bought Sold To Sell To Sell To Sell Hybrid Bought Hybrid Amount (Rs in Millions) 10,433.1 7,142.3 391.8 86.4 87.0 446.8 458.7 223.1 241.8 1,087.3 1,115.4 1,250.0 4,196.5 1,196.0 3,770.1 2,026.2 701.5 413.2

Currency i) Forward exchange contracts (net) US$ / INR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EUR / US$ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . US$ / JPY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii) Principal only swaps (net) US$ / INR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

iii) Currency swaps US$ / JPY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . JPY / INR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv) Interest swaps (notional principal) US$ Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . INR Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v) Options (net) US$ / JPY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . US$ / INR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EUR / US$ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . US$ / CHF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

b)

Foreign exchange currency exposures not covered by derivative instruments as at March 31, 2007 and March 31, 2006
Amount (Foreign Currency in Millions) i) Amount receivable on account of Sales of Goods, loan and interest charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 US$ 1.10 US$ 2.54 7.62 10.93 1.46 2.17 US$ 702.41 US$ 355.14 21.35 1.94 0.73 129.97 141.32 Others Others Amount (Rs in Millions) 47.9 113.4 441.0 589.6 124.5 168.0 30,547.8 15,845.5 1,235.9 165.1 56.5 47.8 53.2 28.3 17.5 Amount (in U.S. $ Millions) 1.1 10.1 2.9 702.7 28.4 3.8 1.1 0.7

ii)

Creditors payable on account of Loan and Interest charges and other foreign currency expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c)

Figures for the year 2004-05 in (a) & (b) above have not been disclosed as the provisions of the Announcement issued by the Institute of Chartered Accountants of India were not applicable in the year 2004-05. F-42

SCHEDULE FORMING PART OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (Contd.) (E) Information in regard to opening stock and closing stock :
2005 Quantity Value in Nos. Rs. Millions (a) Opening Stock Light, medium and heavy commercial vehicles, jeep type vehicles, passenger cars, utility vehicles etc. and bodies thereon . . . . . . . . . . . . . . . . . . . . . . . . . . Manufactured and purchased components for sale : Spare Parts for Vehicles . . . . . . . . . . . . Scrap . . . . . . . . . . . . . . . . . . . . . . . . . . . Year Ended March 31, 2006 2007 Quantity Value in Quantity Value in Nos. Rs. Millions Nos. Rs. Millions 2007 (in U.S. $ Millions)

9,107

3,581.0

10,028

4,066.2

11,874

6,181.4

142.2

1,093.0 78.9 4,752.9

1,177.9 88.8 5,332.9

1,395.6 106.5 7,683.5

32.1 2.5 176.8

(b) Closing Stock Light, medium and heavy commercial vehicles, jeep type vehicles, passenger cars, utility vehicles etc. and bodies thereon . . . . . . . . . . . . . . . . . . . . . . . . . . Manufactured and purchased components for sale : Spare Parts for Vehicles . . . . . . . . . . . . Scrap . . . . . . . . . . . . . . . . . . . . . . . . . . .

10,028*

4,066.2

11,874*

6,181.4

17,093*

8,888.8

204.5

1,177.9 88.8 5,332.9

1,395.6 106.5 7,683.5

2,048.9 92.5 11,030.2

47.1 2.1 253.7

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).

F-43

SCHEDULE FORMING PART OF THE PROFIT AND LOSS ACCOUNT SCHEDULE 15 Information in regard to Sales effected by the Company (excluding inter-divisional transfers, settlements for damaged goods and goods capitalised) :
2005 Quantity Value in Nos. Rs. Millions 1. Light, medium and heavy commercial vehicles, jeep type vehicles, passenger cars, utility vehicles etc. and bodies thereon . . . . . . . . . . . . . . . . . . . . . . . . . Spare Parts for Vehicles . . . . . . . . . . . Export incentives . . . . . . . . . . . . . . . . . Diesel Engines . . . . . . . . . . . . . . . . . . . Scrap . . . . . . . . . . . . . . . . . . . . . . . . . . Castings and Forgings . . . . . . . . . . . . . Income from Services . . . . . . . . . . . . . Year Ended March 31, 2006 2007 Quantity Value in Quantity Value in Nos. Rs. Millions Nos. Rs. Millions 2007 (in U.S. $ Millions)

399,566

2. 3. 4. 5. 6. 7.

5,623

190,626.9 7,576.1 653.9 523.1 900.1 1,590.0 304.1 202,174.2

454,129

7,077

218,215.3 9,427.0 1,986.5 664.9 1,003.6 2,621.8 475.0 234,394.1

580,280

8,587

292,110.4 12,201.0 589.7 698.9 1,112.9 2,841.4 440.0 309,994.3

6,719.8 280.7 13.6 16.1 25.6 65.4 10.1 7,131.3

F-44

SCHEDULE FORMING PART OF THE PROFIT AND LOSS ACCOUNT SCHEDULE 16 Quantitative information in regard to installed capacity and the goods manufactured by the Company :
Unit of measurement 1. On road automobiles having four or more wheels such as light, medium and heavy commercial vehicles, jeep type vehicles and passenger cars covered under Sub-heading (5) of Heading (7) of First Schedule (Jamshedpur Works) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Motor Vehicles for transport of ten or more persons including the driver, motor cars and other motor vehicles for transport of persons, motor vehicles for transport of goods, chassis fitted with engine for motor vehicles (Pune Works) Licensed Capacity : 400,000 Nos . . . . . Motor Vehicles for transport of ten or more persons including the driver, motor cars and other motor vehicles for transport of persons, motor vehicles for transport of goods, chassis fitted with engine for motor vehicles (Lucknow Works) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Diesel Engines for Industrial and Marine applications . . . . . . . . . . . . . Nos. Year ending March 31, 2007 2006 2005 2007 2006 2005 2007 2006 2005 2007 2006 2005 2007 2006 2005 2007 2006 2005 2007 2006 2005 2007 2006 2005 2007 12,000 12,000 11,000 3,600 3,600 3,600 192282000 192282000 ( ) Installed capacity* 96,000 66,000 60,000 556,000 439,500 424,500 30,000 30,000 30,000 *** *** *** Actual production** 98,227 69,891 71,023 458,324 366,468 311,269 28,235 19,963 18,649 8,498 7,141 5,667 14,505 13,102 12,615 34407625 32719092 ( ) 4,449.1 4,060.4 2,604.6 102.3

2.

Nos.

3.

Nos.

4.

Nos.

5.

S. G. Iron Castings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tonnes

6.

S. G. / Grey Iron Semis by continuous casting process . . . . . . . . . . . .

Tonnes

7.

Power Generation (windmills on amalgamation of Tata Finance Ltd.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Manufactured Components for Sale **** . . . . . . . . . . . . . . . . . . . . . .

KW

8.

Rupees Millions

US $Millions * ** *** ****

On double shift basis including capacity for manufacture of replacement parts as certified by the management and relied upon by the Auditors. 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 no production during the year: a) b) c) d) Rotary position encoder and readout, electronic comparator, electronic weighing instruments, crane-weighing instruments and test rig equipment. Special Purpose Motor Vehicle, other than those principally designed for the transport of persons or goods. Truck and Bus Bodies. 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 bridging equipment, mine protected vehicles, etc. Certain types of electric equipment such as printed circuit motors, spot welding guns, in-process gauging, linear poistion encoder and readout, proximity switch, numerical control machine tools, solid state controllers for machine tools, Hoists and LDTV,vertical bar display, analogue timer, digital counter / timer.

e)

F-45

SCHEDULE FORMING PART OF THE PROFIT AND LOSS ACCOUNT SCHEDULE 17 Information regarding exports and imports and other matters :
2005 Year ended March 31, 2006 2007 (in Rs. Millions) 2007 (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 exchange differences (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 II of Schedule VI covers only such items as consumed directly in production.

F-46

SCHEDULES FORMING PART OF THE PROFIT AND LOSS ACCOUNT SCHEDULE 17 (Contd.)
2005 Year Ended March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S. $ Millions)

4. Expenditure in foreign currency (subject to deduction of tax where applicable) : (i) Technical Know-how fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Interest (including interest on convertible debentures held by nonresidents and payments in Rupees to financial institutions on foreign currency loans) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iii) Commission on Exports (paid through Export House) . . . . . . . . . . . (iv) Consultancy/Professional charges . . . . . . . . . . . . . . . . . . . . . . . . . . . (v) Payments on Other Accounts [including Exchange differences (net)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Remittances in foreign currencies for dividends: The Company does not have complete information as to the extent to which remittances in foreign currencies on account of dividends have been made by or on behalf of non-resident shareholders. The particulars of dividends declared during the year and payable to non- resident shareholders for the years 2005-06, 2004-05 and 2003-04 are as under: (i) Number of non-resident shareholders a) For 2005-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) For 2004-05 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) For 2003-04 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Number of shares held by them a) For 2005-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) For 2004-05 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) For 2003-04 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iii) Gross amount of dividend a) For 2005-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) For 2004-05 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) For 2003-04 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

768.9

915.6

1,888.8

43.5

450.2 158.2 309.9 1,025.4

591.9 65.7 281.8 891.5

886.0 640.7 1,811.8

20.4 14.7 41.7

Nos. Nos. Nos. Nos. Nos. Nos.

5,004 131,002,712 5,240.0

5,093 140,562,391 1,757.0

5,288 151,792,702 1,973.3

SCHEDULE 18 Information in regard to raw materials and components consumed :

Year Ended March 31, Unit of Measurement 2005 Value in Quantity Rs. Millions 137,562 4,386.5 750 39.2 2,238 1,711 78,735 4,075 11,189 3,516,894 68,011 242.4 100.0 1,245.6 2006 Value in Quantity Rs. Millions 164,284 5,815.0 730 47.5 2,306 1,626 79,463 4,390 14,366 3,700,687 61,643 272.5 100.5 1,205.9 2007 Value in (in U.S. $ Rs. Millions Millions) 6,610.5 152.1 8.6 0.2 429.5 119.6 1,471.1 9.9 2.8 33.8

Steel . . . . . . . . . . . . . . . . . . . Steel Tubes . . . . . . . . . . . . . . Non-ferrous alloys/metals . . . . . . . . . . . Ferro Alloys . . . . . . . . . . . . . Steel Melting Scrap . . . . . . . Paints, Oils and Lubricants . . . . . . . . . . . . . Tyres, Tubes and Flaps . . . . . Engines . . . . . . . . . . . . . . . . . Other components . . . . . . . . .

Tonnes Tonnes Tonnes Tonnes Tonnes Tonnes Kilo liters Nos. Nos.

Quantity 216,083 112 2,658 1,862 97,608 8,827 14,769 4,610,652 84,472

1,561.0 7,467.8 8,014.0 89,546.0 112,602.5

1,749.0 8,412.0 8,658.4 106,390.4 132,651.2

2,183.3 13,597.0 11,790.1 142,947.6 179,157.3

50.2 312.8 271.2 3,288.4 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.

F-47

AUDITORS REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS To The Board of Directors Tata Motors Limited 1. We have examined the Consolidated Balance Sheets of Tata Motors Limited (the Company), and its subsidiaries (the Company and its subsidiaries constitute the Group) as at March 31, 2005, 2006 and 2007 and also the Consolidated Profit and Loss Account and Consolidated Cash Flow Statement for the years ended on these dates and the accompanying notes and schedules (together comprising the Consolidated Financial Statements) all expressed in Indian Rupees, as set out in the accompanying Memorandum on pages F-50 to F-91. These Consolidated Financial Statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these Consolidated Financial Statements based on our audit. The figures disclosed in the Consolidated Financial Statements are extracted from the audited Indian Consolidated Accounts, regrouped where necessary, and our opinion stated herein is as stated in the opinion for each of the years [note (C) 8 on Schedule 14]. The Indian Consolidated Accounts for the years ended March 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 in accordance with auditing standards generally accepted in India. Those standards require that the audit be planned and performed to obtain reasonable assurance about whether the Financial Statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Financial Statements. An audit also includes assessing the accounting principles used and significant estimates made by the Management. The audit provides a reasonable basis for the opinion. (a) We did not audit the financial statements of certain subsidiaries, whose financial statements reflect total 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, 2007 amounting to Rs. 31,477.1 Millions (March 31, 2006 Rs. 3,657.1 Millions) and of certain associates whose financial statements reflect the Groups share of profit (net) of Rs. 463.3 Millions for the year ended March 31, 2007 (March 31, 2006 Rs.312.1 Millions) and Groups share of profit (net) of Rs. 547.8 Millions up to March 31, 2007 (March 31, 2006 Rs. 388.7 Millions). These financial statements and other financial information have been audited by other auditors whose reports have been furnished to us by the Management of the Group, and our opinion is based solely on the reports of the other auditors. Further, the Erstwhile Auditors did not audit the financial statements of certain subsidiaries, whose financial statements reflect total assets (net) of Rs. 8,480.5 Millions as at March 31, 2005, and total revenue for the year ended March 31, 2005 of Rs. 15,496.0 Millions, and net cash flows from operating activities amounting to Rs. 56.1 Millions, and of the associates which reflect the Groups share of loss (net) of Rs. 1.9 Millions for the year ended March 31, 2005 and up to March 31, 2005 Groups share of loss (net) Rs. Nil. These financial statements and other financial information have been audited by the other auditors whose reports have been furnished to the Erstwhile Auditors by the Management of the Group, and the Erstwhile Auditors opinion, is based solely on the reports of the other auditors. As stated in note (B) (6) on the Schedule 14 as the audited financial statements of associates, whose financial statements reflect the Groups share of loss (net) for the year ended March 31, 2007 of Rs. 69.1 Millions (for March 31, 2006 profits (net) of Rs. 127.2 Millions and for March 31, 2005 profits (net) of Rs. 206.7 Millions), and up to March 31, 2007 Groups share of loss (net) of Rs. 17.1 Millions (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 unaudited financial statements as provided by the management of those components for the purpose of our examination of the Consolidated Financial Statements. F-48

2.

3.

(b)

(c)

4.

We report that the Consolidated Financial Statements have been prepared by the Companys Management in accordance with the requirements of Accounting Standard 21 Consolidated Financial Statements and Accounting Standard 23 Accounting for Investments in Associates in Consolidated Financial Statements, issued by the Institute of Chartered Accountants of India. In our opinion and to the best of our information and according to the explanations given to us, on the basis stated in paragraph (2) above, the Consolidated Financial Statements give a true and fair view in conformity with the accounting principles generally accepted in India: i. ii. in the case of the Consolidated Balance Sheet, of the consolidated state of affairs of the Group as at March 31, 2005, 2006 and 2007; in the case of the Consolidated Profit and Loss Account, of the consolidated profits of the Group for the years ended on those dates; and

5.

iii. in the case of the Consolidated Cash Flow Statement, of the consolidated cash flows of the Group for the years ended on those dates. 6. The amounts for the year ended and as at March 31, 2007 expressed in U.S. dollars, provided as supplementary information solely for the convenience of the reader, have been translated on the basis set forth in note (C) (7) on Schedule 14 to the Financial Statements.

For DELOITTE HASKINS & SELLS Chartered Accountants M. S. Dharmadhikari Partner Membership No. 30802 Mumbai: July 6, 2007

F-49

AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF TATA MOTORS LIMITED CONSOLIDATED BALANCE SHEET
Schedule 2005 As at March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S. $ Millions) 88.7 1,687.6 1,776.3 57.5 1,026.5 653.2 1,679.7 188.1 3,701.6

SOURCES OF FUNDS 1. SHAREHOLDERS FUNDS (a) Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Reserves and Surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. 3. MINORITY INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LOAN FUNDS (a) Secured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DEFERRED TAX LIABILITY (NET) [Note A (6) Schedule 14] . . . . . . . TOTAL FUNDS EMPLOYED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 2

3,617.9 40,353.7 43,971.6 630.5

3,828.7 57,486.0 61,314.7 1,739.3 8,816.2 24,975.2 33,791.4 6,767.9 103,613.3

3,854.1 73,362.6 77,216.7 2,499.6 44,626.5 28,392.5 73,019.0 8,172.7 160,908.0

3 4

5,767.0 21,375.0 27,142.0 6,205.4 77,949.5

4. 5.

APPLICATION OF FUNDS 6. FIXED ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (a) Gross Block . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) LessDepreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Net Block . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Capital Work-in-Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. 8. 9. GOODWILL (On Consolidation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CURRENT ASSETS, LOANS AND ADVANCES (a) Interest accrued on investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Sundry Debtors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Cash and Bank Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Loans and Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5 78,006.3 37,593.3 40,413.0 5,409.9 45,822.9 516.2 6 21,263.6 61.3 20,620.4 12,414.0 20,973.2 26,472.7 80,541.6 93,050.0 48,435.6 44,614.4 9,744.9 54,359.3 4,122.1 12,615.0 64.9 24,810.4 13,544.8 13,864.4 58,284.0 110,568.5 64,436.6 13,754.1 78,190.7 32,377.8 139.1 103,613.3 103,591.8 54,266.5 49,325.3 25,816.5 75,141.8 4,430.1 11,745.9 62.7 31,669.0 17,022.2 11,542.7 97,828.3 158,124.9 72,349.6 16,304.4 88,654.0 69,470.9 119.3 160,908.0 2,383.1 1,248.4 1,134.7 593.9 1,728.6 101.9 270.2 1.4 728.5 391.6 265.5 2,250.5 3,637.5 1,664.3 375.0 2,039.3 1,598.2 2.7 3,701.6

7 8 9 10

10. CURRENT LIABILITIES AND PROVISIONS (a) Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11. NET CURRENT ASSETS [(9) less (10)] . . . . . . . . . . . . . . . . . . . . . . . . . 12. MISCELLANEOUS EXPENDITURE . . . . . . . . . . . . . . . . . . . . . . . . . . . (to the extent not written off or adjusted) 13. TOTAL ASSETS (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14. BASIS OF CONSOLIDATION AND SIGNIFICANT ACCOUNTING POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15. NOTES TO BALANCE SHEET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11 12

57,958.7 12,453.0 70,411.7 10,129.9

13

216.9 77,949.5

14

F-50

TATA MOTORS LIMITED CONSOLIDATED PROFIT AND LOSS ACCOUNT

Schedule 2005 Year Ended March 31, 2006 2007 2007 (in Rs. Millions) ( in U.S.$ Millions) 272,637.3 34,942.8 237,694.5 2,435.2 240,129.7 369,878.2 45,614.1 324,264.1 1,531.8 325,795.9 8,508.8 1,049.3 7,459.5 35.2 7,494.7 6,682.9 (170.2) 6,512.7 982.0 19.6 158.3 93.4 0.1 710.6 (0.3) (0.1) 710.2 (203.2) 507.0 * (17.1) 9.1 499.0 226.4 (0.2) (0.2) 725.0 1.0 133.0 24.3 (0.1) 237.3 1.2 14.0 314.3 725.0 1.30 1.23

INCOME 1. SALE OF PRODUCTS AND OTHER INCOME FROM OPERATIONS . . . LESS: EXCISE DUTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. DIVIDEND AND OTHER INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

A(1) 227,046.6 31,435.1 195,611.5 A(2) 1,339.4 196,950.9 B

EXPENDITURE 3. MANUFACTURING AND OTHER EXPENSES . . . . . . . . . . . . . . . . . . . . . . 4. EXPENDITURE TRANSFERRED TO CAPITAL AND OTHER ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PROFIT BEFORE DEPRECIATION, INTEREST, AMORTISATION, EXCEPTIONAL ITEMS AND TAX . . . . . . . . . . . . . . . . . 5. PRODUCT DEVELOPMENT EXPENDITURE . . . . . . . . . . . . . . . . . . . . . . . 6 DEPRECIATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. INTEREST [Note B (1) Schedule 14] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. AMORTISATION OF MISCELLANEOUS EXPENDITURE IN SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PROFIT FOR THE YEAR BEFORE EXCEPTIONAL ITEMS AND TAX . . 9. PROVISION FOR DIMINUTION IN VALUE OF INVESTMENTS (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10. EMPLOYEE SEPARATION COST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PROFIT BEFORE TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11. TAX EXPENSE [Note A (6c) Schedule 14] . . . . . . . . . . . . . . . . . . . . . . . . . . . PROFIT AFTER TAX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12. ADJUSTMENT OF MISCELLANEOUS EXPENDITURE IN SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13. SHARE OF MINORITY INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14. SHARE OF PROFIT IN RESPECT OF INVESTMENTS IN ASSOCIATE COMPANIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PROFIT FOR THE YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15. BALANCE BROUGHT FORWARD FROM PREVIOUS YEAR . . . . . . . . . Less: Arrears of preference dividend pertaining to erstwhile Tata Finance Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16. ADJUSTMENT FOR REVISED AS 15 IN A SUBSIDIARY . . . . . . . . . . . 17. TRANSLATION ON OPENING BALANCE IN RESPECT OF FOREIGN SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18. ADJUSTMENT IN RESPECT OF INVESTMENTS IN ASSOCIATE COMPANIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AMOUNT AVAILABLE FOR APPROPRIATIONS . . . . . . . . . . . . . . . . . . . . . 19. APPROPRIATIONS a) Tax on Interim Dividend by subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . b) Proposed Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) Tax on Proposed Dividend (including our share of subsidiaries dividend tax) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d) Residual dividend paid for previous financial year (including tax) . . . . . e) General Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . f) Special Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . g) Reserve for Research and Human Resource Development . . . . . . . . . . . . h) Debenture Redemption Reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . j) Balance carried to Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

173,359.9 211,007.6 290,504.8 (2,673.8) (3,795.8) (7,399.1) 170,686.1 207,211.8 283,105.7 26,264.8 671.2 5,310.1 1,696.6 29.3 18,557.6 32,917.9 717.7 6,233.1 2,460.1 0.2 23,506.8 42,690.2 850.2 6,880.9 4,058.1 5.2 30,895.8

(40.0) (17.0) (11.8) (36.7) (2.6) 18,480.9 23,489.8 30,881.4 (4,906.2) (6,400.0) (8,832.1) 13,574.7 17,089.8 22,049.3 (37.8) (84.8) (25.3) (222.9) (1.4) (742.2)

401.3 439.3 394.2 13,853.4 17,280.9 21,699.9 2,834.7 6,345.3 9,841.0 199.4 12.3 (6.9) (10.0)

22.3 16,710.4 23,439.1 31,524.0 4,521.9 4,979.4 45.6 5,780.7

697.3 864.5 1,055.2 15.4 0.7 5,161.6 7,683.7 10,316.3 15.8 14.3 52.6 56.2 608.3 (46.9) 6,345.3 9,841.0 13,664.6 16,710.4 23,439.1 31,524.0 38.50 36.07 45.86 43.15 56.43 U.S. $ 53.54 U.S. $

20. EARNINGS PER SHARE [Note B (3) Schedule 14] Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rupees Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rupees 21. BASIS OF CONSOLIDATION AND SIGNIFICANT ACCOUNTING POLICIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22. NOTES TO PROFIT AND LOSS ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . 14

F-51

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 Activities Net Profit after tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustments for: Depreciation (including Lease Equilisation netted off against income) . . . . . . . . . . . . . (Profit) / Loss on Sale of Assets (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profit on Sale of Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision for diminution in value of investments (net) . . . . . . . . . . . . . . . . . . . . . . . . . . Share of Profit in respect of Investments in associate companies . . . . . . . . . . . . . . . . . . Share of minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wealth tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest / Dividend (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Gain on issue of shares by a subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loss on liquidation of subsidiaries (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amortisation of miscellaneous expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employee separation cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Operating Profit before working capital changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Adjustments for: Trade and other receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Trade and other payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vehicle / other loans and hire purchase receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash (used in) / from Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Direct Taxes Paid (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net Cash (used in) / from Operating Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B. Cash Flow from Investing Activities Purchase of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sale of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Acquisition of a subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchase of investments in associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loan given to associate company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Loan given to affiliate company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sale of investments in Mutual Fund (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchase of investmentsothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Refund of acquisition tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Refund from escrow account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchase of subsidiaries shares from Minority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Increase) / Decrease in Investments in retained interests in securitisation transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sale/redemption of investments in subsidiary companies . . . . . . . . . . . . . . . . . . . . . . . . Sale of investments in associate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sale/redemption of investments in others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payment for purchase of business from administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividend received from associates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividend / Income on investments received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (Increase) / Decrease in short term Inter corporate deposit . . . . . . . . . . . . . . . . . . . . . . . Net Cash used in Investing Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,853.4 5,310.1 60.8 (538.5) 40.0 (401.3) 84.8 5.7 4,045.2 861.0 895.7 (63.6) 67.1 75.6 24,296.0 17,280.9 6,248.5 (57.4) (1,678.8) 17.0 (439.3) 222.9 4.9 4,978.9 1,421.1 1,789.6 (86.2) 322.6 25.5 56.1 30,106.3 21,699.9 6,843.1 (173.9) (429.4) 11.8 (394.2) 742.2 6.8 7,220.4 1,611.7 2,975.3 (19.6) 30.6 (693.9) 6.6 40.3 39,477.7 499.2 157.4 (4.0) (9.9) 0.3 (9.1) 17.1 0.2 166.1 37.1 68.4 (0.5) 0.7 (16.0) 0.2 0.9 908.1 (181.1) (157.5) 184.5 (797.7) (43.7) (157.9) (201.6)

(1,390.6) (4,966.2) (7,872.7) (5,834.5) (4,051.6) (6,840.1) 11,429.7 3,403.9 8,019.1 (9,832.7) (17,826.0) (34,676.2) 18,667.9 (4,622.1) 14,045.8 6,666.4 (5,561.8) 1,104.6 (1,892.2) (6,862.6) (8,754.8)

(8,739.7) (12,591.9) (27,587.5) 300.2 154.5 993.4 (92.4) (4,589.5) (233.4) (0.2) (396.6) (4,700.0) 4,773.0 8,076.5 1,383.5 (3,254.9) (690.6) (183.5) 42.9 33.4 (94.7) 595.8 1,252.6 495.9 1,028.3 (370.0) (9,393.0) 914.7 2,062.8 396.2 753.4 749.6 257.4 (286.6) 14.6 420.4 (4.4) 450.1 307.8 1,027.3 (600.0)

(634.6) 22.9 31.8 (4.2) (6.6) 0.3 9.7 (0.1) 10.4 7.1 23.6 (13.8) (553.5)

(4,473.7) (24,064.9)

F-52

TATA MOTORS LIMITED CONSOLIDATED CASH FLOW STATEMENT (contd.)

2005 Year Ended March 31, 2006 2007 2007 (in Rs. Millions) (in U.S.$ Millions) 4,449.9 (3.7) (0.9) 2,713.8 42,135.1 (6,263.6) (9,779.8) 989.5 8,610.0 373.1 155.8 (30.7) (27.1) (5,240.2) (5,753.9) (45.6) (73.4) (3,256.1) (4,653.8) * 969.3 (225.0) 198.1 3.6 (0.7) (0.6) (132.4) (1.0) (1.7) (107.1) 702.5 (52.6) 318.9 (0.1) 1.0 (1.4) (0.3) 265.5

C.

Cash Flow from Financing Activities Proceeds from issue of Foreign Currency Convertible Notes (net of expenses) . . . . . . . . Stamp duty on FCCN conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Premium on redemption of debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceeds from long term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repayment of long term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Increase / (Decrease) in short term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceeds from issue of shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proceeds from issue of shares to minority shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . Payment of premium on long term forward contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preliminary expenses incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividends paid (including Dividend Tax) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax paid on Interim Dividend by Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividends paid to minority shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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) . . . . . . . . . . . . . . . . . . . . . . . . . . . Net Cash (used in) / from Financing Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net Increase / (Decrease) in Cash & Cash Equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and cash equivalents as at March 31 (Opening balance) . . . . . . . . . . . . . . . . . . . . . . Add: Cash and bank balance taken over on merger of TFL . . . . . . . . . . . . . . . . . . . . . . . . Add: Cash and bank balances taken over on acquisitions of INCAT, TTPL and CEDIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Add: Cash and bank balances taken over on acquisition of TMISL . . . . . . . . . . . . . . . . . Less: Cash and bank balances of subsidiaries under liquidation, taken over by Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Add: Translation adjustment on opening cash and bank balances of foreign subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Add: Translation adjustment on reserves of foreign subsidiaries . . . . . . . . . . . . . . . . . . . . Less: Exchange fluctuation on EEFC accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cash and Cash Equivalents as at March 31 (Closing balance) . . . . . . . . . . . . . . . . . . . . . .

17,315.0 (118.6) 2,315.2 (6,230.2) (3,508.5) 718.1 2.3 (1,681.1) (2,417.3) 6,394.9

(6,237.3) 30,535.7

11,047.7 (9,606.4) (2,284.0) 9,674.3* 20,973.2* 13,864.4* 1,945.8 25.9 579.7 (5.5)

225.3 32.2 43.2 1.9 (62.6) (62.0) (12.8) 20,973.2* 13,864.4* 11,542.7*

* *

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 years figures have been restated, wherever necessary, to confirm to this years classification. under column in US $ Millions represents amount less than US$50,000/-

F-53

SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNT SCHEDULE A
2005 Year Ended March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S.$ Millions)

SALE OF PRODUCTS AND OTHER INCOME 1. Sale of products and other income from operations (a) Sale of products / Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Income from Hire purchase / Loan Contracts (Notes 1 to 4 below) . . . . . . . . . . . . (c) Miscellaneous income (Note 5 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Exchange difference (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Dividend and other income (Notes 6 to 8 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

224,545.9 1,608.5 892.2 227,046.6 1,339.4 228,386.0

267,005.6 4,355.7 1,276.0 272,637.3 2,435.2 275,072.5

359,658.3 6,725.5 2,171.7 1,322.7 369,878.2 1,531.8 371,410.0

8,273.7 154.7 50.0 30.4 8,508.8 35.2 8,544.0

2005

Year Ended March 31, 2006 2007 (in Rs. Millions)

2007 (in U.S.$ Millions)

Notes: (1) Value of Hire purchase contracts entered into during the year : (i) Purchased vehicles (Note 2 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Vehicles from Companys stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) Value of vehicles purchased and issued on Hire purchase contracts during the year . . . (3) (i) Income from Hire purchase contracts includes net income from lease rentals and income on securitisation / sale of receivable under Hire purchase contracts . . . . . (ii) Income from Loan contracts includes income on securitisation / sale of receivables of Loan contracts (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) Income from Loan contracts includes Interest income (net) . . . . . . . . . . . . . . . . . . . . . . (5) Miscellaneous income include : (i) Profit on sale of assets (net) [includes Capital Profits of Rs. 82.4 Millions] (2005-06 Rs.1.5 Millions, 2004-05 Rs. 23.1 Millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Insurance claims for loss of profit due to fire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) Dividend and other income includes : (i) Income from current investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Income from long term investments (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iii) Tax deducted at source . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) Dividend and other income includes: (i) Profit on sale of part interest in a subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Profit on sale of current investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iii) Profit / (loss) on sale of long-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iv) Additional consideration received in respect of Trade investment sold in 1999-2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8) Dividend and other income include amount received on issue of shares by a subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,301.9 5.9 1,856.6 139.5 1,017.1

74.6 0.7 72.0 216.7 761.2 3,083.1

487.2 411.2 4.2 775.0 5,483.5

11.2 9.5 0.1 17.8 126.1

29.7 467.6 333.3 9.6 364.0 7.1 167.4

81.5 68.2 602.3 9.6 1,541.2 137.6 (0.3) 86.20

226.1 479.0 99.6 983.2 19.3 122.0 307.4 19.60

5.2 11.0 2.3 22.6 0.4 2.8 7.1 0.5

F-54

SCHEDULES FORMING PART OF THE CONSOLIDATED PROFIT AND LOSS ACCOUNT SCHEDULE B
2005 Year Ended March 31, 2006 2007 (in Rs. Millions) 13,607.0 148,979.2 3,747.2 14,311.2 1,958.9 1,561.1 17,831.2 4,111.3 3,862.4 302.1 478.8 2,914.5 294.6 410.7 4.9 318.3 1,935.3 2,392.6 11,874.0 28,899.5 330.0 19,114.9 204,611.0 4,803.2 19,480.6 2,606.9 2,067.8 24,155.3 5,657.3 5,476.5 265.2 545.8 3,685.3 467.6 440.4 6.8 357.6 2,577.0 3,250.9 18,427.6 41,158.0 775.0 2007 (in U.S.$ Millions) 439.7 4,706.9 110.5 448.1 60.0 47.6 555.7 130.1 126.0 6.1 12.6 84.8 10.8 10.1 0.2 8.2 59.3 74.8 423.9 946.9 17.8

MANUFACTURING AND OTHER EXPENSES 1. Purchase of products for sale, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2. Consumption of raw materials and components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3. Processing charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4. Payments to and provision for employees (Note 1 below) . . . . . . . . . . . . . . . . . . . . . . . . (a) Salaries, wages and bonus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Contribution to provident and other funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Workmen and staff welfare expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5. Expenses for manufacture, administration and selling: (a) Stores, spare parts and tools consumed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Freight, transportation, port charges, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Repairs to buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Repairs to plant, machinery, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Power and fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (f) Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (g) Rates and taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (h) Provision for Wealth tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (j) Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (k) Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (l) Incentive / Commission to dealers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (m) Other expenses ( Note 2 below ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6. Excise Duty on Stock-in-trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7. Change in Stock-in-trade and Work-in-progress: A Opening Stock (i) Work-in-progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Stock-in-trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Add:- Stock acquired on acquisition of Concorde Motors Ltd (now known as Tata Motors Insurance Services Ltd.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Add:- Stock acquired on acquisition of INCAT and Tata Technologies Pte. Singapore Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B Closing Stock (i) Work-in-progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Stock-in-trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8,624.8 126,267.8 3,019.7 11,176.2 1,663.5 1,500.1 14,339.8 3,440.2 2,811.9 258.3 397.0 2,676.9 175.2 365.5 5.7 278.4 1,918.0 1,448.1 9,380.2 23,155.4 128.9

2,267.6 5,828.1 149.1 3,349.5 7,071.8 (2,176.5) 173,359.9

3,349.5 7,071.8 58.0 3,425.1 9,440.7 (2,386.5) 211,007.6

3,425.1 9,440.7 3,651.0 13,327.4 (4,112.6) 290,504.8

78.8 217.2 84.0 306.6 (94.6) 6,682.9

2005

Year Ended March 31, 2006 2007 (in Rs. Millions)

2007 (in U.S.$ Millions) 7.4 1.6 1.2 2.1 28.4 0.7 41.3 14.6 7.3 0.7

NOTES : (1) Payments to and provision for employees include: (i) Provisions for other employee benefit schemes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Managerial Remuneration for Directors (excluding provision for encashable leave and gratuity as separate actuarial valuation for Whole-time Directors is not available) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) Other expenses include (i) Loss on assets scrapped / written off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Repairs to buildings exclude amounts charged to other revenue accounts . . . . . . . . . (iii) Repairs to plant, machinery, etc exclude amounts charged to other revenue accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iv) Lease rentals in respect of plant and machinery . . . . . . . . . . . . . . . . . . . . . . . . . . . . (v) Provision and write off of sundry debtors / advances (net) . . . . . . . . . . . . . . . . . . . . . (vi) Securitisation expenses for Hire purchase / Loan contracts . . . . . . . . . . . . . . . . . . . . (vii) Exchange differences (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (viii) Commission and brokerage on sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ix) Contribution to Electoral Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (x) Loss on liquidation of subsidiaries (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

246.3 54.3 90.5 51.6 1,067.4 114.3 195.3 62.7 272.8 295.4 30.0

193.2 55.5 15.5 64.1 1,026.9 83.4 693.8 485.9 170.0 67.1

321.1 67.7 52.2 89.6 1,236.3 29.6 1,796.0 635.0 316.6 30.6

F-55

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET SCHEDULE 1

As at March 31, 2005 2006 2007 (in Rs. Millions) SHARE CAPITAL Authorised: 450,000,000 Ordinary Shares of Rs. 10 each (As at March 31, 2006 410,000,000 and as at March 31, 2005 400,000,000 Shares) and . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 (in U.S.$ Millions)

4,000.0 4,000.0

4,100.0 4,100.0

4,500.0 4,500.0

103.5 103.5

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) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Calls in arrears . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share Forfeiture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,617.5 0.1 3,617.4 0.5 3,617.9

3,828.3 0.1 3,828.2 0.5 3,828.7

3,853.7 0.1 3,853.6 0.5 3,854.1

88.7 * 88.7 * 88.7

F-56

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET SCHEDULE 2

2004 As at April 1, 2005 2006 2005 For year ended March 31, 2006 2007 2005 2006 2007 Deductions / Additions Adjustments (in Rs. (in Rs. Millions) Millions) 2005 As at March 31, 2006 2007 2007

Opening Balance (in Rs. Millions)

Closing Balance (in Rs. Millions)

(in U.S. $ Millions) 445.5 0.5 94.5 76.9 * 15.3 15.5 6.0 699.9 19.2 1,373.3 314.3 1,687.6

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 (b) Capital Redemption Reserve [Note (iii)] . . . . . . . . . . . 22.8 22.8 22.8 393.5 393.5 22.8 22.8 22.8 (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 (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 (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 (g) Reserve on Research and Human Resource Development [Note (iv)] . . . . . . . . . . . . . . . . . . . . . . . . 56.2 56.2 618.2 56.2 674.4 (h) Revaluation Reserve [Note (iii)] . . . . . . . . . . . . . . . . . . 263.9 268.2 4.3 4.4 263.9 259.5 (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 (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 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 (l) Profit and Loss Account . . . . . . . . . . . . . . . . . . . . . . . . . 6,345.3 9,841.0 13,664.6

F-57

40,353.7 57,486.0 73,362.6

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 . . . . . . . . . . . . . . . . . . . . . . . . . (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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Consequent to amalgamation of Telco Dadajee Dhackjee Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) FCCN issue expenses (net of tax) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Provision for premium on redemption of FCCN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (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)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (g) Stamp Duty charges on conversion of FCCN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iii) Changes consequent to amalgamations in 2005-06 (a) Capital Redemption Reserve on account of amalgamation of Tata Finance Ltd. . . . . . . . . . . . . . . . . . . . . . (b) Debenture Redemption Reserve on account of amalgamation of Tata Finance Ltd. . . . . . . . . . . . . . . . . . . (c) Amalgamation Reserve on account of amalgamation of Tata Finance Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . (d) Special Reserve on account of amalgamation of Tata Finance Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Revaluation Reserve on account of amalgamations of: (i) Telco Dadajee Dhackjee Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Depreciation on revalued portion of assets taken over on amalgamation of Telco Dadajee Dhackjee Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (f) General Reserve on account of amalgamation of: (i) Tata Finance Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Telco Dadajee Dhackjee Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iii) Suryodaya Capital and Finance (Bombay) Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,271.0 1,271.0 118.6 306.2 2,920.7 3,345.5 3,648.2 115.6 3,763.8 393.5 203.0 4.8 537.8 268.2 268.2 1,853.0 7.3 1,860.3 115.6 50.4 46.0 3.7 215.7 393.5 201.0 4.8 4.3 4.3 1,252.2 330.5 7.7 1,590.4 938.4 139.5 1,077.9 0.9 0.9 4.4 4.4

F-58

(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 Ltd and 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 the approved 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 consideration paid) 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 and minorities 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 foreign associates.

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET SCHEDULE 3

2005 As at March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S. $ Millions) 17.4 350.8 16.9 99.2 540.8 1.4 1,026.5 0.1

LOANSSecured (a) NonConvertible Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Loans from Financial Institutions / Banks # . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Sales Tax Deferment Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) From Banks: (i) Buyers line of credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Loans and Cash Credit / Overdraft Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Foreign Currency Loans from Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (f) Loans from Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

825.0 428.7 1,106.1 900.8 2,275.5 230.9 5,767.0

755.0 261.0 869.8 6,480.6 269.2 180.6 8,816.2 3.4

755.0 15,250.0 732.8 4,312.6 23,516.0 60.1 44,626.5 3.8

__________ # Including payable in respect of finance lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

44.0

SCHEDULE 4
2005 As at March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S. $ Millions) 117.2 32.2 1.0 406.0 46.7 50.1 653.2

LOANSUnsecured (a) Short Term LoansFrom Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Commercial Paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Inter Corporate Deposit / Call Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Short Term LoansFrom others in foreign currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Foreign Currency Convertible Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (f) Long Term Loans in foreign currencyOthers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (g) Loan from Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (h) Long Term Loans in foreign currencyBanks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7.9 17,962.0 2,092.4 1.7 1,311.0 21,375.0

204.8 42.5 19,046.2 2,098.1 3.6 3,580.0 24,975.2

5,096.8 1,400.0 42.5 17,646.9 2,028.3 2,178.0 28,392.5

F-59

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET SCHEDULE 5

Cost as at March 31, 2005 2006 2007 Accumulated Depreciation up to March 31, [Note (v)] 2005 2006 2007 (in Rs. Millions) Net Book value as at March 31, 2006 2007

2005

2007 (in U.S. $ Millions) 36.5 215.6 16.8 776.1 7.4 11.9 * 12.4

FIXED ASSETS (a) Land . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Buildings [Note (i), (ii)(a) and (iii)] . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Leasehold Land [Note (ii)(b)] . . . . . . (d) Railway Sidings . . . . . . . . . . . . . . . . . (e) Plant, Machinery, Equipment, etc. [Note (ii)(a) and (iii)] . . . . . . . . . . . . . (f) Water System and Sanitation [Note (ii)(a)] . . . . . . . . . . . . . . . . . . . . . . . . . (g) Furniture, Fixtures and Office Appliances [Note (iii)] . . . . . . . . . . . . (h) Technical Know-how fees . . . . . . . . . (j) Vehicles and Transport [Note (ii)(a) and (iii)] . . . . . . . . . . . . . . . . . . . . . . . (k) Leased Assets (i) Plant Taken on lease [ Note (vii)] . . . . . . . . . . . . . . . . . . . . . . (ii) Leased Premises / Assets . . . . . . (iii) Assets Given on Lease . . . . . . . . (l) Product Development Cost . . . . . . . . (m) Software . . . . . . . . . . . . . . . . . . . . . . .

1,013.5 1,120.7

1,587.1

1,013.5 1,120.7 1,587.1

10,669.3 11,702.6 12,391.7 2,393.4 2,689.5 3,019.7 8,275.9 9,013.1 9,372.0 445.2 444.2 779.5 38.4 42.7 47.2 406.8 401.5 732.3 1.3 1.3 59,892.3 67,722.8 76,172.1 32,699.4 37,824.6 42,446.7 27,192.9 29,898.2 33,725.4 426.3 529.3 383.7 452.9 922.9 383.7 555.4 1,020.5 385.3 1,248.6 195.8 265.8 370.7 586.5 213.8 468.0 383.7 685.4 233.7 501.5 383.8 711.3 230.5 263.5 13.0 387.4 239.1 454.9 465.1 321.7 519.0 1.5 537.3

973.9 1,150.5

1,887.3 313.1 75.5 796.6 599.0

1,885.7 314.1 4,560.9 1,259.1 1,129.9

1,507.6 350.0 4,464.6 1,564.7 1,564.7

729.3 885.0 893.0 1,158.0 1,000.7 1.8 56.6 14.2 311.3 257.5 70.3 4,247.0 4,224.6 5.2 313.9 222.0 573.5 1,088.9 574.6 685.6 18.6 365.8 701.9 580.4 764.1

614.6 335.8 240.0 475.8 862.8

14.1 7.7 5.5 10.9 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) (ii) 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. (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 and Rs. 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 block Rs. 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. 4.1 Millions 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. Includes Building, Plant & Machinery and Equipment, Furniture, Fixtures and Office Appliances and Vehicles and Transport having Gross 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 block of 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 Million and as at March 31, 2005 Rs. Nil, Rs. 28.9 Millions, Rs, Nil, Rs. Nil) respectively, held for disposal. 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. 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) on Assets transferred/sold/discarded during the year 2006-07.

(iii)

(iv)

(v)

F-60

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 lease rental 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 of gross 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 effect from 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 from October 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. 869.1 Millions) and Technical Know-how fees for Product development projects Rs. 4,864.0 Millions (as at March 31, 2006 Rs. 2076.0 Millions 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, 2005 Rs. 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 of Rs. 13.1 Millions and as at March 31, 2005 Rs. Nil) (vii) The assets are under renewable secondary lease.

F-61

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET INVESTMENTS (at cost) SCHEDULE 6
As at March 31, 2005 2006 (in Rs. Millions) 2007 2007 (in U.S. $ Millions)

(A) In Associates a) 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. 35.1 Millions and 2004-05 Rs. 4.3 Millions) of Capital Reserve arising on acquisition of associates] . . . . . b) Fully paid Cumulative Convertible Preference Shares (Unquoted) . . . . . . . . . . . . . . . . . . . . . . . . . . . . (B) Others (I) Long Term Investments Quoted a) Fully paid Ordinary/Equity shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unquoted a) Fully paid Ordinary/Equity shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Fully paid Cumulative Redeemable Preference Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c) Non Cumulative Redeemable Preference Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d) Non Convertible Debentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . e) Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . f) Retained interest in securitisation transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (II) Current Investments Quoted a) Fully paid Ordinary/Equity shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Government Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Unquoted a) Fully paid Cumulative Redeemable Preference Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b) Mutual Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,124.1 210.0

2,478.3 210.0

2,538.7 210.0

58.4 4.8

2,189.4 5.7 1,546.3 2,262.1 1,710.0 40.0 62.0 687.0

2,453.6 6.1 1,496.1 2,579.4 173.8 5.0 35.0 61.6 482.5

2,630.3 1,442.9 2,604.2 150.0 20.0 76.4 61.6 769.1

60.5 33.2 59.8 3.5 0.5 1.8 1.4 17.7

10,473.7 21,310.3 46.7 21,263.6

135.6 18.2 30.0 2,568.4 12,733.6 118.6 12,615.0

9.3 7.9 30.0 1,327.8 11,878.2 132.3 11,745.9

0.2 0.2 0.7 30.5 273.2 3.0 270.2

Less: Provision for diminution in value of Investments (Net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Notes: (1) (2) (3) (4) Book value of quoted investments (other than in associates) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,741.4 4,078.3 4,048.4 93.1 Book value of unquoted investments (other than in associates) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,188.1 5,848.4 4,948.8 113.8 Market value of quoted investments (other than in associates) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,835.9 18,636.2 17,261.1 397.1 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 wholly owned 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 an unsecured loan of Euro 7 million ((March 31, 2007) Rs. 405.2 Millions) and the Company has an Option to acquire the remaining 79% of the shares through one or more transfers, as per terms and conditions duly agreed upon at a price not exceeding Euro 2 million. The Company has also given a letter of comfort to Standard Chartered Bank and Citi Bank against working capital loans extended by both bank to Hispano aggregating Euro 7 million each. The Company has also given an undertaking to Standard Chartered Bank and Citi Bank for non-disposal of its shareholding in Hispano during the tenure of the loan.

F-62

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET SCHEDULE 6 (Contd.)

(6) The particulars of investments in associate companies are as follows:
Amount of Original Goodwill / Share of post Ownership Cost of (Capital acquisition Carrying Carrying Country of Interest Investment Reserve) in Reserves and Cost of Cost of Incorporation For the year (%) (+) Original Cost Surplus Investments Investments (in Rs. Millions) 1) Tata Cummins Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 @ 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 50.00 50.00 50.00 50.00 50.00 50.00 40.00 40.00 40.00 49.99 49.99 49.99 21.00 21.00 21.00 26.00 48.55 29.34 29.34 21.60 21.60 900.0 900.0 900.0 986.7 986.7 986.7 12.7 12.7 12.7 31.1 31.1 31.1 23.4 23.4 23.4 16.8 31.4 1.3 1.3 36.0 36.0 2,008.0 2,022.6 1,953.9 (4.3) (4.3) (4.3) 23.4 23.4 23.4 (11.1) (20.7) (10.1) (10.1) 6.0 6.0 3.9 (5.7) 19.1 579.8 383.5 186.2 (2.7) 102.8 22.8 (2.4) 5.2 (31.1) ! (31.1) ! (31.1) ! (23.4) ! (23.4) ! (7.7) 11.8 6.1 28.3 20.4 (29.6) (7.8) 530.7 455.7 170.2 1,479.8 1,283.5 1,086.2 984.0 1,089.5 1,009.5 10.3 17.9 12.7 15.7 28.6 37.5 29.6 21.7 6.4 28.2 2,538.7 2,478.3 2,124.1 (in US $ Millions) 34.0

Sr. No.

Name of the Associate

2)

Tata AutoComp Systems Ltd . . . . . . . . . . . . . . . . . . . . . . . . .

India

22.7

3)

NITA Company Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Bangladesh

0.2

4)

Tata Precision Industries Pte. Ltd. . . . . . . . . . . . . . . . . . . . . .

Singapore

5)

Hispano Carrocera S. A.** . . . . . . . . . . . . . . . . . . . . . . . . . .

Spain

6)

TSR Darashaw Ltd. (formerly known as Tata Share Registry Ltd.)*# . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Securities Pvt. Ltd. # . . . . . . . . . . . . . . . . . . . . . . . . . . .

India

0.7

7)

India

0.7

8)

Telcon Ecoroad Resurfaces Pvt. Ltd. ^ . . . . . . . . . . . . . . . . .

India

0.1

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

58.4

! @ ** + ^ # *

Share of loss restricted to the original cost of Investment as per the equity method of accounting for associates under AS -23 Accounting for 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.

F-63

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET SCHEDULE 7

2005 As at March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S.$ Millions) 36.4 6.1 257.1 84.0 306.6 38.3 728.5

INVENTORIES (a) Stores and spare parts (at or below cost) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Consumable tools (at cost) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Raw materials and components . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Work-in-progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Stock-in-trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (f) Goods-in-transit (at cost) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,555.8 222.4 7,754.8 3,349.5 7,071.8 666.1 20,620.4

1,518.1 227.8 9,098.0 3,425.1 9,440.7 1,100.7 24,810.4

1,582.5 265.9 11,177.6 3,651.0 13,327.4 1,664.6 31,669.0

Note: Items (c), (d) and (e) above are valued at lower of cost and net realisable value. SCHEDULE 8
2005 As at March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S.$ Millions) 38.4 355.6 394.0 13.0 381.0 14.3 2.6 1.1 10.6 391.6

SUNDRY DEBTORS (a) Over six months : (unsecured) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Others : (unsecured) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Provision for doubtful debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Future instalments receivable from hirers / lessees [secured under hire purchase / lease agreements and by promissory notes from hirers] [Note A(7), Schedule 14] . . . . . . . . . . . . . Less: Provision for doubtful instalments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Unearned finance and service charges on lease receivables / hire purchase contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,068.2 9,113.5 10,181.7 704.8 9,476.9 3,318.1 47.5 333.5 2,937.1 12,414.0

1,138.1 12,283.6 13,421.7 503.4 12,918.3 874.9 218.0 30.4 626.5 13,544.8

1,667.8 15,454.2 17,122.0 564.0 16,558.0 623.3 112.4 46.7 464.2 17,022.2

SCHEDULE 9
2005 As at March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S.$ Millions) 1.4 149.8 9.7 12.2 92.4 265.5

CASH AND BANK BALANCES (a) Cash on hand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Current accounts with Scheduled Banks # . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Current accounts with other than Scheduled Banks # . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Short term deposits with Banks * . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Margin Money / Cash Collateral with Scheduled Banks . . . . . . . . . . . . . . . . . . . . . . . . . .

20.5 3,678.5 462.5 16,047.3 764.4 20,973.2

75.8 3,713.2 1,049.5 6,077.7 2,948.2 13,864.4

60.9 6,513.3 423.4 530.2 4,014.9 11,542.7

# *

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 at March 31, 2005 Rs. 78.07 Millions) and with other than scheduled banks for foreign subsidiaries Rs. 41.2 Millions (as at March 31, 2006 Rs. 768.9 Millions and as at March 31, 2005 Rs. 99.7 Millions)

F-64

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET SCHEDULE 10

As at March 31, 2005 2006 2007 (in Rs. Millions) LOANS AND ADVANCES A) SECURED Vehicle loans (Note 1 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Provision for doubtful loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total vehicle loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Other secured loans (Note 2 below) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total (A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B) UNSECUREDconsidered good (a) Advances to suppliers, contractors and others (See Notes 3 and 4 below) . . . . . . . . . . . . . . (b) Loan to associate and others (Note 5 below). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Deposits with government, public bodies and others [Note 6 below] . . . . . . . . . . . . . . . . . . (d) Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Advance payment against taxes (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (f) Other unsecured loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total (B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total (A) and (B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) Includes amount due from customers in respect of contract works. . . . . . . . . . . . . . . . . . . . (5) Loan to associates and others: (i) Hispano Carocerra S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Tata Finance Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (iii) Tata Engineering Services Singapore Pte. Ltd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) Deposits with government, public bodies and others are net of deposits considered doubtful which have been provided for. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007 (in U.S. $ Millions)

15,199.5 268.3 14,931.2 14,931.2 3,522.4 5,096.6 1,918.2 305.5 698.8 11,541.5 26,472.7

45,763.1 1,107.6 44,655.5 44,655.5 5,854.1 444.5 3,834.0 617.5 2,878.4 13,628.5 58,284.0

80,968.5 1,697.0 79,271.5 146.8 79,418.3 9,628.7 405.2 4,481.1 1,247.3 2,571.9 75.8 18,410.0 97,828.3

1,862.6 39.0 1,823.6 3.4 1,827.0 221.5 9.3 103.1 28.7 59.2 1.7 423.5 2,250.5

315.1 115.9 396.6 4,700.0

994.8 160.9 377.7 66.8 85.3

905.9 165.4 405.2 83.0

20.8 3.8 9.3 1.9

SCHEDULE 11
2005 As at March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S. $ Millions) 562.7 1,013.8 79.0 0.2 6.1 2.5 1,664.3

CURRENT LIABILITIES (a) Acceptances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Sundry creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Advance and progress payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Amount due to a customer in respect of contract work. . . . . . . . . . . . . . . . . . . . . . . . . . . (e) Interest / commitment charges accrued on Loans but not due . . . . . . . . . . . . . . . . . . . . . . (f) Liability towards Investors Education and Protection Fund under Section 205C of the Companies Act, 1956 not due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28,939.4 24,845.7 3,911.3 196.4 65.9 57,958.7

29,502.3 30,602.1 4,023.2 2.1 193.6 113.3 64,436.6

24,461.1 44,069.0 3,435.0 6.7 268.9 108.9 72,349.6

F-65

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET (contd.) SCHEDULE 12

2005 As at March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S. $ Millions) 133.0 24.9 102.0 115.1 375.0

PROVISIONS (a) Proposed dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Provision for tax on dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Provision for retirement and other employee benefit schemes [Note B (2), Schedule 14] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Other provisions [Note B (4) Schedule 14] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4,521.9 697.3 2,315.2 4,918.6 12,453.0

4,979.4 785.5 2,913.2 5,076.0 13,754.1

5,780.7 1,084.2 4,436.0 5,003.5 16,304.4

SCHEDULE 13
2005 As at March 31, 2006 2007 (in Rs. Millions) 2007 (in U.S. $ Millions)

MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) (a) Employee Separation Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

216.1 0.8 216.9

138.4 0.7 139.1

96.8 22.5 119.3

2.2 0.5 2.7

F-66

TATA MOTORS LIMITED SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AND 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 subsidiary companies and associates. The Company and its subsidiaries constitute the Group. a) Basis of Accounting: I. II. The financial statements of the subsidiary companies used in the consolidation are drawn upto the same reporting date as of the Company i.e. year ended March 31, 2007. The financial statements of the Group have been prepared in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India, and other generally accepted accounting 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 a line-by-line basis by adding together like items of assets, liabilities, income and expenses. The intragroup balances and intra-group transactions and unrealised profits or losses have been fully eliminated. The consolidated financial statements include the share of profit / loss of the associate companies which has been accounted as per the Equity method, and accordingly, the share of profit / loss of each of 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 a Subsidiary 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 of equity of the subsidiary companies, at the dates on which the investments in the subsidiary companies are 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 in excess of cost of investment of the Company, it is recognised as Capital Reserve and shown under the head Reserves and Surplus, in the consolidated financial statements. IV. Minority interest in the net assets of consolidated subsidiaries consists of the amount of equity attributable to the minority shareholders at the dates on which investments are made by the Company in the subsidiary companies and further movements in their share in the equity, subsequent to the dates of investments as stated above.

II.

F-67

Tata Motors Limited BASIS OF CONSOLIDATION AND SIGNIFICANT ACCOUNTING POLICIES (Contd.) c)
Sr No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

The following subsidiary companies are considered in the consolidated financial statements:
Country of incorporation South Korea India India India India India India India UK India India India Thailand India India % of holding either directly or through subsidiary as at March 31, 2007 100 60 100 100 100 100 100 100 100 84.76 100 51 70 2006 100 60 100 100 100 100 100 100 100 86.91 2005 100 80 100 100 100 100 100 100 94.60 100 100

Name of the Subsidiary Company Direct Subsidiaries Tata Daewoo Commercial Vehicle Co. Ltd. Telco Construction Equipment Company Ltd. HV Axles Ltd. HV Transmissions Ltd. TAL Manufacturing Solutions Ltd. Sheba Properties Ltd. Concorde Motors (India) Ltd. Tata Motors Insurance Services Ltd. (formerly known as Concorde Motors Ltd.) Tata Motors European Technical Centre Plc. (w.e.f. September 1, 2005) Tata Technologies Ltd. TML Financial Services Ltd. (w.e.f. June 1, 2006) Tata Marcopolo Motors Ltd. (w.e.f. September 20, 2006) Tata Motors (Thailand) Ltd. (w.e.f. February 28, 2007) Suryodaya Capital and Finance (Bombay) Ltd. (Merged with the Company w.e.f. April 1, 2005) Telco Dadajee Dhackjee Ltd. (Merged with the Company w.e.f. April 1, 2005) Indirect Subsidiaries INCAT (Thailand), Limited.[formerly known as Tata Technologies (Thailand),Ltd] (w.e.f. October 10, 2005) Tata Technologies Pte. Limited Singapore [Note (i)] INCAT International PLC. [Note (ii)] INCAT Limited. [Note (ii)] INCAT SAS. [Note (ii)] INCAT GmbH. [Note (ii)] Cedis Mechanical Engineering GmbH. (w.e.f January 1, 2006) INCAT Holdings B.V. [Note (ii)] Lemmerpoort B.V. (formerly known as INCAT Engineering Solutions B.V.) [Note (iii)] INCAT K.K. [Note (ii)] Tata Technologies iKS Inc.(formerly known as iKnowledge Solutions Inc.) [Note (ii)] CADPO Asia Pte. Ltd. [Note (ii) and (iii)] Tata Technologies Sdn Bhd, Malaysia [Note (i)] Tata Technologies, U.S.A. [Note (iv)] INCAT Holdings Inc.[Note (ii) and (iv)] INCAT Systems Inc.[Note (ii)] INCAT Financial Services Inc. [Note (ii) and (iv)] Integrated Systems Technologies de Mexico, S.A. de C.V. [Note (ii)] INCAT Solutions of Canada Inc.[Note (ii)] Tata Technologies Investments Pte.Ltd, Singapore (Subsidiary holding 55%) [Note (i) and (iii)]

Thailand Singapore UK UK France Germany Germany Netherlands Netherlands Japan USA Singapore Malaysia USA USA USA USA Mexico Canada Singapore

84.76 84.76 84.76 84.76 84.76 84.76 84.76 84.76 84.76 84.76 84.76 84.76 84.76 84.88 84.88 84.88 46.62

86.91 86.91 86.91 86.91 86.91 86.91 86.91 86.91 86.91 86.91 86.91 86.91 86.91 87.01 87.01 87.01 87.01 87.01 87.01 47.80

94.60

(i) w.e.f. December 7 2005 (ii) w.e.f. October 3, 2005 (iii) These companies are under liquidation and hence the control doesnt 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. a)

Significant Accounting Policies: 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 to the dealer / customer. F-68

Tata Motors Limited BASIS OF CONSOLIDATION AND SIGNIFICANT ACCOUNTING POLICIES (Contd.) Sales are inclusive of income from services, excise duty, export incentive and exchange fluctuations on export receivables and are net of trade discount. Revenue from software consultancy on time and materials contracts is recognised based on certification of time sheet and billed to clients as per the terms of specific contracts. On fixed price contracts, revenue is recognised based on milestone achieved as specified in the contracts on the proportionate completion method on the basis of the work completed. Revenue from rendering annual maintenance services is recognised proportionately over the period in which services are rendered. Revenue from the SAP end user licenses is recognised 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 the year-end is recognised at cost plus attributable profits, where applicable, and included under Sale of Products and Services, in the Profit and Loss Account. Provision for foreseeable loss on contracts in progress is made fully. b) Depreciation

i) Depreciation is provided on straight line method basis (SLM) over the estimated useful lives of the assets except for assets acquired before April 1, 1975, which are depreciated on a written down value basis. Estimated useful lives of assets are as follows:
Type of Asset Factory Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Plant and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Computers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vehicles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Technical know-how . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Estimated useful life (years) 20 to 40 9 to 20 3 to 6 3 to 10 3 to 20 2 to 10

Capital assets, the ownership of which does not vest with the Company, other than leased assets, are depreciated 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 estimated useful life whichever is lower. ii) Assets given on lease as on March 31, 2000 acquired upon merger with Tata Finance Limited are depreciated at rates specified in Schedule XIV to the Companies Act, 1956. The differences between the depreciation charge as computed using the Internal Rate of Return (IRR) implicit in the lease, to ensure capital recovery over the primary lease period, and the charge as disclosed for the year, is reflected in the lease equalization account. iii) In respect of assets whose useful life has been revised, the unamortised depreciable amount has been charged over the revised remaining useful life. c) Fixed Assets

i) Fixed Assets (except for building acquired on amalgamation with Telco Dadajee Dhackjee Limited which is at revalued figure) are stated at cost of acquisition or construction less accumulated depreciation / amortisation. F-69

Tata Motors Limited BASIS OF CONSOLIDATION AND SIGNIFICANT ACCOUNTING POLICIES (Contd.) All costs relating to the acquisition and installation of Fixed Assets are capitalised and include financing costs relating to borrowed funds attributable to construction or acquisition of Fixed Assets, upto the date the asset is ready for intended use, adjusted for charges on foreign exchange contracts and exchange rate differences relating to specific borrowings, where applicable, attributable to those fixed assets. ii) Product development cost incurred on new vehicle platforms, variants on existing platforms and new vehicle aggregates are recognised as Intangible Assets (included under Fixed Assets) and amortised over a period of thirty six months to sixty months or on the basis of actual production to planned production volumes for thirty six months from the commencement of commercial production. iii) Software not exceeding Rs. 25,000 and product development costs relating to minor product enhancement, 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 at inception and the present value of minimum lease payments. Lease payments are apportioned between the finance charge and the outstanding liability. The finance charge is allocated to periods during the lease term at a constant periodic rate of interest on the remaining balance of the liability. Assets given under finance leases except for those stated in (b) (ii) above, are recognised as receivables at an amount equal to the net investment in the 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 the transaction. Foreign currency monetary assets and liabilities are translated at year end exchange rates. Exchange differences arising on settlement of transactions and translation of monetary items are recognised as income or expense in the year in which they arise, except in respect of the 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 the Fixed Assets. Premium or discount on forward contracts is amortised over the life of such contract and is recognised as income or expense, except in respect of the liabilities for the acquisitions of Fixed Assets incurred prior to April 1, 2004, where such amortisation is adjusted in the carrying cost of the Fixed Assets. Foreign currency options are stated at fair value as at year end. On consolidation, the assets, liabilities and goodwill or capital reserve arising on the acquisition, of the Groups overseas operations are translated at exchange rates prevailing on the balance sheet date. Income and expenditure items are translated at the average exchange rates for the year. Exchange differences arising are recognised in the Groups 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 are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures.

F-70

Tata Motors Limited 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 income from plant given on lease, are accounted for by using the Internal Rate of Return method. Consequently, a constant rate of return on the net outstanding amount is accrued over the period of contract. The Company provides an allowance for hire purchase and loan receivables that are in arrears for more than 11 months, to the extent of an amount equivalent to the outstanding principal and amounts 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) Sale of Vehicle Loans

The Company sells Vehicle Loans to Special Purpose Entities (SPE) in securitization transactions. Recourse is in the form of the Companys investment in subordinated securities issued by these special purpose entities, cash collateral and bank guarantees. The loans are derecognized in the balance sheet when they are sold and consideration has been received by the Company. Sales and transfers that do not meet the criteria for surrender 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 fair value of the portion sold and the portion allocated to retained interests, and are reported net of the estimated cost of servicing, except for subsidiaries which are governed by prudential norms for income recognition issued by the Reserve Bank of India for Non Banking Financial Companies (NBFC), where gains or losses on sale are accounted for as per these norms. j) Inventories

Inventories are valued at lower of cost and net realisable value. Cost is ascertained on a moving weighted average / monthly moving weighted average basis. Cost of Work-in-progress and finished goods are determined on full absorption cost basis. k) Employee Benefits i) Gratuity / Pension

The Company and some of its subsidiaries have 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 on termination of employment of an amount equivalent to 15 to 30 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Company and the said subsidiaries make annual contributions to gratuity funds established as trusts. Some subsidiaries have obtained insurance policies with the Life Insurance Corporation of India. The Company and some of its subsidiaries account for the liability for gratuity benefits payable in future based on an independent actuarial valuation. Tata Daewoo Commercial Vehicle Company Limited, TDCV a subsidiary company incorporated in Korea has an obligation towards severance indemnity, a defined benefit retirement plan, covering eligible employees. The plan provides for a lump sum payment to all employees with more than one year of employment equivalent to 30 days salary payable for each completed year of service. ii) Superannuation

The Company and some of its subsidiares have two superannuation plans, a defined benefit plan and a defined contribution plan. An eligible employee on April 1, 1996 could elect to be a member of either plan. F-71

Tata Motors Limited BASIS OF CONSOLIDATION AND SIGNIFICANT ACCOUNTING POLICIES (Contd.) Employees who are members of the defined benefit superannuation plan are entitled to benefits depending on the years of service and salary drawn. The monthly pension benefits after retirement range from 0.75% to 2% of the annual basic salary for each year of service. The Company and the said subsidiaries account for superannuation benefits payable 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 been protected as at March 31, 2003. Employees covered by this plan are prospectively entitled to benefits computed on a basis that ensures that the annual cost of providing the pension benefits would not exceed 15% of salary. The Company and some of its subsidiares maintain separate irrevocable trusts for employees covered and 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 Company and 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 and some of its subsidiaries. The benefits of the plan accrue to an eligible employee at the time of death or permanent disablement, while in service, either as a result of an injury or as certified by the appropriate authority. The monthly payment to dependents of the deceased/disabled employee under the plan equals 50% of the salary drawn at the time of death or accident or a specified amount, whichever is higher. The Company and the said subsidiaries account for the liability for BKY benefits payable in future based on an independent actuarial valuation. iv) Post-retirement Medicare Scheme Under this scheme, employees of the Company and some of its subsidiaries get medical benefits subject to certain limits of amount, periods after retirement and types of benefits, depending on their grade and location at the time of retirement. Employees separated from the Company as part of Early Separation Scheme, on medical grounds or due to permanent disablement are also covered under the scheme. The Company and the said subsidiaries account for the liability for post-retirement medical scheme based on an independent actuarial valuation. v) Provident fund

The eligible employees of the Company and its subsidiaries are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the company/subsidiaries make monthly/annual contributions at a specified percentage of the covered employees salary (currently 12% of employees salary). The contributions, as specified under the law, are made to the provident fund and pension fund set up as irrevocable trust by the Company and its subsidiaries or to respective Regional Provident Fund Commissioner and the Central Provident Fund under the State Pension scheme. The Company and its subsidiaries are generally liable for monthly/annual contributions and any shortfall in the fund assets based on the government specified minimum rates of return or pension and recognises such contributions 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 pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits, for future encashment. The liability is provided based on the number of days of unutilized leave at each balance sheet date on basis of an independent actuarial valuation. F-72

Tata Motors Limited 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, the share of post acquisition reserves of each of the associate companies has been added to / deducted from the cost of investments. iii. Current investments mainly comprising investments in mutual funds are stated at lower of cost and fair value, 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 accordance with the provisions of the IncomeTax 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 and accounting 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 there is 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 by adjusting against the Securities Premium Account (SPA). Any changes to this premium payable on account of conversion or exchange fluctuation is also adjusted in SPA. Discount on redemption of FCCN, if any, will be recognised on redemption. o) Business Segments The Groups reportable operating segment consists of Automotive and Others.

Automotive segment consists of business of automobile products consisting of all types of commercial and passenger vehicles including financing of the vehicles sold by the Company. Others primarily include construction equipment, engineering solutions, and software operations. Segment revenues, expenses and results include transfer between business segments. Such transfers are undertaken either at competitive market prices charged to unaffiliated customers for similar goods or at contracted 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 months depending upon 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 of India becoming applicable in the financial year 2004-05, and debited to Securities Premium Account (SPA) as against the past practice of providing premium on a pro-rata basis and debiting to SPA. As a result, the debit to SPA is higher by Rs. 2,530.9 millions. Consequent to revision of Accounting Standard - AS 15 Employee Benefits, the Company has adopted the revised accounting standard effective April 1, 2006 . Pursuant to the adoption, an amount of Rs. 113 Millions (net of tax Rs. 57.3 millions) have been adjusted to General Reserve in the year 2006-07 for difference as per revised AS 15 [Refer Note B (2) (a), Schedule 14]. F-73

2.

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (A) Notes to Balance Sheet
2005 As at March 31, 2006 2007 (in Rs. Millions) 2,545.0 2,834.1 343.1 7.2 180.8 11,820.4 6,874.3 1,314.7 2,793.2 482.5 458.3 64.1 4,090.2 6,333.8 275.1 34,262.0 5,292.3 6,381.5 3,871.5 769.1 694.5 50.0 2007 (in U.S. $ Millions) 94.1 145.7 6.3 788.2 121.7 146.8 89.1 17.7 16.0 1.2

1 (a) Claims not acknowledged as debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Provision not made for income tax matters in dispute . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) The counter claim made by a party upon termination of distributorship arrangement by the Company (GBP 4.432 Millions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) Liquidated damages retained by customers under negotiations for waiver . . . . . . . . . . . . . 2 The claims / liabilities in respect of excise duty, sales tax and other matters where the issues were decided in favour of the Company for which department is in further appeal . . . . . . . . . 3 Estimated amount of contracts remaining to be executed on capital account and not provided for . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Other money for which the Company is contingently liable: (a) In respect of bills discounted and export sales on deferred credit . . . . . . . . . . . . . . . . . . . . (b) The Company has given guarantees for liability in respect of receivables assigned by way of securitisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Cash Margin / Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) In respect of retained interest in securitisation transactions . . . . . . . . . . . . . . . . . . . . . . . . (e) In respect of subordinated receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (f) Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Pursuant to the scheme of Arrangement, stamp duty is payable on conveyance of properties in favour of Concorde Motors (India) Limited (CMIL), a subsidiary company, CMIL is in the process of completing the formalities for the same. It is not possible to quantify the amount of duty payable, and adjustments, as and when effected, will be done in the cost of land and building. 6 (a) Major components of deferred tax arising on account of timing differences are:

4,532.0 1,155.6 364.7 1,435.0 5,583.2 3,969.4 1.1 764.4 687.0 42.3

2005

As at March 31, 2006 2007 (in Rs. Millions)

2007 (in U.S. $ Millions) (169.1) (76.6) (2.6) (248.3) 2.1 3.4 23.7 23.3 7.7 60.2 (188.1)

Liabilities: Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Product development cost and Reserves for Research and Development Expenses . . . . . . . . . Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6,745.7) (6,903.0) (732.0) (1,785.3) (238.8) (116.3)

(7,352.9) (3,330.0) (111.6)

(7,716.5) (8,804.6) (10,794.5) Assets: Unabsorbed depreciation/ business loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employees Separation Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employee benefits / Expenses allowable on payment basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . Provision for doubtful debts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155.4 186.7 506.8 409.2 253.0 1,511.1 Net Deferred Tax Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.8 179.5 664.5 804.4 328.5 2,036.7 92.5 149.4 1,031.7 1,012.1 336.1 2,621.8 (8,172.7)

(6,205.4) (6,767.9)

F-74

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (contd.) (A) Notes to Balance Sheet (contd.) (b) Deferred Tax charge for the year
Year Ended March 31, 2006 2007 2007 (in Rs. Millions) (in U.S. $ Millions) 5,337.0 6,205.4 6,767.9 155.7 2005 2.9 (850.1) (12.3) 3.8 8.9 0.2

Opening Deferred Tax Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Add:- Net deferred tax balance taken over upon merger of Tata Finance Ltd (net of amount transferred to General Reserve) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Add:- Net deferred tax balance taken over upon acquisition of INCAT Ltd. . . . . . . . . . . . . . . Add:- Translation impact on opening balances in respect of foreign subsidiaries . . . . . . . . . . . Add:- Net deferred tax balance on merger of Tata Motors Insurance Services Limiteds sales and service division with Concorde Motors (India) Limited adjusted to the opening reserve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Add:- Impact of AS-15 opening adjustment in General Reserve . . . . . . . . . . . . . . . . . . . . . . . .

4.5 5,344.4

5,346.8

(215.8) 6,561.0

(5.0) 150.9 (188.1) (37.2) 163.8 2.3 37.1 203.2

Less:- Closing Deferred Tax Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Deferred Tax charge for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) Tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i) Current Tax ii) Fringe Benefit Tax iii) Deferred Tax.

(6,205.4) (6,767.9) (8,172.7) (861.0) (1,421.1) (1,611.7) 4,045.2 861.0 4,906.2 4,738.2 240.7 1,421.1 6,400.0 7,121.3 99.1 1,611.7 8,832.1

F-75

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AND PROFIT 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total Gross investment in the leases for a period: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not later than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Later than one year and not later than five years . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Present value of the minimum lease payments receivables. . . . . . . . . . . . . . . . . . . . Present Value of the minimum lease payments receivable for a period: Not later than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Later than one year and not later than five years. . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Unearned Finance Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) The accumulated provision for the uncollectible minimum lease payments receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (d) A general description of significant leasing arrangements Finance lease and Hire Purchase agreements: The Group has given own manufactured vehicles, and machines and equipment on Hire Purchase / Lease. The contingent lease rentals is based on bank interest rate and depreciation in respect of the assets given on lease. (ii) Assets taken on lease: (a) (i) Total of minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The total of minimum lease payments for a period: Not later than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Later than one year and not later than five years. . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Present Value of minimum lease payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Present Value of minimum lease payments for a period: . . . . . . . . . . . . . . . . . . . . Not later than one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Later than one year and not later than five years. . . . . . . . . . . . . . . . . . . . . . . . . . . (b) A general description of the significant leasing arrangements The Group has taken machines and equipments on lease. The contingent lease rental is based on State Bank Medium Term Lending Rate and the depreciation rate under Income-tax Act, 1961 in respect of assets taken on lease. The assets are under renewable secondary lease (B) 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Later than one year and not later than five years. . . . . . . . . . . . . . . . . . . . . . . . . . . (b) Lease payments recognised in the statement of profit and loss for the year . . . . . . . . . . . (c) A general description of significant leasing arrangements The Company has entered into operating lease arrangements for computers, property and office equipments from various vendors.

3,322.0 2,176.8 1,145.2 2,984.6 1,934.9 1,049.7 337.4 47.5

874.9 453.9 421.0 844.5 432.5 412.0 30.4 218.0

623.3 376.2 247.1 576.6 349.6 227.0 46.7 112.4

14.3 8.6 5.7 13.2 8.0 5.2 1.1 2.6

50.3 20.1 30.2 44.0 16.6 27.4

7.3 4.2 3.1 6.8 3.9 2.9

4.1 1.6 2.5 3.8 1.4 2.4

0.1 * 0.1 0.1 * 0.1

79.3 75.5 3.8 113.4

245.7 92.5 153.2 132.9

464.1 144.8 319.3 139.3

10.7 3.3 7.4 3.2

F-76

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (contd.) (A) Notes to Balance Sheet (contd.)
8 Related party disclosures A) Related Party and their relationship Associates Tata AutoComp Systems Ltd Tata Cummins Ltd Tata Precision Industries Pte. Ltd Tata Engineering Services Pte. Ltd (Due to Common Key Management Personnel) Tata Sons Ltd (Investing Party) Nita Company Ltd Hispano Carrocera, S. A (From March 16, 2005) TSR Darashaw Ltd Tata Securities Private Ltd Telcon Ecoroad Resurfaces Private Ltd Concorde Motors Ltd (Upto October 20, 2004) Tata International Ltd (Upto February 28, 2005) Nishkalp Investments and Trading Co. Ltd (Upto January 20, 2006) B) Transactions with the related parties Associates Key Management Personnel ( in Rs. Millions ) 210.7 150.5 51.2 36.5 0.5 3.4 3.6 4.5 Total Total (in U.S. $ Millions) 405.1 26.8 16.0 0.7 1.3 15.5 2.2 27.5 10.7

Key Management Personnel Mr. Ravi Kant Mr. Praveen P. Kadle Dr. V Sumantran (Upto August 24, 2005) In Subsidiary Companies: Mr. L K Pahwa Mr. Shyam Maller (Upto June 5, 2006) Mr. M.V.S Prasad (From June 6, 2006) Mr. Ranveer Sinha Mr. M L Bapna Mr. P K Mahtha (Upto September 15, 2006) Mr. S C Singha Mr. V N Sharma Mr.A K Jha (From September 16, 2006) Dr.Clive Hickman

Mr. P R McGoldrick Mr. U Herter Mr. W K Harris Mr. H Hutchinson Mr. Fernando Oviedo Mr. D Myers Mr. L James Mr. W Zofgen Mr. Marcus Schleer Mr. Kevin Noe Mr. Ramesh Indhewat Mr.A.I.Rebello (Upto January 7, 2007) Mr.P.C.Bandivadekar Mr. Jose Peter

Purchase of goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sale of goods (inclusive of sales tax) . . . . . . . . . . . . . . . . . . . . . . . . . . Purchase of fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Services received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Services rendered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Finance given (including loans and equity) . . . . . . . . . . . . . . . . . . . . . Finance taken (including loans and equity) . . . . . . . . . . . . . . . . . . . . . Purchase of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest / Dividend paid / (received) (net) . . . . . . . . . . . . . . . . . . . . . . . Amount Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bills discounted (in respect of amount receivable) . . . . . . . . . . . . . . . . Amount Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amount Receivable (in respect of loans) . . . . . . . . . . . . . . . . . . . . . . .

2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05

17,608.8 12,550.3 9,477.8 1,165.3 967.0 1,662.6 180.0 96.1 483.9 539.6 348.0 30.3 45.7 35.5 55.5 956.6 81.2 81.7 673.7 756.6 32.8 94.2 102.0 156.4 11.9 101.8 1,195.2 617.7 506.6 460.5 394.7 396.6

17,608.8 12,550.3 9,477.8 1,165.3 967.0 1,662.6 180.0 96.1 694.6 690.1 399.2 30.3 45.7 35.5 55.5 956.6 117.7 81.7 673.7 757.1 32.8 94.2 102.0 156.4 11.9 101.8 1,195.2 617.7 506.6 463.9 398.3 401.1

F-77

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (contd.) (A) Notes to Balance Sheet (contd.) 8 Related party disclosures (contd.)
2004-05 2005-06 2006-07 (in Rs. Millions) C) Disclosure in respect of material transactions with related parties (i) Purchase of goods . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Sale of goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Cummins Ltd Tata AutoComp Systems Ltd Tata Cummins Ltd NITA Company Ltd. Tata AutoComp Systems Ltd (iii) Purchase of fixed assets . . . . . . . . . . . . . . . . . . . (iv) Services received . . . . . . . . . . . . . . . . . . . . . . . . . (v) Services rendered . . . . . . . . . . . . . . . . . . . . . . . . . Hispano Carrocera, S.A Tata Sons Ltd Tata International Ltd Tata Cummins Ltd TSR Darashaw Ltd Tata International Ltd (vi) Finance given (including loans and equity) . . . . Hispano Carrocera, S.A Tata AutoComp Systems Ltd Tata Sons Ltd Telcon Ecoroad Resurfaces Private Ltd (vii) Finance taken (including loans and equity) . . . . (viii) Purchase of investments . . . . . . . . . . . . . . . . . . (ix) Interest / Dividend paid / (received) Dividend paid . . . . . . . . . . . . . . . . . . . . . . . . . . . Dividend received . . . . . . . . . . . . . . . . . . . . . . . Tata Sons Ltd Tata International Ltd Tata Cummins Ltd Tata Sons Ltd Tata International Ltd NITA Company Ltd. Interest received . . . . . . . . . . . . . . . . . . . . . . . . . Tata AutoComp Systems Ltd Tata International Ltd Tata Sons Ltd Hispano Carrocera, S. A Niskalp Investments and Trading Co. Ltd. 316.3 2.7 (180.0) (74.3) (7.5) (4.6) (17.6) (1.1) (0.7) 991.4 (72.0) (91.6) (14.0) (42.9) 1,096.1 (288.0) (86.4) (18.7) 25.2 (6.6) (2.0) (0.4) Tata Engineering Services Pte. Ltd. Mr. P R McGoldrick Tata Engineering Services Pte. Ltd. 9,471.6 998.8 315.9 278.1 96.1 250.5 95.6 30.7 6.1 396.6 210.0 350.0 10,537.0 2,002.8 925.8 180.0 443.7 36.5 81.2 36.5 81.7 14,935.6 2,659.0 1,044.4 400.0 19.4 10.3 55.5 343.6 61.2 24.0 9.2 0.4 0.2 1.3 2006-07 (in U.S. $ Millions)

F-78

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (contd.) (A) Notes to Balance Sheet (contd.) 9 Consolidated Segment Information
Automotive Inter-Segment Others Eliminations (in Rs. Millions) Total Total (in U.S. $ Millions)

(A) Primary Segment a) Revenue External sales and income from other operations . . . . . . 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 219,597.9 152,409.0 119,054.1 72,123.6 64,955.4 59,275.7 6,537.3 5,780.5 5,039.8 27,919.2 14,186.4 9,469.8 13,986.0 11,611.6 7,901.8 6,987.0 4,636.5 2,880.5 343.6 452.6 265.3 626.3 456.3 258.7 (2,951.8) (2,036.1) (1,351.5) (541.8) (455.0) (162.0) 5.0 (125.7) (9.3) (39.4) 299,472.2 221,583.6 186,144.4 421.3 341.1 271.6 299,893.5 221,924.7 186,416.0 30,207.4 21,807.3 18,053.5 24,791.9 16,110.9 9,467.1 2,287.0 1,957.1 1,414.4 27,078.9 18,068.0 10,881.5 3,329.8 1,731.5 904.4 (2,708.3) (2,298.2) (1,686.0) (2,708.3) (2,298.2) (1,686.0) (115.1) (7.1) (43.1) 324,264.1 237,694.5 195,611.5 324,264.1 237,694.5 195,611.5 33,422.1 23,531.7 18,914.8 1,531.8 2,435.2 1,339.4 (4,058.1) (2,460.1) (1,696.6) (14.4) (17.0) (76.7) 30,881.4 23,489.8 18,480.9 (8,832.1) (6,400.0) (4,906.2) 22,049.3 17,089.8 13,574.7 230,632.1 161,984.5 125,604.4 78,568.8 69,136.9 61,994.2 6,880.9 6,233.1 5,310.1 28,419.8 14,633.4 9,689.1 7,459.5

Inter segment sales and other income . . . . . . . . . . . . . . .

Total Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7,459.5

b) Segment results before interest, exceptional items and tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

768.9

c) i) Dividend and other income . . . . . . . . . . . . . . . . . . . . .

35.2

ii) Interest expenses (net) . . . . . . . . . . . . . . . . . . . . . . . .

(93.4)

iii) Exceptional item . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(0.3)

d) Profit before tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

710.4

Tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(203.2)

e) Profit after tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

507.2

f) Segment assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,305.6

g) Segment liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1,807.4

h) Other information i) Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

158.3

ii) Capital expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . .

653.8

F-79

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (contd.) (A) Notes to Balance Sheet (contd.) 9 Consolidated Segment information (contd.)
(A) Primary Segment (contd.) Inter-Segment Others Eliminations (in Rs. Millions)

Automotive

Total

Total (in U.S. $ Millions) 101.9 270.2 59.2

j) Segment assets exclude: i) Goodwill (On consolidation) . . . . . . . . . . . . . . . . . . . . . . ii) Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii) Advance Tax (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv) Miscellaneous expenditure (to the extent not written off or adjusted). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v) Interest accrued on investments . . . . . . . . . . . . . . . . . . .

2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05

4,430.1 4,122.1 516.2 11,745.9 12,615.0 21,263.6 2,571.9 2,878.4 698.8 119.3 139.1 216.9 62.7 64.9 61.3 18,929.9 19,819.5 22,756.8 2,499.6 1,739.3 630.5 44,626.5 8,816.2 5,767.0 28,392.5 24,975.2 21,375.0 8,172.7 6,767.9 6,205.4 2,842.5 2,982.0 2,936.0 6,864.9 5,764.9 5,219.2 268.9 193.6 196.4 108.9 113.3 65.9 93,776.5 51,352.4 42,395.4

2.7 1.4

435.4

k) Segment liabilities exclude: i) Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii) Loans secured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii) Loans unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv) Deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . v) Provision for premium on Redemption of Foreign Currency Convertible Notes (FCCN) . . . . . . . . . . . . . . . vi) Proposed dividend and tax thereon . . . . . . . . . . . . . . . . vii) Interest / commitment charges accrued on loans but not due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii) Liability towards Investors Education and Protection Fund (under Section 205C of the Companies Act, 1956 not due) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05 2006-07 2005-06 2004-05

57.5 1,026.6 653.2 188.0

65.4 158.0

6.2

2.5

2,157.4

F-80

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (contd.)
(B) Secondary Segment Year Ended March 31, 2006 2007 (in Rs. Millions)

2005

2007 (in U.S. $ Millions) 6,141.8 1,317.7 7,459.5 4,848.9 456.6 5,305.5 630.3 23.5 653.8

Revenue from external customers Within India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Outside India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Carrying amount of segment assets Within India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Outside India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Capital expenditure Within India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Outside India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

168,707.4 26,904.1 195,611.5 100,294.9 25,309.5 125,604.4 9,300.5 388.6 9,689.1

196,742.5 40,952.0 237,694.5 139,940.0 22,044.5 161,984.5 13,930.9 702.5 14,633.4

266,983.7 57,280.4 324,264.1 210,782.6 19,849.5 230,632.1 27,398.2 1,021.6 28,419.8

(B) Notes to the profit and loss account :

Year Ended March 31, 2006 2007 2007 (in Rs. Millions) (in U.S. $ Millions) 1,649.8 1,476.6 3,126.4 30.0 636.3 2,460.1 1,859.8 3,004.3 4,864.1 213.5 592.5 4,058.1 42.8 69.1 111.9 4.9 13.6 93.4

2005

(1) Interest: (i) Discounting charges (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less (i) Transferred to Capital Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (ii) Interest received on bank and other accounts . . . . . . . . . . . . . . . . . . . . .

1,410.8 980.4 2,391.2 29.6 665.0 1,696.6

F-81

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (contd.) (B) Notes to the profit and loss account (contd.): (2) (a) Defined benefit plans / Long term compensated absencesAs per actuarial valuations as on March 31, 2007 (Refer page F-84 for amounts in US $)
( in Rs. Millions) Postretirement Medicare BKY / scheme PSY 26.9 32.2 168.9 228.0 4(c) 14.7 26.6 51.8 93.1 4(c)

Particulars i Components of employer expense Current Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . Past service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actuarial losses/(Gains) . . . . . . . . . . . . . . . . . . . . . . . . . . Total expense recognised in the Statement of Profit & Loss Account in Schedule B . . . . . . . . . . . . . . . . . . . . under item: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii Actual Contribution and Benefit Payments for year ended March 31, 2007 Actual benefit payments . . . . . . . . . . . . . . . . . . . . . . . . . . Actual Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii Net asset/(liability) recognised in balance sheet as at March 31, 2007 Present value of Defined Benefit Obligation . . . . . . . . . . Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . Net asset/(liability) recognised in balance sheet . . . . . . iv Change in Defined Benefit Obligations (DBO) during the year ended March 31, 2007 Present Value of DBO at beginning of year . . . . . . . . . . . Current Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Plan amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actuarial (gains)/ losses . . . . . . . . . . . . . . . . . . . . . . . . . . Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Present Value of DBO at the end of year . . . . . . . . . . . v Change in Fair Value of Assets during the year ended March 31, 2007 Plan assets at the beginning of year . . . . . . . . . . . . . . . . . Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . Actual Company contributions . . . . . . . . . . . . . . . . . . . . . Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Plan assets at the end of the year . . . . . . . . . . . . . . . . . . vi Actuarial Assumptions Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . Salary escalation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Medical cost inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii The major categories of plan assets as percentage to total plan assets Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Balances with banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii Effect of one percentage point change in assumed Medical inflation rate Revised DBO as at March 31, . . . . . . . . . . . . . . . . . . . . . Revised service cost for 2006-07 . . . . . . . . . . . . . . . . . . . Revised interest cost for 2006-07 . . . . . . . . . . . . . . . . . . .

Gratuity 141.4 210.2 (239.0) 687.8 800.4 4(b)

Superannuation 44.5 84.6 (57.6) (55.6) 15.9 4(b)

Compensated absences 128.3 71.7 (2.5) 367.7 565.2 4(a)

395.5 881.4

265.7 205.5

204.6 N/A

33.4 N/A

29.0 N/A

3,622.4 3,628.5 6.1

1,104.0 703.6 (400.4)

1,464.0 (1,464.0)

614.8 (614.8)

411.0 (411.0)

2,823.2 141.4 210.2 843.1 (395.5) 3,622.4

1,340.7 44.5 84.6 (100.1) (265.7) 1,104.0

1,103.5 128.3 71.7 (7.2) 372.4 (204.7) 1,464.0

420.2 26.9 32.2 168.9 (33.4) 614.8

346.9 14.7 26.6 51.8 (29.0) 411.0

2,769.1 394.3 860.6 (395.5) 3,628.5 8.50% 8.00% 4% 7.5% N/A 53% 47%

750.7 13.1 205.5 (265.7) 703.6 8.00% 8.00% N/A N/A 73% 27%

N/A N/A N/A N/A N/A 8.50% N/A 4% 7.5% N/A N/A N/A

N/A N/A N/A N/A N/A 8.50% N/A N/A 4.00% N/A N/A

N/A N/A N/A N/A N/A 8.50% N/A 4% 7.5% N/A N/A N/A

One percentage point increase in Medical inflation rate 677.8 29.7 35.5

One percentage point decrease in Medical inflation rate 560.0 24.7 29.3

F-82

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (contd.) (B) Notes to the profit and loss account (contd.): a) Defined Contribution Plans The Companys contribution to defined contribution plan aggregated Rs.1,346.2 Millions for the year ended March 31, 2007 has been recognised in the statement of Profit and Loss Account under item 4 (b) in Schedule 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. 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. 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 per revised AS-15 :
Gross Tax Net (Rs. In Millions) 40.1 (13.5) 26.6 (70.7) 23.8 (46.9) (249.0) 83.9 (165.1) 449.9 (151.5) 298.4 170.3 (57.3) 113.0

b) c) d)

Gratuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Superannuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BKY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ex Gratia on retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-83

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (contd.) (B) Notes to the profit and loss account (contd.): (2) (a) Defined benefit plans / Long term compensated absencesAs per actuarial valuations as on March 31, 2007
( in U.S. $ Millions) Postretirement Medicare BKY / scheme PSY 0.6 0.7 3.9 5.2 4(c) 0.3 0.6 1.2 2.1 4(c)

Particulars i Components of employer expense Current Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . Past service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actuarial losses/(Gains) . . . . . . . . . . . . . . . . . . . . . . . . . . . Total expense recognised in the Statement of Profit & Loss Account in Schedule B . . . . . . . . . . . . . . . . . . . . under item : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii Actual Contribution and Benefit Payments for year ended March 31, Actual benefit payments . . . . . . . . . . . . . . . . . . . . . . . . . . Actual Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii Net asset/(liability) recognised in balance sheet as at March 31, 2007 Present value of Defined Benefit Obligation . . . . . . . . . . . Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . Net asset/(liability) recognised in balance sheet . . . . . . iv Change in Defined Benefit Obligations (DBO) during the year ended March 31, 2007 Present Value of DBO at beginning of year . . . . . . . . . . . Current Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Plan amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actuarial (gains)/ losses . . . . . . . . . . . . . . . . . . . . . . . . . . . Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Present Value of DBO at the end of year . . . . . . . . . . . . v Change in Fair Value of Assets during the year ended March 31, 2007 Plan assets at the beginning of year . . . . . . . . . . . . . . . . . . Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . Actual Company Contributions . . . . . . . . . . . . . . . . . . . . . Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Plan assets at the end of the year . . . . . . . . . . . . . . . . . . vi Actuarial Assumptions Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . Salary escalation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Medical cost inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii The major categories of plan assets as percentage to total plan assets Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Balances with banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii Effect of one percentage point change in assumed Medical inflation rate Revised DBO as at March 31, . . . . . . . . . . . . . . . . . . . . . . Revised service cost for 2006-07 . . . . . . . . . . . . . . . . . . . . Revised interest cost for 2006-07 . . . . . . . . . . . . . . . . . . .

Gratuity 3.3 4.8 (5.5) 15.8 18.4 4(b)

Superannuation 1.0 1.9 (1.3) (1.3) 0.3 4(b)

Compensated absences 3.0 1.6 (0.1) 8.5 13.0 4(a)

9.1 20.3

6.1 4.7

4.7 N/A

0.8 N/A

0.7 N/A

83.3 83.5 0.2

25.4 16.2 (9.2)

33.7 (33.7)

14.1 (14.1)

9.5 (9.5)

64.9 3.3 4.8 19.4 (9.1) 83.3

30.8 1.0 1.9 (2.3) (6.1) 25.3

25.4 3.0 1.6 (0.2) 8.6 (4.7) 33.7

9.7 0.6 0.7 3.9 (0.8) 14.1

8.0 0.3 0.6 1.2 (0.7) 9.4

63.7 9.1 19.8 (9.1) 83.5 8.50% 8.00% 4% 7.5% N/A 53% 47%

17.3 0.3 4.7 (6.1) 16.2 8.00% 8.00% N/A N/A 73% 27%

N/A N/A N/A N/A N/A 8.50% N/A 4% 7.5% N/A N/A N/A

N/A N/A N/A N/A N/A 8.50% N/A N/A 4.00% N/A N/A

N/A N/A N/A N/A N/A 8.50% N/A 4% 7.5% N/A N/A N/A

One percentage point increase in Medical inflation rate 15.6 0.7 0.8

One percentage point decrease in Medical inflation rate 12.9 0.6 0.7

F-84

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (contd.) (B) Notes to the profit and loss account (contd.): a) Defined Contribution Plans The Companys contribution to defined contribution plan aggregated US $ 31.0 Millions for the year ended March 31, 2007 has been recognised in the statement of Profit and Loss Account under item 4 (b) in Schedule B. b) c) d) 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. 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. 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 per revised AS-15:
Gross Tax Net (in US $ Millions) 0.9 (0.3) 0.6 (1.6) 0.5 (1.1) (5.7) 1.9 (3.8) 10.3 (3.5) 6.8 3.9 (1.4) 2.5

Gratuity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Superannuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BKY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ex Gratia on retirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F-85

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT 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 as on March 31, 2007
( in Rs. Millions) i Components of employer expense Current service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actuarial losses/(gains) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total expense recognised in the Statement of Profit & Loss Account in Schedule B under item 4 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actual Contribution and Benefit Payments for year ended March 31, 2007 Actual benefit payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net asset/(liability) recognised in Balance Sheet as at March 31, 2007 Present value of Defined Benefit Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Net asset/(liability) recognised in Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change in Defined Benefit Obligations during the year ended March 31, 2007 Present value of DBO at the beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Current service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actuarial losses/(gains) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exchange fluctuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Present Value of DBO at the end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Change in Fair Value of Assets during the year ended March 31, 2007 Plan assets at the beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Acquisition adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actual Company Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Plan assets at the end of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Actuarial Assumptions Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Salary escalation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Medical cost inflation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158.8 62.5 235.1 456.4 94.3 1,496.3 (1,496.3) 1,137.3 158.8 62.5 235.1 (94.3) (3.1) 1,496.3 N/A N/A N/A N/A N/A N/A 5.00% N/A 7.00% N/A (in U.S. $ Millions) 3.7 1.4 5.4 10.5 2.2 34.4 (34.4) 26.2 3.7 1.4 5.4 (2.2) (0.1) 34.4 N/A N/A N/A N/A N/A N/A 5.00% N/A 7.00% N/A

ii iii

iv

vi

Effective April 1, 2006, the Company adopted the revised Accounting Standard on Employee Benefits. Pursuant to the adoption Rs. 266.8 Millions (US $ 6.1 Millions) [(net of tax Rs. 101.2 Millions) (US $ 2.3 Millions)] has been adjusted to general reserve.

F-86

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (contd.) (B) Notes to the profit and loss account (contd.): (3) Earnings Per Share:
2005 (a) Profit for the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) The weighted average number of Ordinary Shares for Basic EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) The nominal value per Ordinary Share . . . . . . . . . . . . . . (d) Earnings Per Share (Basic) . . . . . . . . . . . . . . . . . . . . . . . (e) Profit for the year for Basic EPS . . . . . . . . . . . . . . . . . . . Add:Interest payable on outstanding Foreign Currency Convertible Notes . . . . . . . . . . . . . . . . . . . . . . . . . . (f) Profit for the year for Diluted EPS . . . . . . . . . . . . . . . . . (g) The weighted average number of Ordinary Shares for Basic EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (h) Add: Adjustment for Options relating to warrants, fractional coupons and Foreign Currency Convertible Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (j) The weighted average number of Ordinary Shares for Diluted EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (k) Earnings Per Share (Diluted) . . . . . . . . . . . . . . . . . . . . . . Rs. Millions 13,853.4 Year Ended March 31, 2006 2007 17,280.9 2007

21,699.9 U.S. $ Millions 499.2

Nos. 359,837,353 376,804,863 384,544,205 Rupees 10 10 10 Rupees 38.50 45.86 56.43 U.S.$ 1.3 Rs. Millions 13,853.4 17,280.9 21,699.9 U.S. $ Millions 499.2 Rs. Millions Rs. Millions 90.5 13,943.9 101.8 17,382.7 99.4 U.S. $ Millions 2.3 21,799.3 U.S. $ Millions 501.5

Nos. 359,837,353 376,804,863 384,544,205

Nos.

26,719,121

26,042,196

22,622,790

Nos. 386,556,474 402,847,059 407,166,995 Rupees 36.07 43.15 53.54 Year Ended March 31, 2006 2007

U.S.$1.23

2005 (in Rs. Millions) (4) Other Provision includes : (a) Product warranty Opening Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . Add: Provision for the year (net) (including additional provision for earlier years) . . . . . . . . . Less: Payments / debits (net of recoveries from suppliers) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Closing Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2007

( in U.S.$ Millions)

1,592.3 1,853.9 (1,667.5) 1,778.7

1,778.7 1,756.3 (1,752.5) 1,782.5

1,782.5 2,413.3 (2,037.2) 2,158.6

41.0 55.5 (46.9) 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . Add: Provisions for the year # . . . . . . . . . . . . . . . . . Add / (Less): Foreign currency exchange difference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Less: Reversal due to conversion of FCCN . . . . . . . Closing Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . #

15.3 2,920.7 2,936.0

2,936.0 58.7 (12.7) 2,982.0

2,982.0 (70.0) (69.5) 2,842.5

68.6 (1.6) (1.6) 65.4

Consequent to Accounting Standard 29 becoming applicable from April 1, 2004, the premium payable on redemption of FCCN was fully provided and debited to Securities Premium Account (SPA) in the year 2004-05 as against the past practice of providing on pro-rata basis and 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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SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT 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) b) c) Advance received is Rs. 24.9 Millions (as at March 31, 2006 Rs. 57.6 Millions and as at March 31, 2005 Rs. Nil) Retention money is Rs. 55.3 Millions (as at March 31, 2006 Rs. 36.3 Millions and as at March 31, 2005 Rs. Nil) Contract revenue recognised during the year is Rs. 599.0 Millions (2005-06 Rs. 485.2 Millions and 2004-05 Rs. 415.6 Millions) 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)

d)

(6) The share of profit / (loss) in respect of investments in associate companies include the figures which are considered 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 :
Profit / (Loss) for the Share in Post-acquistion Reserves year ended and Profit and Loss Account upto March 31, March 31, 2005 2006 2007 2005 2006 2007 ( in Rs. Millions) ( in Rs. Millions) 22.8 102.8 (2.7) 161.0 128.6 (90.8) 20.4 28.3 12.0 12.5 6.1 11.8 7.0 9.2 (7.7) (23.4)* (23.4) (7.7) (14.8)* * (52.4)* (31.1)* (31.1) * * * (7.8) (5.6) 169.2 53.4 131.9 * The share of loss restricted to carrying cost of investment. 67.0 (17.1) 206.7 127.2 (69.1)

Name of the Associate Tata AutoComp Systems Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tata Securities Pvt. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TSR Darashaw Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hispano Carrocera, S. A. (from March 16, 2005) . . . . . . . . . . . . . . Tata Precision Industries Pte. Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . Telcon Ecoroad Resurfaces Private Ltd. . . . . . . . . . . . . . . . . . . . . . Tata International Ltd. (upto February 28, 2005) . . . . . . . . . . . . . . .

(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 and Service 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 books of account in the year 2004-05. (9) The Company made further investment of Rs. 92.4 Millions on October 21, 2004 in Tata Motors Insurance Services Limited [formerly known as Concorde Motors Ltd. (CML)] by way of purchase of shares from Tata Finance Ltd. and Tata Industries Ltd. Consequently, Tata Motors Insurance Services Limited (formerly known as Concorde Motors Ltd. (CML) has become 100% subsidiary of the Company.

F-88

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT 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 the approval of High Court of Judicature at Mumbai, TAL Manufacturing Solutions Ltd, a subsidiary, in the year 2004-05 adjusted against Share Capital, the balance in the miscellaneous expenditure of Rs. 37.8 Millions, employee separation cost of Rs. 21.5 Millions, other expenses of Rs. 9.1 Millions and the debit balance 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 Honble High Court of Judicature at Mumbai, Tata Finance Ltd. (TFL) whose core business was providing finance for commercial vehicles, passenger cars and construction equipments was amalgamated 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.4,10,00,00,000 divided into 41,00,00,000 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 of accounting for amalgamation after making adjustments to ensure uniform set of accounting policies as stated 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 of 18,13,11,857 Equity Shares of TFL, in the ratio of 8 Shares of the Company of Rs.10 each for every 100 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 was transferred to General Reserves and an amount of Rs.204.7 Millions (net of deferred tax) was adjusted to the General Reserves to ensure uniform set of accounting policies, in respect of some of the items of TFL. (e) the reserves of TFL were incorporated in the Companys 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.1,500 Millions was fully adjusted against the investments of the Company in the said Capital.

(g) the difference of Rs.1,853.0 Millions between the amounts recorded as Equity Share Capital to be issued to TFL shareholders and the amount of the Equity Share Capital of TFL was credited to the General Reserve of the Company. (h) Arrears of dividend on cumulative preference shares of TFL was provided from the brought forward profits of the Company. (2) In terms of the Scheme of Amalgamation (Scheme) sanctioned by order dated June 29, 2005, of Honble High 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 amalgamated with the Company with effect from April 1, 2005. F-89

SCHEDULES FORMING PART OF THE CONSOLIDATED BALANCE SHEET AND PROFIT 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 with effect from April 1, 2005 and were recorded at their respective carrying values under the pooling of interest method of accounting for amalgamation after making adjustments to ensure uniform set of accounting 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 debit balance of Rs. 0.1 Million of SCFL were transferred to General Reserve of the Company and an amount of Rs. 0.8 Million was adjusted to the General Reserves to ensure uniform 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 Million and Rs. 0.5 Million respectively were adjusted against the cost of investment of the Company in the equity share capital of TDDL and SCFL respectively, and the balance cost of investment of Rs. 446.1 Millions and Rs. 7.7 Million of the Company in the equity share capital of TDDL and SCFL respectively, were adjusted against the reserves 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 and the Revaluation Reserve of Rs. 268.2 Millions were recorded in the Companys books in the same form. (3) Tata Technologies Inc., USA, an indirect subsidiary of the Company acquired during the year 2005-06 INCAT International Plc. (INCAT), a UK based company engaged in the business of Product Lifecycle Management, engineering and design, IT software and infrastructure services and solutions, rendering services 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 Company Limited upto January 20, 2006. This investment has not been accounted for as an associate as per AS-23, as the 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 erstwhile TFL for the period April 1, 2005 to March 31, 2006, of INCAT International Plc. (INCAT) for the period October 3, 2005 to March 31, 2006, of Tata Technologies (Thailand) Limited. (TTL Thailand) for the period October 10, 2005 to March 31, 2006, and Tata Technologies Pte. Limited, Singapore (TTPL Singapore) for the 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 for the entire year and as such, the financial results for the years ended March 31, 2007, March 31, 2006 and March 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 of the T.T. (telegraphic transfer) buying and selling rates as on March 30, 2007 as quoted by the State Bank of India. (8) The figures disclosed in the Consolidated Financial Statements are extracted from the audited Indian Statutory Accounts 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 F-90

SCHEDULE FORMING PART OF THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT SCHEDULE 14 (Contd.) auditors, viz, Messers Deloitte Haskins & Sells, (joint auditors Messers A.F.Ferguson & Co, and Messers S.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/-

F-91

REGISTERED OFFICE OF THE ISSUER Tata Motors Limited Bombay House, 24 Homi Mody Street Mumbai 400 001 India www.tatamotors.com TRUSTEE Citibank, N.A., London Branch Citigroup Centre, 14th Floor Canada Square, Canary Wharf London E14 5LB PRINCIPAL PAYING, CONVERSION AND TRANSFER AGENT Citibank, N.A., London Branch Citigroup Centre, 21st Floor Canada Square, Canary Wharf London E14 5LB LEGAL ADVISORS To the Issuer as to Indian law AZB & Partners Express Towers, 23rd Floor Nariman Point Mumbai 400 021 India To the Initial Purchasers as to Indian law Talwar Thakore & Associates Hague Building 9 Sprott Road Ballard Estate Mumbai 400 001 India AUDITORS OF THE ISSUER Deloitte Haskins & Sells Maker Towers E, 4th Floor Cuffe Parade Mumbai 400 005 India as to United States law Linklaters LLP One Silk Street London EC2Y 8HQ United Kingdom as to United States law Sullivan & Cromwell LLP 28th Floor Nine Queens Road Central Hong Kong

US$490,000,000 Zero Coupon Convertible Alternative Reference Shares due 2012 Convertible into Qualifying Securities, Ordinary Shares or American Depositary Shares Representing Ordinary Shares Issue Price: 100%

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