Tata Motors Ltd Directors Report.

TO THE MEMBERS OF TATA MOTORS LIMITED

The Directors present their Seventy Sixth Annual Report along with the Audited Financial Statement of Accounts for the FY 2020-21.

FINANCIAL RESULTS

(Rs in crores)

PARTICULARS

Standalone*

Consolidated

FY 2021 FY 2020 FY 2021 FY 2020
Revenue from operations 47,031.47 43,928.17 2,49,794.75 2,61,067.97
Total expenditure 44,629.62 43,510.11 2,14,012.84 2,37,153.67
Operating profit 2,401.85 418.06 35,781.91 23,914.30
Other Income 842.96 1,383.05 2,643.19 2,973.15
Profit before interest, foreign exchange, depreciation, amortization, exceptional item and tax 3,244.81 1,801.11 38,425.10 26,887.45
Finance cost 2,358.54 1,973.00 8,097.17 7,243.33
Profit before depreciation, amortization, exceptional item, foreign exchange and tax 886.27 (171.89) 30,327.93 19,644.12
Depreciation, amortization and product development/ engineering Expenses 4,589.25 4,205.53 28,773.34 25,613.92
Foreign exchange (gain)/loss (net) 1.67 239.00 (1,732.15) 1,738.74
Profit/(loss) before exceptional items and tax (3,704.65) (4,616.42) 3,286.74 (7,708.54)
Exceptional Items - (gain) / loss (net) (1,392.08) 2,510.92 13,761.02 2,871.44
Profit/(loss) before tax (2,312.57) (7,127.34) (10,474.28) (10,579.98)
Tax expenses/ (credit) (net) 82.87 162.29 2,541.86 395.25
Profit/(loss) after tax (2,395.44) (7,289.63) (13,016.14) (10,975.23)
Share of profit of joint venture and associates (net) - - (378.96) (1,000.00)
Profit/(loss) for the year (2,395.44) (7,289.63) (13,395.10) (11,975.23)
Other comprehensive income/(loss) 442.99 (378.72) 2,919.34 11,504.47
Total Other comprehensive income/(loss) for the year (1,952.45) (7,668.35) (10,475.76) (470.76)
Attributable to:
Shareholders of the Company - - (10,551.20) (578.88)
Non-controlling interest - - 75.44 108.12

* These include the Companys proportionate share of income and expenditure in its two joint operations, namely Tata Cummins Pvt. Ltd. and Fiat India Automobiles Pvt. Ltd.

DIVIDEND

In view of losses for FY 2020-21, we regret that no dividend can be paid to the Members as per the provisions of the Companies Act, 2013 (the Act) and the Rules framed thereunder.

TRANSFER TO RESERVES

Due to losses in FY 2020-21, no amount has been transferred to Reserves. An amount of 134 crores was transferred from Debenture Redemption Reserve to Retained earnings.

FINANCIAL PERFORMANCE AND STATE OF THE COMPANYS AFFAIRS

Operating Results and Profits

Tata Motors Limited consolidated revenue from operations was 2,49,795 crores in FY 2020-21, 4.3% lower than 2,61,068 crores in FY 2019-20.

The consolidated EBITDA margin was at 12.2% in FY 2020-21 as compared to 8.5% in FY 2019-20. EBIT margin stood at 2.6% in FY 2020-21 as compared to (0.04)% for FY 2019-20. Loss for the period (including share of associates and joint ventures) stood at 13,395 crores in FY 2020-21 as compared to 11,975 crores in FY 2019-20.

The free cash flow (auto) was inflow of 5,317 crores in FY 2020-21 compared to outflow of 12,676 crores for FY 2019-20.

Refer Management Discussion and Analysis (MD&A) Report para Operating Results for detail analysis.

Tata Motors Limited recorded revenue from operations (including joint operations) of 47,031 crores in FY 2020-21, 7.1% higher than 43,928 crores in FY 2019-20. Loss before and after tax (including joint operations) for FY 2020-21 were at 2,313 crores and 2,395 crores, respectively as compared to Loss before and after tax (including joint operations) of 7,127 crores and 7,290 crores, respectively for FY 2019-20. The financial performance improved mainly due to better volumes, improved product mix, lower VME and cost savings offset partially by commodity inflation and impact of COVID-19 pandemic.

Jaguar Land Rover (JLR), (as per IFRS) recorded revenue of GB19.7 billion in FY 2020-21 compared to GB23.0 billion in FY 2019-20, down by 14.2%. Wholesales (excluding CJLR) declined by 27.0% year-on year, primarily as a result of the impact of coronavirus affecting all key regions except for China where wholesales grew 23.1% year on year. The reduction in revenue was much lower than the decline in wholesales, reflecting the strong favourable sales mix and higher average revenue

per vehicle during the year. Profit before tax and exceptional items was 662 million in FY 2020-21, significantly improved on the loss before tax and exceptional items of 393 million in FY 2019-20, reflecting the higher EBIT as well as favourable revaluation of unrealised hedges JCRs foreign currency debt, partially offset by higher net finance expense as a result of the increase in indebtedness. The announcement of our Reimagine Strategy in February 2021 triggered 1.5 billion of total exceptional charges in the fourth quarter comprising one-time non-cash write downs of 952 million for products that will not now be completed and 534 million of restructuring and other costs. After exceptional charges, the loss before tax for FY 2020-21 was 861 million, compared to the loss before tax of 422 million in FY 2019-20, which included 29 million of exceptional charges.

VEHICLE SALES AND MARKET SHARES

The Tata Motors Group sales for the year stood at 8,37,783 vehicles, down by 12.9% as compared to FY 2019-20. Global sales of all Commercial Vehicles were 2,67,513 vehicles, while sales of Passenger Vehicles were at 5,70,270 vehicles.

Refer MD&A para Overview of Automotive Operations for detail analysis. TATA MOTORS

Tata Motors recorded sales of 4,63,742 vehicles, a growth of 4.4% over FY 2019-20, whereas the Indian Auto Industry volumes declined by 6.1%. The Companys market share (calculated on wholesales) increased to 14.1% in FY 2020-21 from 12.7% in FY 2019-20.

Commercial Vehicles (CV)

The domestic CV industry volume experienced a drop of 21.7% in FY 2020-21, after shrinking by 30.0% in FY 2019-20. The successive drop in FY 2019-20 and FY 2020-21 is attributed to a slew of challenges that included tapering of overall economic growth, increased axle load norms, BS4 to BS6 transition and the pandemic-induced lockdown. After hitting the bottom in H1 FY 2020-21, the CV industry demonstrated a good rebound in Q3 and Q4 FY 2020-21, led by M&HCVs and ILCVs with economy picking up gradually.

Amidst industry-wide shortage of semiconductors and steel price increase in H2 FY 2020-21, the Companys CV business managed to ramp up volumes and improve market share in H2 FY 2020-21. Overall Tata Motors CV Business sales in the domestic market for FY 202021, witnessed a decline of 22.6% with 2,41,668 units sold. All the four segments saw a decline in volume with the CV passenger segment being the worst hit. TML CV Business improved its Net promoter score (NPS), a customer loyalty and satisfaction measurement, from a high base of 65 in FY 2019-20 to 68 in FY 2020-21.

Refer MD&A para Commercial Vehicles in India for detail analysis.

Passenger Vehicles (PV)

Domestic PV industry witnessed a decline of 2% in FY 2020-21 as compared to FY 2019-20. Lockdown imposed by Government of India to arrest the spread of COVID-19 had deeply impacted the Industry which de-grew by 78% in Q1 FY 2020-21. Markets started opening up post partial lifting of lockdown in May 2020. Post unlock 1.0, Industry has witnessed a consistent growth on account of pent-up demand, increasing preference for personal mobility, good traction from rural sector owing to good rabbi harvest post festive season, new launches and continued financing support with attractive interest rates and innovative financing schemes.

The Company registered growth of 68.5% in FY 2020-21 vis-a-vis FY 2019-20 with a total volume of 2,22,074 units. The market share (calculated on wholesales) for FY 2020-21 was 8.2%, an increase of 340 basis points from FY 2019-20. The Company posted its highest ever sales in 9 years, for both the month as well as the quarter ended March 31, 2021. For FY 2020-21, the business registered its highest ever annual sales in 8 years. The growth has come on the back of phenomenal response received for the New Forever range and series of transformative actions taken including, focused and agile marketing to improve the share of voice, channel management transformation to earn dealer trust and revamp dealer profitability, introduction of variants of existing models with aspirational features at accessible price points to expand the customer base, synchronization of daily retail, offtake and production enabling fast cash rotation for channel partners and for Company, focused actions in identified micro-markets to achieve step jump in market share. In addition, expeditious ramping up of supplies by debottlenecking of capacities, sweating of in-house as well as supplier end assets and augmenting of supplier capacity supported the growth.

In January 2021, the Company launched its premium flagship SUV - the all-new Safari. An arresting design, unparalleled versatility, plush and comfortable interiors and powerful performance of the Safari perfectly cater to the modern, multifaceted lifestyle of the new age SUV customers and their desire for the perfect combination of prestige and sophistication along with expression and thrill. Safari had received excellent response from the market with 9,000 bookings till March 2021. Launch of Safari had a positive rub-off on the demand of Harrier which has witnessed consistent increase in bookings from 3,536 in January 2021 to 3,655 in March 2021.

Exports

CV exports for the month of March 2021 closed at 3,654 units, highest since September 2019. FY 2020-21 exports closed at 20,283 units, 31.6% below previous year. Lockdowns imposed in all export markets to arrest the spread of COVID-19 deeply impacted the overall commercial vehicle Industry. Retails for FY 2020-21 closed at 24,105 units, a decline of 35% with respect to previous year. However the Company gained market share in almost all it its major markets, including Bangladesh, Nepal, key markets of Sub Saharan Africa and Middle East region compared to the previous year.

Passenger Vehicle exports for FY 2020-21 closed at 566 units, decline of 61.8% w.r.t. previous year, largely impacted due to COVID-19 pandemic. Retails for FY 2020-21 closed at 980 units, decline of 39.9% with report to previous year.

Refer MD&A para Tata Commercial Vehicles and Tata Passenger Vehicles — Exports for detail analysis.

JAGUAR LAND ROVER (JLR)

JLR retail sales were 4,39,588 vehicles in FY 2020-21, down 69,071 vehicles (13.6%) year-on-year. The decline in retails was primarily the result of the initial COVID-19 lockdown impacting the first quarter, with a recovery in sales thereafter. Retail sales in China increased by 23.4% year-on-year, as the region continued to recover strongly from the impact of COVID-19 following easing of strict lockdown measures from early 2020. Retails across all other regions declined significantly year- on-year, including Overseas (26.8%), Europe (26.0%), the UK (22.2%) and North America (14.3%), as strict social distancing measures were enforced through the first quarter and subsequently reintroduced in many markets through the third and fourth quarters. Furthermore, COVID-19 impacted sales of every model in FY 2020-21, apart from the newly introduced Land Rover Defender which retailed a total of 45,244 vehicles in FY 2020-21. JLR wholesales (excluding the China joint venture) were 3,47,632 vehicles in FY 2020-21, down 27.0% compared to FY 2019-20.

Refer MD&A para JLR for detail analysis on wholesale and retail sales volumes.

Some of the key highlights of FY 2020-21 were:

• The new Land Rover Defender went on sale at the beginning of the year with retails reaching 45,244 vehicles in FY 2020-21. In addition to the 110 wheelbase variant, launched first, a shorter wheelbase 90 is also now on sale with commercial variants and a V8 derivative also launched this fiscal year.

• The new Land Rover Defender won a number of awards during the year including the coveted 2021 World Car Design of the year, Top Gear car of the year and Production Car design of the year.

• A number of 2021 model year upgrades were launched in the year including special edition Range Rover and Range Rover Sport, Range Rover Velar, Land Rover Discovery, Jaguar XE, XF, F-PACE and E-PACE.

• Twelve of JLRs models now have an electrified option, including eight with plug-in hybrid, 11 with mild hybrid and the all-electric Jaguar I-PACE. Furthermore, 51% of retails in FY 2020-21 were electrified.

• Production of a 6 cylinder Ingenium 3.0-litre diesel engine (including with mild hybrid technology) started during the year at the EMC in Wolverhampton (UK).

• New Jaguar F-TYPE heritage 60 edition launched to celebrate the diamond anniversary of the legendary Jaguar E-TYPE.

• A number of initiatives during the year to support the fight against COVID-19 including the production of protective visors for the NHS, deployment of over 350 vehicles to support the emergency responses, provision of extensive onsite testing and the ongoing NHS Workplace Vaccination Programme pilot at the Solihull plant.

Tata Daewoo Commercial Vehicle Company Limited (TDCV)

The consolidated revenue of TDCV was increased by 5.8% to 3,316 crores in FY 2020-21 from 3,134 crores in FY 2019-20. Overall sales decreased by 1.21% to 5,127 units in FY 2020-21 from 5,190 units in FY 2019-20 mainly due to lower export sales which was largely affected by worldwide disruption hit by COVID-19 pandemic.

Refer MD&A para Tata Commercial Vehicles and Tata Passenger Vehicles — Exports for detail analysis.

TMF Holdings Limited (TMFHL)

Despite FY 2020-21 witnessing several challenges including transition to BS6, low growth in rural wages and the crippling impact of COVID-19 pandemic from mid-March, TMF Group Assets Under Management (aUM) grew by 16% Y-o-Y to 42,810 crores, as against 36,882 crores in the year earlier. CV market share improved by 201 bps to 33% in FY 2020-21. Consolidated Profit Before Tax for FY 2020-21 grew by 78% to 266 crores as against 149 crores in FY 2019-20.

Refer MD&A para Tata and other brand vehicles - Vehicles Financing for detail analysis.

SHARE CAPITAL

The Company in FY 2019-20 allotted 20,16,23,407 Ordinary Shares at a price of 150 per Ordinary Shares aggregating to 3,024 crores and 23,13,33,871 Convertible Warrants ("Warrants"), each carrying a right to subscribe to one Ordinary Share per Warrant, at a price of 150 per Warrant ("Warrant Price"), aggregating to 3,470 crores on a preferential basis to Tata Sons Private Limited and an amount equivalent to 25% of the Warrant price was paid at the time of subscription. During FY 2020-21, balance 75% of the Warrant Price was paid by the Warrant Holder against each Warrant pursuant to exercise of the options attached to the Warrants and 23,13,33,871 Ordinary Shares were allotted to Tata Sons Private Limited. As at March 31, 2021, an amount of 2,602.51 crores has been received and is to be utilized for repayment of debt, meeting future funding requirements and other general purposes of the Company and its subsidiaries.

ISSUE OF DEBENTURES

During the year, the Company has issued and allotted on private placement basis, secured, listed, redeemable, non- convertible Debentures (NCDs) aggregating 1,000 crores.

FINANCE

Amid the challenging environment, further impacted by COVID-19 pandemic, the Company and JLR maintained its finances prudently, meeting the business needs as well as ensuring reduction of net debt. The Company has sufficient liquidity to weather the demand shocks. As at March 31, 2021, the Companys liquidity (including Joint operations) was 7,897 crores (including undrawn credit facility of 1,000 crores), while JLRs liquidity was at 6.7 bn (including unutilized credit facility of 1.9 bn).

On account of general economic downturn and several headwinds, including COVID-19 pandemic, both the Company and JLR witnessed certain revisions in credit ratings.

Refer MD&A para Liquidity and Capital Resources for detail analysis.

Material Changes and Commitment affecting the Financial Position

The impact of COVID-19 on the Companys financial statements has been given in Note 2(d) of the Notes to financial statements for the year ended March 31, 2021 and the Companys response to the situation arising from this pandemic has been explained in the MD&A, which forms part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENT

The consolidated financial statements of the Company and its subsidiaries for FY 2020-21 are prepared in compliance with the applicable provisions of the Act and as stipulated under Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI Listing Regulations] as well as in accordance with the Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015. The audited consolidated financial statement together with the Independent Auditors Report thereon form part of this Annual Report. Pursuant to Section 129(3) of the Act, salient features of the financial statements of the Companys subsidiaries, associates and joint ventures is attached to the financial statements in Form no. AOC-1 which is also available on the Companys website. Pursuant to the provisions of Section 136 of the Act, the Company will make available the said financial statements of the subsidiary companies upon a request by any member of the Company or its subsidiary companies. The members can send an e-mail to inv rel@tatamotors.com upto the date of the AGM and the financial statements of the Company, Consolidated financial statements along with other relevant documents and the financial statements of the subsidiary companies would also be available on the Companys website URL: https://www.tatamotors.com/investors/annual-reports/

SUBSIDIARY, JOINT ARRANGEMENTS AND ASSOCIATE COMPANIES

The Company has 103 subsidiaries (14 direct and 89 indirect), 9 associate companies, 4 joint ventures and 2 joint operations as at March 31, 2021, as disclosed in the accounts.

During FY 2020-21, the following changes have taken place in subsidiary / associates / joint venture companies:

• JT Special Vehicles Private Limited, ceased to be joint venture and became a wholly-owned subsidiary, consequent to 50% share transfer from Jayem Automotive Private Limited w.e.f August 11, 2020.

• I n-Car Ventures Limited [Name changed from Lenny Insurance Limited w.e.f. February 2, 2021]. 100% shareholding transferred from InMotion Ventures Limited to Jaguar Land Rover Holdings Limited on February 18, 2021.

• Shareholding of InMotion Ventures Limited in InMotion Ventures 4 Limited, wholly owned subsidiary have reduced from 100% to 15% w.e.f December 1, 2020.

• Tata Technologies Europe Limited, 100% shareholding transferred from INCAT International PLC to Tata Technologies Pte. Limited (Singapore) w.e.f. May 27, 2020.

• Escenda Engineering AB name changed to Tata Technologies Nordics AB w.e.f. November 2, 2020. 100% shareholding transferred from Tata Technologies Europe Limited (UK) to Tata Technologies Pte. Limited (Singapore) w.e.f. August 26, 2020.

• Cambric GmbH was liquidated w.e.f September 17, 2020.

Transfer of Defence Undertaking to Tata Advanced Systems Limited: The Company transferred the Defence Undertaking pursuant to a Scheme of Arrangement as a going concern on a slump sale basis to Tata Advanced Systems Limited at an enterprise value of 209.27 crores (the Scheme). In FY 2019-20, the Company had received requisite approvals from the shareholders and National Company Law Tribunal. After meeting the pre-conditions prescribed under the Scheme, the Scheme became effective on April 1, 2021.

Transfer of Passenger Vehicles Undertaking to TML Business Analytics Services Limited: The Company proposes to transfer and vest of the Passenger Vehicles Undertaking Business (Passenger Vehicle Undertaking) pursuant to a Scheme of Arrangement as a going concern on a slump sale basis to TML Business Analytics Services Limited (TBASL), who holds directly or indirectly, 100% equity interest in TML Business Services Limited, for a lump sum consideration of 9,417 crores; and reduction of share capital of the Company without extinguishing or reducing its liability on any of its shares by writing down the securities premium account in part, which is lost or is unrepresented by available assets, with a corresponding adjustment to the accumulated losses amounting to 11,173.59 crores. The consideration shall be settled by TBASL through issuance of 941,70,00,000 equity shares of TBASL of 10 each. Your Company has received No Objection from the Stock Exchanges, Securities Exchange Board of India and requisite approvals from the Companys shareholders, secured creditors, etc. for the said transfer. Approvals from the National Company Law Tribunal (NCLT) and other statutory authorities are under process.

There has been no material change in the nature of business of the subsidiary companies.

The policy for determining material subsidiaries of the Company is available on the Companys website URL: https://investors.tatamotors. com/pdf/materiat.pdf

RISK MANAGEMENT

The Risk Management Committee is constituted to frame, implement and monitor the risk management plan of the Company.

The Board takes responsibility for the overall process of risk management throughout the organisation. Through an Enterprise Risk Management programme, our business units and corporate functions address risks through an institutionalized approach aligned to our objectives. This is facilitated by corporate finance. The Business risk is managed through cross-functional involvement and communication across businesses. The results of the risk assessment are presented to the senior management.

INTERNAL FINANCIAL CONTROL SYSTEMS AND ADEQUACY

The Companys internal control systems are commensurate with the nature of its business, the size and complexity of its operations and such internal financial controls with reference to the Financial Statements are adequate.

Refer MD&A para internal Control Systems and their Adequacy for detail analysis.

HUMAN RESOURCES

Refer MD&A para Human Resources / Industrial Relations for detail analysis.

Diversity and Inclusion

Diversity and Inclusion at workplace helps nurture innovation, by leveraging the variety of opinions and perspectives coming from employees with diverse age, gender and ethnicity. The Company has organized a series of sensitisation and awareness campaigns, to help create an open mind and culture to leverage on the differences. The network of Women@Work and the Diversity Council has widened to location councils as we move along the journey. Women development and mentoring programme have increased, with clear focus on nurturing their career journeys, to help the Company build a pipeline of women leaders in near future.

The Company employed 5.48% women employees in FY 2020-21 vis- a-vis 5.79% in FY 2019-20.

Prevention of Sexual Harassment

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules framed thereunder. Internal Committee is in place for all works and offices of the Company to redress complaints received regarding sexual harassment.

During FY 2020-21, the Company had received 1 complaint on sexual harassment which was subsequently withdrawn basis request from the complainant. The Company organized 95 instructor led awareness workshops across locations. In addition, certain employees were covered through e-module program of the Company.

Tata Motors Limited Employees Stock Option Scheme (the Scheme)

During FY 2020-21, there has been no change in the Scheme. There were no Options granted or vested or any shares issued on vesting during the year. There were 4,18,894 options which got forfeited / lapsed during the year. The Scheme is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulation, 2014. Appropriate disclosure prescribed under the said Regulations with regard to the Scheme is available on the Companys website URL: https://www.tatamotors.com/investors/ESOP/

Particulars of Employees

Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to the Report as Annexure-1.

Statement containing particulars of top 10 employees and the employees drawing remuneration in excess of limits prescribed under Section 197 (12) of the Act read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure forming part of this report. In terms of proviso to Section 136(1) of the Act, the Report and Accounts are being sent to the Shareholders, excluding the aforesaid Annexure. The said Statement is also open for inspection. Any member interested in obtaining a copy of the same may write to the Company Secretary. None of the employees listed in the said Annexure are related to any Director of the Company.

BUSINESS RESPONSIBILITY REPORT

Pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations, the Business Responsibility Report (BRR) on initiatives taken from an environmental, social and governance perspective, in the prescribed format is available as a separate section of the Annual Report and is also available on the Companys website URL: https://www.tatamotors. com/investors/annual-reports/

SAFETY & HEALTH - PERFORMANCE & INITIATIVES

In continuation of Safety Excellence Journey at the Company, the Organization achieved its 2nd consecutive Fatality Free Year in FY 2020-21.

During the year several proactive initiatives were undertaken by the Company viz. proactive monitoring of Leading Indicators (also known as Proactive Safety Index), focused training sessions on Risk perception and behaviour based safety, I-care for shop floor employees and Safety felt leadership for middle management. The Company also focused on identification of Critical to Safety workstations to target areas with high potential for accidents. In order to protect its employees, Company undertook Kaizen events to reduce driving related incidents across its Plant locations in FY 2020-21, which ultimately contributed in drastic reduction of driving related incidents at Companys Plant locations. Also, during the FY 2020-21, the Company strengthened its focus on Safety Processes of its Contractors and Vendors Employees, which resulted in reduction in number of Lost Time Injuries to Contractors and Vendor Employees. Due to exhaustive Safety review measures being undertaken by the Company before commencing its Plants operations which were closed due to COVID-19 outbreak, lead into smooth re-start of operations without any incidents.

In FY 2020-21, the Companys 7 Manufacturing Plants in India, Safety Performance reported were higher with Total Recordable Case Frequency Rate being 1.39, against 0.40 reported in FY 2019-20. Lost Time Injury Frequency Rate for the Companys 7 plants in FY 2020-21 was 0.26 as against 0.09 in FY 2020-21.

The Company has robust governance mechanism for safety, health, environment and sustainability where reviews are undertaken at multiple levels. The Safety, Health and Sustainability (SHS) Committee of Board is an apex review body, which reviews performances quarterly, followed by Business Unit (BU) Head level SHE Council which reviews monthly which percolates down to factory level by Apex Committee, various Sub-committees for Safety Standards and then the Factory Implementation committees (FIC). Also for Non-manufacturing areas, focused monthly reviews happen at regional offices with Customer Service and Warehouse teams.

During FY 2020-21, the Company rose through various challenges posed by COVID-19 pandemic. During the onset itself, the Company initiated a robust response to safeguard employees at its plants, offices and warehouses. Social distancing and sanitization norms were established as per World Health Organization (WHO) guidelines and comprehensive employee awareness programs were initiated. During the lockdown, Management engaged with its employees by creating awareness on COVID -19, preventive measures to be undertaken and facilities available for help by the Company. The management stayed in touch with its employees through health surveys, virtual meetings and interactive sessions on social media platforms, Employees Assistance Program - a confidential personalized self-help counselling service by qualified professional counsellors was launched in April 2020 by the

Company, which could be availed by its employees and their family members free of cost. The objective of said program was to support employees and dependents to cope up with the physical and mental challenges created by COVID-19. 670 employees contacted counsellors to address their issues. On-line sessions on emotional wellbeing were organized and approx. 3400 employees were benefitted. Robust surveillance diagnostic testing program with Rapid Antigen Test and RT-PCR for employees were carried out and maintained throughout pandemic within Companys Plant premises. Also several Companys HR policies on sickness benefits, Insurance benefits and leave policy were modified suitably in view of helping employees and dependents during epidemic.

The Company also collaborated with several Government hospitals, to provide COVID-19 vaccine free of cost to all its eligible employees, including third party contract employees. Due to Companys said initiative, till date approx. 10,000 people are vaccinated, which includes its employee and their family members, ex-employees, employees of Service Providers and employees of Suppliers. The Companys medical teams located at Plants supported employees and their dependents during COVID-19 pandemic by arranging beds/ medicines in hospitals and co-ordinated for plasma donation. The Company also donated medical equipment to Government healthcare providers through CSR program.

ENERGY & ENVIRONMENT

The Company has always been conscious of the need to conserve energy in its manufacturing plants and to protect environment. Energy conservation is achieved through optimized consumption of power and fossil fuels and improvements in energy productivity through Energy Conservation (ENCON) projects, which contributes in reduction in operational costs and climate change mitigation through reduction in greenhouse gases. The Company is also signatory to RE100 - a collaborative, global initiative of influential businesses committed to 100% renewable electricity, and is working towards increasing the amount of renewable energy generated in-house and procured from off-site sources.

In FY 2020-21, ENCON efforts contributed to energy savings of 1,16,000 GJ, avoided emission of 22,352 tCO2e and cost savings of 21.15 crore to the Company. In FY 2020-21, the Company generated / sourced 73.33 million kWh of renewable electricity for its manufacturing operations, which amounts to 20% of the total power consumption as compared to 21.6% in FY 2019-20 and also contributed in avoidance of emission of 60,860 tCO2e and financial saving of 21.10 crores. This is a significant achievement, considering disruptions in Plant operations due to COVID-19. The Company generates renewable energy (RE) in-house through rooftop solar PV (photovoltaic), off-site captive wind farms and through procurement of off-site wind and solar power through "Power Purchase Agreements" (PPAs). In FY 2020-21, the Company at its Pantanagar Plant enhanced its in-house RE capacity by 2MWp by rooftop Solar PV installation.

In FY 2020-21, the Company conserved a total of 11.47 lakh m3 of water through recycling effluent and rainwater harvesting, which is 27.1% of total water consumption as compared to 16.4% in FY 2019-20. In FY 2020-21, the Company sustained its efforts across Plants to divert hazardous waste from landfill / incineration and derive value from the same. Several Plants divert hazardous wastes for energy recovery through co-processing at cement Plants. The Company will continue this initiative to ultimately achieve Zero Waste to Landfill status for all its manufacturing operations.

CORPORATE SOCIAL RESPONSIBILITY

The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year in the format prescribed in the Companies (CSR Policy) Amendment Rules, 2021 are set out in Annexure - 2 of this Report. The policy is available on Companys website at URL: https:// investors. tatamotors.com/pdf/csr-poticy.pdf

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNING AND OUTGO

The information on conservation of energy, technotogy absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act, read along with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure - 3.

ANNUAL RETURN

Pursuant to Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return for FY 2020-21 is available on Companys website at https://www. tatamotors.com/investors/annuat-reports/

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Appointment / Re-appointment

The Board of Directors on the recommendation of Nomination and Remuneration Committee (NRC) and in accordance with provisions of the Act and SEBI Listing Regulations, subject to the approval of Members at the Annual General Meeting (AGM), appointed:

• Mr Thierry Bottore (DIN:08935293) as an Additional and Non-Executive (Non Independent) Director on the Board w.e.f October 27, 2020, liable to retire by rotation.

• Mr Kosaraju V Chowdary (DIN:08485334) as an Additional and Non-Executive (Independent) Director on the Board for a tenure of 5 years w.e.f October 27, 2020. He shatt hold office as Additional Director upto the date of the forthcoming AGM and is etigibte for appointment as a Director.

• Mr Mitsuhiko Yamashita (DIN:08871753) as an Additionat and Non-Executive (Independent) Director on the Board w.e.f September 16, 2020. Mr Yamashita underwent change in designation from Non-Executive (Independent) Director to Non-Executive (Non Independent) Director w.e.f October 27, 2020.

Dr Ratf Speth (DIN:03318908) consequent to retirement from services of Jaguar Land Rover Automotive PLC (whotty owned subsidiary), tendered his resignation vide tetter dated October 27, 2020 as the Non-Executive (Non Independent) Director of the Company. The Board of Directors ptaces on record its appreciation for his invatuabte contributions during his tenure as a Director.

In accordance with provisions of the Act and the Artictes of Association of the Company, Mr N Chandrasekaran, (DIN: 00121863) NonExecutive, Chairman is tiabte to retire by rotation and is etigibte for re-appointment.

Mr Guenter Butschek, (DIN:07427375) Chief Executive Officer and Managing Director is being re-appointed w.e.f February 15, 2021 upto June 30, 2021 upon termination of the existing contract, subject to Centrat Government and sharehotders approvat.

The disctosures required pursuant to Regutation 36 of the SEBI Listing Regutations and the SS-2 on Generat Meeting are given in the Notice of Annuat Generat Meeting (AGM), forming part of the Annuat Report.

Independent Directors

In terms of Section 149 of the Act and the SEBI Listing Regutations, Mr Om Prakash Bhatt, Ms Hanne Sorensen, Ms Vedika Bhandarkar and Mr Kosaraju V Chowdary are the Independent Directors of the Company as on date of this report.

Att Independent Directors of the Company have given dectarations under Section 149(7) of the Act, that they meet the criteria of independence as taid down under Section 149(6) of the Act and Regutation 16(1)(b) of the SEBI Listing Regutations. In terms of Regutation 25(8) of the SEBI Listing Regutations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonabty anticipated, that coutd impair or impact their abitity to discharge their duties with an objective independent judgement and without any externat inftuence. The Company has received confirmation from att the existing Independent Directors of their registration on the Independent Directors Database maintained by the Institute of Corporate Affairs pursuant to Rute 6 of the Companies (Appointment and Quatification of Directors) Rutes, 2014.

In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They futfitt the conditions specified in Act as wett as the Rutes made thereunder and are independent of the management.

Key Managerial Personnel

In terms of Section 203 of the Act, the Key Manageriat Personnet (KMPs) of the Company during FY 2020-21 are:

• Mr Guenter Butschek, Chief Executive Officer and Managing Director

• Mr Pathamadai Batachandran Bataji, Group Chief Financiat Officer

• Mr Hoshang K Sethna, Company Secretary

CORPORATE GOVERNANCE

Pursuant to Regutation 34 of the SEBI Listing Regutations, Report on Corporate Governance atong with the certificate from a Practicing Company Secretary certifying comptiance with conditions of Corporate Governance is part to this Report.

MEETINGS OF THE BOARD

During the year, the Board of Directors met 9 times. For detaits, ptease refer to the Report on Corporate Governance, which forms part of this Annuat Report.

COMMITTEES OF THE BOARD

The Committees of the Board focus on certain specific areas and make informed decisions in tine with the detegated authority.

The fottowing Committees constituted by the Board function according to their respective rotes and defined scope:

• Audit Committee

• Nomination and Remuneration Committee

• Corporate Sociat Responsibitity Committee

• Stakehotders Retationship Committee

• Risk Management Committee

• Safety Heatth and Sustainabitity Committee

Detaits of composition, terms of reference and number of meetings hetd for respective committees are given in the Report on Corporate Governance, which forms a part of this Annuat Report. During the year under review, att recommendations made by the various committees have been accepted by the Board.

BOARD EVALUATION

The annuat evatuation process of the Board of Directors, Individuat Directors and Committees was conducted in accordance with the provisions of the Act and the SEBI Listing Regutations.

The Board evatuated its performance after seeking inputs from att the Directors on the basis of criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning, etc. The performance of the Committees was evatuated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India.

The Board and the NRC reviewed the performance of individual Directors on the basis of criteria such as the contribution of the individual Director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

In a separate meeting of Independent Directors, performance of Non- Independent Directors and the Board as a whole was evaluated. Additionally, they also evaluated the Chairman of the Board, taking into account the views of Executive and Non-Executive Directors in the aforesaid meeting. The Board also assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The above evaluations were then discussed in the Board meeting and performance evaluation of Independent directors was done by the entire Board, excluding the Independent Director being evaluated.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

Refer Report on Corporate Governance para on Familiarisation Programme.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Companys policy (salient features) on Directors remuneration and other matters provided in Section 178(3) of the Act has been briefly disclosed hereunder and in the Report on Corporate Governance, which is a part of this Report.

Selection and procedure for nomination and appointment of Directors

The NRC is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. The Board composition analysis reflects in-depth understanding of the Company, including its strategies, environment, operations, financial condition and compliance requirements.

The NRC conducts a gap analysis to refresh the Board on a periodic basis, including each time a Directors appointment or re- appointment is required. The NRC reviews and vets the profiles of potential candidates vis-a-vis the required competencies, undertakes due diligence and meeting potential candidates, prior to making recommendations of their nomination to the Board.

Criteria for determining qualifications, positive attributes and independence of a Director

In terms of the provisions of Section 178(3) of the Act, and Regulation 19 of the SEBI Listing Regulations, the NRC has formulated the criteria for determining qualifications, positive attributes and independence of Directors, the key features of which are as follows:

• Qualifications - The Board nomination process encourages diversity of thought, experience, knowledge, age and gender. It also ensures that the Board has an appropriate blend of functional and industry expertise.

• Positive Attributes - Apart from the duties of Directors as prescribed in the Act the Directors are expected to demonstrate high standards of ethical behaviour, communication skills and independent judgment. The Directors are also expected to abide by the respective Code of Conduct as applicable to them.

• Independence - A Director will be considered independent if he/she meets the criteria laid down in Section 149(6) of the Act, the Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations.

The Directors affirm that the remuneration paid to Directors, KMPs and employees is as per the Remuneration Policy of the Company.

The remuneration policy is also available on the Companys website URL: https:// investors.tatamotors.com/pdf/directors-appointment-remuneration.pdf

VIGIL MECHANISM

The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical behaviour. In line with the Tata Code of Conduct (TCOC), any actual or potential violation, howsoever insignificant or perceived as such, would be a matter of serious concern for the Company. The role of the employees in pointing out such violations of the TCOC cannot be undermined.

Pursuant to Section 177(9) of the Act, a vigil mechanism was established for directors and employees to report to the management instances of unethical behaviour, actual or suspected, fraud or violation of the Companys code of conduct or ethics policy. The vigil mechanism provides a mechanism for employees of the Company to approach the Chairperson of the Audit Committee of the Company for redressal. No person has been denied access to the Chairperson of the Audit Committee. In addition to the above, the employee also has an option to approach the Chief Ethics Counsellor (CEC).

The policy of vigil mechanism is available on the Companys website at URL: https://investors.tatamotors.com/pdf/whistle-blower-policy.pdf

AUDIT

Statutory Audit

M/s B S R & Co. LLP, Chartered Accountants (ICAI Firm No. 101248W/ W-100022), the Statutory Auditors of the Company, hold office until the conclusion of Seventy Seventh AGM to be held in the year 2022. Pursuant to Section 141 of the Act, the Auditors have represented that they are not disqualified and continue to be eligible to act as the Auditor of the Company.

The requirement to place the matter relating to appointment of auditors for ratification by Members at every AGM has been done away by the Companies (Amendment) Act, 2017 with effect from May 7, 2018. Accordingly, no resolution is being proposed for ratification of appointment of statutory auditors at the ensuing AGM. The Statutory Auditors were present in the last AGM.

The Report of the Statutory Auditor forming part of the Annual Report, contains an emphasis of matter as under:

(a) the managerial remuneration paid to the CEO and Managing Director amounting to 2.22 crores for the period February 15, 2021 to March 31, 2021, exceeds the prescribed limits under Section 197 read with Schedule V to the Act, by 1.89 crores. The said amount excludes performance and long term incentives, which will be accrued post determination and approval by the Board of Directors of the Company, and such amounts will also exceed the prescribed limits. Further, the Company is also in the process of obtaining Central Government approval since the CEO and Managing Director is a non-resident.

(b) Further, the remuneration payable to non- executive independent directors aggregating 1.70 crores is subject to approval of the shareholders.

The managements response is as follows:

The term of Mr Guenter Butschek, CEO and Managing Director, has been extended from February 15, 2021 to June 30, 2021. Pursuant to the provisions of Section 197 read with Schedule V of the Act, Members approval at the upcoming AGM is sought for re-appointment as CEO and Managing Director and payment of minimum remuneration to Mr Butschek as per the terms of his appointment and remuneration for the period February 15, 2021 upto the remainder of his current tenure in case of no profits / inadequate profits for FY 2021-22. The resolution approving the above proposal is being placed for approval of the Members in the Notice for this AGM.

In view of the valuable services being rendered and significant contributions of the Non-Executive Directors (including Independent Directors) to the Company and pursuant to the recently amendments in Sections 149(9), 197(3) and Section II of Part II of Schedule V of the Act, the Board of Directors on the recommendations of the NRC, approved payment of remuneration to the Non-Executive Directors (including Independent Directors) of the Company within the limits prescribed under Schedule V of the Act for the Financial Years 2020-21, 2021-22 and 2022-23 in case of no / inadequate profits in each of these years, subject to the approval of the Members at this AGM. The details of the remuneration to be paid for FY 2020-21 are captured in the Corporate Governance Report. The resolution approving the above proposal is being placed for approval of the Members in the Notice for this AGM.

The Statutory Auditors report does not contain any other qualifications, reservations, adverse remarks or disclaimers.

Branch Audit

The resolution authorizing the Board of Directors to appoint Branch Auditors for the purpose of auditing the accounts maintained at the Branch Offices of the Company abroad is being placed for approval of the Members in the Notice for this AGM.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Director appointed M/s Parikh & Associates, (Registration No. - P1988MH009800), a firm of Company Secretaries in Practice to conduct the Secretarial Audit of the Company for year ended March 31, 2021. The Report of the Secretarial Audit is annexed herewith as Annexure - 4. The said Secretarial Audit Report does not contain any qualification, reservations, adverse remarks and disclaimer.

Cost Audit

As per Section 148 of the Act, the Company is required to have the audit of its cost records conducted by a Cost Accountant. The Board of Directors of the Company has on the recommendation of the Audit Committee, approved the appointment of M/s Mani & Co., a firm of Cost Accountants in Practice (Registration No.000004) as the Cost Auditors of the Company to conduct cost audits for relevant products prescribed under the Companies (Cost Records and Audit) Rules, 2014 for the year ending March 31, 2022. The Board on recommendations of the Audit Committee have approved the remuneration payable to the Cost Auditor, subject to ratification of their remuneration by the Members at the forthcoming AGM. The resolution approving the above proposal is being placed for approval of the Members in the Notice for this AGM.

M/s Mani & Co. have, under Section 139(1) of the Act and the Rules framed thereunder furnished a certificate of their eligibility and consent for appointment.

The cost accounts and records of the Company are duly prepared and maintained as required under Section 148(1) of Act.

OTHER DISCLOSURES

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts/ arrangements/ transactions entered by the Company during the FY 2020-21 with related parties were on an arms length basis and in the ordinary course of business. There were no material Related Party Transactions (RPTs) undertaken by the Company during the year that require shareholders approval under Regulation 23(4) of the SEBI Listing Regulations or Section 188 of the Act. The approval of the Audit Committee was sought for all RPTs. Certain transactions which were repetitive in nature were approved through omnibus route. All the transactions were in compliance with the applicable provisions of the Act and SEBI Listing Regulations.

Given that the Company does not have any RPTs to report pursuant to Sections 134(3)(h) and 188 of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2, the same is not provided.

During the FY 2020-21, the Non-executive Directors of the Company had no pecuniary relationship or transactions with the Company other than sitting fees, remuneration payable to non executive directors (subject to members approval) and reimbursement of expenses, as applicable.

The RPT Policy is available on the Companys website URL: https:// investors.tatamotors.com/pdf/rpt-policy.pdf

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

As per Section 186, the details of Loans, Guarantees or Investments made during FY 2020-21 are given below:

(Rs in crores)
Name of Companies Nature of Transactions Loans Investments
JT Special Vehicle Pvt Ltd Equity Infusion - 0.02
Tata Steel Limited Equity investment pursuant to first and final call made by Tata Steel towards partly paid equity shares 16.35
Tata International Limited Equity investment pursuant to rights issue - 41.25
Tata Hispano Carrocera Loan 9.68 -
Trilix SRL Loan 13.37 -
Tata Marcopolo Motors Limited Inter Corporate Deposits 70.00 -
JT Special Vehicle Pvt Limited* Inter Corporate Deposits given as subvention 4.13 -
Brabo Robotics and Automation Limited * Inter Corporate Deposits given as subvention 26.86 -

* Both are wholly owned subsidiaries of the Company (TML) and are in the process of shut down of operations and not in a position to meet its external liabilities. Thus, amount paid as subvention.

TMF Holdings Limited, wholly owned subsidiary of the Company has issued perpetual debt of 1,350 crores with call/put option provided by the Company to the investors after 4 years and up to 6 years from the deemed date of allotment.

During FY 2020-21, the Company has not given guarantee to any of its subsidiaries, joint ventures, associates companies and other body corporates and persons.

DEPOSITS FROM PUBLIC

The Company has not accepted any deposits from public during the year under review, and as such, no amount of principal or interest on deposits from public was outstanding as on the date of the balance sheet, except for unclaimed and unpaid deposits pertaining to previous years.

DIRECTORS RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost, secretarial auditors and external agencies, including audit of internal controls over financial reporting by the Statutory Auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companys internal financial controls were adequate and effective during FY 2020-21.

Accordingly, pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

b) t hey have selected such accounting policies and have applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; and

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

Refer MD&A para on Internal Control Systems and their Adequacy for detail analysis.

SECRETARIAL STANDARDS

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the

Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

DIVIDEND DISTRIBUTION POLICY

Pursuant to Regulation 43A of SEBI Listing Regulations, the Board of Directors of the Company have formulated a Dividend Distribution Policy. The Policy is also available on the Companys website URL: https://investors.tatamotors.com/pdf/dividend-distribution-policy.pdf

INVESTOR EDUCATION AND PROTECTION FUND

Refer Report on Corporate Governance para on Transfer of unclaimed / unpaid amounts / shares to the Investor Education and Protection Fund (IEPF) for detail analysis.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the year under review:

• There are no significant material orders passed by the Regulators or Courts or Tribunal, which would impact the going concern status of the Company and its future operation. However, Members attention is drawn to the Statement on Contingent Liabilities and Commitments in the Notes forming part of the Financial Statement.

• No fraud has been reported by the Auditors to the Audit Committee or the Board.

• There has been no change in the nature of business of the Company.

ACKNOWLEDGEMENTS

The Directors regret the loss of life due to COVID-19 pandemic and are deeply grateful and have immense respect for every person who risked their life and safety to fight this pandemic. The Directors wish to convey their appreciation to all of the Companys employees for their contribution towards the Companys performance. The Directors would also like to thank the shareholders, employee unions, customers, dealers, suppliers, bankers, governments and all other business associates for their continuous support to the Company and their confidence in its management.

On behalf of the Board of Directors
NCHANDRASEKARAN
Chairman
Mumbai, May 18, 2021 DIN: 00121863