Tata Motors Ltd Directors Report.

TO THE MEMBERS OF TATA MOTORS LIMITED

The Directors are pleased to present herewith the Seventy Seventh Annual Report of Tata Motors Limited (the Company) along with the Audited Financial Statements for the Financial Year (FY) ended March 31, 2022.

FINANCIAL RESULTS

( in crore)

PARTICULARS

Standalone*

Consolidated

FY 2022 FY 2021 FY 2022 FY2021
Revenue from operations 47,263.68 30,175.03 2,78,453.62 2,49,794.75
Total expenditure 45,034.04 28,339.33 2,44,430.90 2,14,012.84
Other Income 659.91 419.99 3,053.63 2,643.19
Profit before interest, foreign exchange, depreciation, amortization, exceptional item and tax 2,889.55 2,255.69 37,076.35 38,425.10
Finance cost 2,121.73 2,110.83 9,326.31 8,097.17
Profit before depreciation, amortization, exceptional item, foreign exchange and tax 767.82 144.86 27,750.04 30,327.93
Depreciation, amortization and product development/ engineering expenses 2,354.47 2,079.42 34,045.19 28,773.34
Foreign exchange (gain)/loss (net) 136.81 32.62 78.68 (1,732.15)
Profit/(loss) before exceptional items and tax (1,723.46) (1,967.17) (6,373.83) 3,286.74
Exceptional Items - (gain) / loss (net) (83.41) 307.55 629.58 13,761.02
Profit/(loss) before tax (1,640.05) (2,274.72) (7,003.41) (10,474.28)
Tax expenses/ (credit) (net) 99.18 20.72 (4,231.29) 2,541.86
Profit/(loss) for the year from continuing operations (1,739.23) (2,295.44) (11,234.70) (13,016.14)
Profit/(loss) before tax for the year from discontinued operations 392.51 (37.85) - -
Tax expense/(credit) (net) of discontinued operations 44.14 62.15 - -
Profit/(loss) after tax for the year from discontinued operations 348.37 (100.00) - -
Share of profit of joint venture and associates (net) - - (74.06) (378.96)
Profit/(loss) for the year (1,390.86) (2,395.44) (11,308.76) (13,395.10)
Other comprehensive income/(loss) 282.35 442.99 (455.19) 2,919.34
Total Other comprehensive income/(loss) for the year (1,108.51) (1,952.45) (11,763.95) (10,475.76)
Attributable to:
Shareholders of the Company - - (11,897.28) (10,551.20)
Non-controlling interest - - 133.33 75.44

* Pursuant to a Scheme of Arrangement sanctioned by the Honble National Company Law Tribunal (NCLT) Mumbai Bench, the Passenger Vehicle (PV) undertaking of the Company has been transferred to Tata Motors Passenger Vehicles Limited (TMPVL), as a going concern, on a slump sale basis, w.e.f. January 1,2022. The financial results of PV undertaking along with joint operation Fiat India Automobiles Private Limited has been disclosed as discontinued operation for FY 2021-22 and FY 2020- 21. It includes the Companys proportionate share of income and expenditure in its joint operations, namely, Tata Cummins Private Limited.

DIVIDEND

In view of losses for FY 2021-22, no dividend can be paid to the Members as per the provisions of the Companies Act, 2013 (the Act) and the Rules framed thereunder.

DIVIDEND DISTRIBUTION POLICY

Pursuant to Regulation 43A of the Securites and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI Listing Regulations], the Board of Directors of the Company had formulated a Dividend Distribution Policy (the Policy). The Policy is available on the Companys website URL: https:// investors.tatamotors. com/pdf/dividend-distribution-policy.pdf

TRANSFER TO RESERVES

Due to losses in FY 2021-22, no amount has been transferred to Reserves. An amount of 493.30 crore was transferred from Debenture Redemption Reserve to Profit & Loss Account.

FINANCIAL PERFORMANCE AND STATE OF THE COMPANYS AFFAIRS

Operating Results and Profits

Consolidated revenue from operations was 2,78,454 crore in FY 2021-22, which was 11.5% higher than the revenue of 2,49,795 crore in FY 2020-21.

The consolidated EBITDA margin was at 9.6% in FY 2021-22 as compared to 12.2% in FY 2020-21. EBIT margin stood at 0.7% in FY 2021-22 as compared to 2.6% for FY 2020-21. Loss for the period (including share of associates and joint ventures) stood at 11,309 crore in FY 2021-22 as compared to 13,395 crore in FY 2020-21.

The free cash flow (auto) was cash outflow of 9,472 crore in FY 2021-22 as compared to cash inflow of 5,317 crore in FY 2020-21.

 

Refer para on Operating Results in Management Discussion and Analysis Report (MD&A) for additional details.

Standalone revenue from operations (including joint operations, excluding discontinued operations) of ?47,264 crore in FY 2021-22, was 56.6% higher than the revenue of ?30,175 crore in FY 2020-21. The loss before and after tax (including joint operations) for FY 2021-22 were at 1,248 crore and 1,391 crore, respectively as compared to the loss before and after tax (including joint operations) of 1,313 crore and 1,395 crore, respectively for FY 2020-21. The financial performance improved mainly due to increase in volumes, improved product mix and cost management offset partially by commodity inflation.

Jaguar Land Rover (JLR), (as per IFRS) recorded revenue of ?18.3 billion in FY 2021-22 as compared to the revenue of ?19.7 billion in FY 2020-21, down by 7.2%. Wholesales (excluding CJLR) declined by 15.4% year-on-year, primarily as a result of the global semiconductor shortage affecting all key regions except for overseas where wholesales grew 5.0% year-on-year. While full year financial results reflect the constrained sales volumes, the continuing reduction in JLRs breakeven point through revenue and cost management under the Refocus transformation programme enabled JLR to achieve positive margins and cash flow in the second half of the financial year. Loss before tax and exceptional items was (?412) million in FY 2021-22, as compared to the ?662 million profit before tax and exceptional items in FY 2020-21, reflecting the constrained volumes as a result of the global shortage of semiconductors.

VEHICLE SALES AND MARKET SHARES

Tata Motors Group sales for the year stood at 10,33,904 vehicles, up by 23.4% as compared to FY 2020-21. Global sales of all Commercial Vehicles were at 3,67,565 vehicles, while sales of Passenger Vehicles were at 6,66,339 vehicles.

 

Refer para on Overview of Automotive Operations in MD&A for additional details.

Tata Motors (including TMPVL) recorded sales of 6,93,036 vehicles, a growth of 49.4% over FY 2020-21 and higher than the Indian Auto Industry increase of 15.4%. The Companys market share (calculated on wholesales) increased to 18.3% in FY 2021-22 from 14.1% in FY 2020-21.

Commercial Vehicles (CV)

After a decline in FY 2019-20 and FY 2020-21, the CV industry volumes grew by 26% in FY 2021-22 over FY 2020-21, with gradual and consistent recovery in consumer sentiments. The Medium and Heavy Commercial Vehicle (M&HCV) and Intermediate and Light Commercial Vehicle (I&LCV) segments grew by ~50% and ~40%, respectively vs previous year, due to increased activity in road construction, mining and improved infrastructure spending by the Central and State Government, as also growth in e-commerce and agriculture. The growing logistics, e-commerce and FMCG sectors have been driving demand in the last-mile transportation segment leading to ~16% growth in Small Commercial Vehicle and Pick-up (SCV&PU) segment.

Business grew ahead of the industry at 33%, while also improving share across all 4 Product segments on back of superior product performance of Companys BSVI range, endorsed by customers and other stakeholders alike, slew of new launches, widest sales and service network and innovative digitalized lead generation and management techniques. In addition to managing the demand side challenges through accelerated digitalisation efforts and enhanced collaboration, the Company also managed the semi conductor and other supply chain constraints through its dynamic business agility plan.

The Net Promoter Score, continued to hold at strong levels at 68 and has increased by 11 points over the last 4 years, on the back of better product performance and enhanced overall customer experience. The business also continued to lead on key customer- facing metrics with more than 90% satisfaction level in both, post- sales and post-service feedback. The Company also won the CII Customer Obsession Apex award in FY 2021-22, making it the 4th consecutive year of being recognized for its efforts towards customer centricity in field service. Tata OK (Used vehicle business) business continued to grow stronger in FY 2021-22 and has seen a 10x increase in sales volumes and 4x increase in touchpoints over the previous 4 years.

 

Refer para on Commercial Vehicles in India in MD&A for additional details.

Passenger Vehicles (PV)

Domestic PV industry witnessed a growth of 13% in FY 2021-22 as compared to FY 2020-21. Lockdown on account of second wave of Covid-19 negatively impacted industry in Q1 FY 2021-22, however volumes increased steadily from Q2 FY 2021-22. While, semiconductor unavailability restricted industry actors from unleashing potential demand, incremental growth has come on the back of increasing preference towards personal mobility, new launches and continued availability of financing options.

The Company registered a growth of 67% in FY 2021-22 vis-a-vis FY 2020-21 with a total volume of 3,70,354 units. The market share (calculated on wholesales) for FY 2021-22 was 12.1%, an increase of 390 basis points from FY 2020-21. For FY 2021-22, the business registered its highest ever annual wholesales. The growth has come on the back of phenomenal response received for the New Forever range, new launches such as Punch, Tiago/ Tigor CNG, Tigor EV etc., introduction of variants of existing models with aspirational features at accessible price points to expand the customer base, significant improvement in working capital availability, synchronization of daily retail, offtake and production, enabling fast cash rotation for channel partners and focused actions in identified micro-markets to achieve steep jump in market share and substantial efforts taken to improve sales and aftersales customer experience. In addition, expeditious ramping up of supplies by debottlenecking of capacities, sweating of in-house as well as supplier end assets, augmenting of supplier capacity, and agile and innovative actions taken to improve semi conductor availability supported the growth.

In October 2021, the Company Launched Indias first sub-compact SUV "PUNCH". Adopting a new age, human centric approach that goes beyond the conventional industry practice of trims, the PUNCH is designed and made available in 4 distinct personas- Pure, Adventure, Accomplished and Creative, to cater to the varied LifestyLe of its customers. Punch has received a phenomenaL response from the market. Within 6 months of its Launch, Punch has crossed the milestone of 50,000 and is 8th highest sold SUV out of 45 models available in the segment. In January 2022, the Company introduced advanced CNG technology in Tiago and Tigor to offer delightful experience with incredible performance, a wide range of premium features, upmarket interiors and uncompromised safety. Both the models have received terrific response from the market, as a resuLt CNG voLumes have been increased to ~4,500 per month.

 

Refer para on Passenger Vehicles in India in MD&A for additional details.

Electric Vehicles (EV)

EV industry continued on the growth trajectory in FY 2021-22 on the back of favourable policies from Centre and State Government, positive word of mouth through existing customers, increase in pubLic charging infra avaiLabiLity and home charging awareness. During FY 2021-22, EV industry grew by 3.7x to ~22,000 units vis-a-vis ~5,900 sold in FY 2020-21. Fleet segment demand has been steadily increasing since Q3 FY 2022. Fleet segment grew 2.4x to cross 1000 units mark in FY 2021-22. PersonaL segment continues to grow stronger with 95% of the total sales in FY 2021-22.

EV business continued a journey on exponential growth path in FY 2021-22 and grew by 4.5x to seLL 19,105 units of EVs vis-a-vis 4,218 soLd in FY 2021. Growth in voLume has come on the back of continued strong demand for Nexon EV, good response to Tigor EV (based on Ziptron technology) and enhancement of supplies. The growth had Led to increase in penetration to 8% at exit in March 2022. Nexon EVs penetration in Nexon has increased to 16% in March 2022 from 8% in ApriL 2021. Tigor EVs penetration has increased to 26% in March 2022 from 20% in August 2021 post Launch.

Exports

CV exports for FY 2021-22 cLosed at 34,791 units, 71% above the previous fiscaL year. RetaiLs for FY 2021-22 cLosed at 31,604 units 31% above previous fiscaL year, LargeLy on account of market recovery across various markets; SAARC, MENA, Sub Saharan Africa (SSA) and ASEAN. FY 2021-22 saw many highlights, NepaL contributed to 9,253 units of shipment and 7,086 units of retaiLs and increase in market share. EstabLishment of LocaL AssembLy operations in Sri Lanka with 30 units assembLed in FY 2021-22. SSA contributed to 6,599 units of shipment and 6,517 units of retaiL Leading to gain market share.

PV exports for FY 2021-22 cLosed at 1,803 units, more than two times growth with respect to previous year, LargeLy on account of market recovery and introduction of EV in NepaL and Bhutan. RetaiLs for FY 2021-22 cLosed at 1,795 units, growth of 95% with respect to previous year. FY 2021-22 saw many highLights; NepaL contributed to 1,740 units of shipments and

1,668 units of retaiLs, achieving 14.8% market share, 3rd Rank on retaiL and highest shipment in previous five years. Bhutan aLso cLocked highest ever shipment in the history of the Company with 55 units and highest ever retaiL of 50 units for FY 2021-22.

 

Refer para on Tata CommerciaL VehicLes and Tata Passenger VehicLes - Exports in MD&A for additional detaHs.

JAGUAR LAND ROVER (JLR)

JLR retaiL saLes were 3,76,381 vehicLes in FY 2021-22, down 63,207 vehicLes (14.4%) year-on-year. RetaiL saLes were constrained by the industry-wide shortage of semi conductors and decLined in aLL regions year-on-year, incLuding the UK (-23.6%), North America (-17.6%), China (-13.9%), Europe (-9.1%) and Overseas (-2.8%). Furthermore, the gLobaL chip suppLy shortage impacted saLes of every modeL in FY 2021-22, apart from the Land Rover Defender which retaiLed a totaL of 61,717 vehicLes in FY 2021-22, though FY 2020-21 was not a fuLL year for Defender as retaiLs onLy started towards the end of the year. JLR whoLesaLes (excLuding the China joint venture) were 2,94,182 vehicLes in FY 2021-22, down 15.4% compared to FY 2020-21.

 

Refer para on Tata and other brand vehicLes in MD&A for additionai detaiis..

Some of the key highLights of FY 2021-22 were:

• Strong customer demand for products resuLting in a record-breaking order book of 168,471 orders at the end of the year, incLuding 45,584 for New Range Rover and 40,618 for Defender.

• GLobaL Launch of the award-winning New Range Rover, which embodies Modern Luxury by Design and has been Loved by customers around the worLd.

• Throughout FY 2021-22, JLR increased its capabiLity as an agiLe, fuLLy data-driven, digitaL business with the creation of InDigitaL, a key piLLar of our Refocus transformation programme.

• Reimagine sees JLR coLLaborating with Leaders in their fieLds, and in February 2022, JLR announced its new partnership with NVIDIA. NVIDIA is the worLd Leader in artificiaL inteLLigence computing, connected car services, and automated and autonomous driving systems. Together, this partnership can acceLerate in-vehicLe software strategy, deLivering modern Luxury experiences and enabLing a true Leapfrog in automotive technoLogy.

Tata Daewoo Commercial Vehicle Company Limited (TDCV)

The revenues for FY 2021-22 increased by 60.3% to KRW 88 0.74 biLLion as compared to KRW 549.33 biLLion in FY 2020-21. OveraLL saLes increased by 84.4% to 9,454 units in FY 2021-22 from 5,127 units in FY 2020-21 thanks to product range expansion and recovery of domestic as weLL gLobaL market demand.

 

Refer para on Tata CommerciaL VehicLes and Tata Passenger VehicLes - Exports in MD&A for additionaL detaHs.

TMF Holdings Limited (TMFHL)

Consequent to the severity of Covid-19 second wave, economic activity as measured through mobility indicators nosedived in the first quarter resulting in a slow start to FY 2021-22. TMF Group Assets Under Management (AUM) grew by 6% Y-o-Y to ?45,220 crore, as against ?42,810 crore in the previous year. CV market share dropped to 27% due to aggressive competition from banks in heavy commercial vehicle space. While Net Interest Margin Security (NIMs) expanded from 4.5% to 5.2%, Gross Net-Performing Assets (GNPA) provision coverage increased from 29% as of March 31, 2021 to 43% as of March 31, 2022. As a result, consolidated profit before tax for FY 2021-22 was 101 crore as against 166 crore in FY 2020-21.

 

Refer para on Tata and other brand vehicles - Vehicle Financing in MD&A for additional details.

SHARE CAPITAL

During the year, the Company issued and allotted 3,54,242 Ordinary shares of 1/- each, pursuant to exercise of stock options by the eligible participants of the Company and its subsidiary company, under the Tata Motors Limited Employees Stock Option Scheme 2018.

DEBENTURES

During the year, the Company has issued and allotted on private placement basis, rated, listed, unsecured, redeemable non- convertible Debentures aggregating 1,000 crore.

 

Refer para on Outstanding Securities of the Corporate Governance (CG) Report for additional details.

FINANCE AND CREDIT RATING

Despite challenges caused by supply chain issues and intermittent Covid-19 related disruptions, the Group managed its finances prudently, meeting the business needs. The Company has maintained sufficient liquidity at all times to navigate the impact of external challenges. As at March 31, 2022, the Companys liquidity for domestic operations was 10,190 crore, whereas the liquidity at JLR was ?6.4 bn (including unutilized credit facility of ?2 bn).

While, the demand was strong and witnessed recovery, supply chain issues and commodity inflations had an impact on the profitability and debt. Despite these challenging times, the credit ratings of the Company underwent positive revisions.

During the year, Moodys upgraded the outlook to Stable from Negative and S&P upgraded the outlook to Stable and also gave a 2 notch upgrade in credit rating of the Company taking into consideration promoter group support.

 

Refer para on Credit Ratings in CG Report and Liquidity and Capital Resources in MD&A for additional details.

Material Changes and Commitment Affecting the Financial Position

No material changes are affecting the financial position of the Company, after the close of the FY 2021-22 till the date of this Report.

The impact of Covid-19 on the Companys financial statements has been given in Note 2(c) of the Notes to financial statements for the year ended March 31, 2022 and the Companys response to the situation arising from this pandemic has been explained in the Management Discussion and Analysis, which forms part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated financial statements of the Company and its subsidiaries for FY 2021-22 are prepared in compliance with the applicable provisions of the Act and as stipulated under Regulation 33 of the 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 statements together with the Independent Auditors Report thereon forms part of this Annual Report. Pursuant to Section 129(3) of the Act, a statement containing the salient features of the Financial Statements of the subsidiary companies is attached to the Financial Statements in Form AOC-1. Further, 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. These financial statements of the Company and the subsidiary companies will also be available for inspection to the Members through electronic mode. The Members desiring financial statements of the Company, Consolidated financial statements along with other relevant documents and the financial statements of the subsidary companies, may send their request in writing to the Company at inv rel@tatamotors.com and the same 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 86 subsidiaries (14 direct and 72 indirect), 10 associate companies, 4 joint ventures and 2 joint operations as at March 31, 2022, as disclosed in the accounts.

During FY2021-22, the following changes have taken place in subsidiary / associates / joint venture companies:

• TML Distribution Company Limited merged with TML Business Services Limited w.e.f April 1, 2021 (Appointed date).

• Inchcape JLR Europe Limited was incorporated on August 31, 2020 and it became associate of the Company w.e.f April 30, 2021.

• TML CV Mobility Solutions Limited was incorporated on June 7, 2021, as a wholly owned subsidiary of the Company.

• Shareholding in Tata Marcopolo Motors Limited increased from 51% to 61.86% w.e.f November 15, 2021.

• Tata Passenger Electric Mobility Limited (TPEML) was incorporated on December 21, 2021, as a wholly owned subsidiary of the Company.

• Tata Motors Passenger Vehicles Limited (name changed from TML Business Analytics Services Limited w.e.f September 17, 2021) ceased to be subsidiary of TML Business Services Limited and became the direct subsidiary of Tata Motors Limited w.e.f. January 1, 2022.

• Tata Motors European Technical Centre PLC, ceased to be direct subsidiary of Tata Motors Limited and became a wholly owned subsidiary of TMPVL on March 10, 2022 and thereafter became a wholly owned subsidiary TPEML w.e.f March 28, 2022.

• INCAT GmbH which was under liquidation w.e.f. January 25, 2017, was revived and its name was changed to Tata Technologies GmbH w.e.f March 30, 2022.

• Spark 44 Group comprising of Spark 44 (JV) Limited and its 16 subsidiaries was sold on March 31, 2022.

Transfer of Passenger Vehicles Undertaking to TML Business Analytics Services Limited: During the year, the NCLT, had vide its order dated August 24, 2021 sanctioned the Scheme of Arrangement between the Company and TML Business Analytics Services Limited (TMLBASL) (presently known as Tata Motors Passenger Vehicles Limited) and their respective shareholders under Section 230-232 of the Act, (Scheme), for transfer of the Companys Passenger Vehicles Business Undertaking to TMLBASL. As per the Scheme, the Board of Directors of the Company and TMLBASL made the Scheme effective from January 1, 2022.

Incorporation of TPEML: The Company incorporated a wholly owned subsidiary TPEML on December 21, 2021 with an initial equity investment of 700 crore to undertake its passenger electric mobility business.

Keeping in view of the capital requirements required to fund the technology, research and development needs of the EV business, the Company and TPG RISE Climate TopGun Pte Ltd. (TPG), executed a shareholder agreement on November 16, 2021 for an investment of ?7,500 crore in compulsory convertible instruments to secure between 11% to 15% stake in TPEML. The first tranche amounting ?3,750 crore was subscribed by TPG on March 30, 2022.

There has been no material change in the nature of the 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/material.pdf

Refer para on Subsidiary Companies in CG Report for additional details.

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 para on Internal Control Systems and their Adequacy in MD&A for additional details.

HUMAN RESOURCES

 

Refer para on Human Resources/Industrial Relations in MD&A for additional details.

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 6.53% women employees in FY 2021-22 vis- a-vis 5.48% in FY 2020-21.

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 Complaints Committee (ICC) is in place for all works and offices of the Company to redress complaints received regarding sexual harassment.

During FY 2021-22, the Company had received 9 complaints on sexual harassment, 8 of which have been substantiated and appropriate actions taken. The remaining 1 complaint was received during mid March and is being investigated. The Company organized over 300 awareness workshops across locations covering flexi and temp workforce, contractual staff, blue collar employees, new joiners etc. In addition, the Company rolled out an updated e-module for Prevention of Sexual Harassment (PoSH) awareness for all permanent white collar employees as a mandatory program, which achieved 99% coverage. In order to ensure uniform understanding and larger coverage for the blue collar and contractual employees, an audio visual module is under construction, which is to be deployed in FY2022-23.

Tata Motors Limited - Performance Share Units/ Stock Options (Schemes)

The Company has in force the following Schemes, which were framed under the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (SBEB Regulations):

• Tata Motors Limited Employees Stock Option Scheme 2018 (TML ESOP Scheme 2018); and

• Tata Motors Limited Share-based Long Term Incentive Scheme 2021 (TML SLTI Scheme 2021).

TML ESOP Scheme 2018

Pursuant to the approval of the Members obtained at the Annual General Meeting (AGM) held on August 3, 2018, the Company adopted TML ESOP Scheme 2018 and was implemented the same in order to ring fence and incentivize key talent, for driving long term objectives of the Company and to ensure that employee payoffs match the long gestation period of certain key initiatives to drive ownership behavior and collaboration amongst employees of the Company. TML ESOP 2018 was implemented for grant of not exceeding 1,38,00,000 Stock Options in aggregate, at an Exercise price of 345 per share. The Options vest in eligible employees of the Company on achieving certain performance matrices. The Nomination and Remuneration Committee (NRC) has been authorised to determine the said matrices, details terms and conditions relating to vesting including the proportion in which options granted would vest. Options granted under TML ESOP Scheme 2018 would vest within a maximum of 5 (five) years from the date of grant of options.

As of March 31, 2022, out of the 81,47,636 stock options so granted, 13,57,939 stock options have been vested, out of which 3,54,242 stock options have been exercised and the balance 8,15,233 stock options remain unexercised. Further, stock options of 46,77,862 remained unvested and 23,30,308 stock options had been treated as lapsed and forfeited.

During the year, pursuant to NCLT Order dated August 24, 2021, the Passenger Vehicle Undertaking of the Company has been transferred to TMPVL (subsidiary company), due to which employees of the Company have been transferred to TMPVL. Hence, during the year in order to extend the benefit to the employees transferred to TMPVL, the TML ESOP Scheme 2018 was modified to that extent.

In addition the NRC, based on the powers and authority vested as per the TML ESOP Scheme 2018, had modified certain clauses and also recommended certain amendments to the Scheme as per details contained in the Notice convening this AGM.

TML SLTI Scheme 2021

Pursuant to the approval of the Members at the last AGM held on July 30, 2021, the Company has adopted TML SLTI Scheme 2021. The TML SLTI Scheme comprises of two reward mechanism; (a) Performance

Share Units (PSUs), and (b) Stock Options. The TML SLTI Scheme 2021 offers reward to the eligible employees of the Company and its subsidiary companies and offers competitve compensation, to attract and retain talent and to redefine the fixed and performance driven pay mix to drive a performance culture in the Company.

In terms of TML SLTI Scheme 2021,not exceeding (i) 75,00,000 PSUs, and (ii) 14,00,000 Options, are available for offer and grant by the Company to the eligible employees of the Company and that of its subsidiary companies. The eligible employees shall be granted Stock Options and /or PSUs, as determined by NRC. The PSUs and/or Options to vest in employees subject to continuing employment in the Company / its Subsidiary/ Associate Company upon the Company achieving the performance matrices. The NRC would determine the said matrices / detailed terms and conditions relating to vesting including the proportion in which PSUs and/or Options granted would vest. All the PSUs and/or Options would vest with a maximum period of 3 (three) years subject to minimum vesting period of 1 (one) year.

During the year, the Company has granted 8,39,650 Stock Options and 9,64,539 PSUs. There were no PSUs/Option vested or any shares alloted during the year. During FY 2021-22, there has been no change in the TML SLTI Scheme 2021.

In compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SEBI Regulations 2021) a certificate from the Secretarial Auditors confirming implementation of the above Schemes have been obtained.

The statutory disclosures as mandated under the Act and the SEBI Regulations 2021 are 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 as a seperate 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 Members, excluding the aforesaid Annexure. The said Statement is also open for inspection by the Members through electronic mode. 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

Tata Motors has always held Safety and Health of its employees and stakeholders as a core part of its business. In our endeavor to achieve safety culture, the Company undertook three initiatives in FY 2021-22, which helped in mitigating hazards and reducing risks. One of the initiatives was to identify Critical to Safety Stations (CTS) across Companys plant locations, which resulted in having a focused approach towards stations having higher injury potential. In FY 2021-22, total 747 CTS stations were worked upon with risk mitigation as its main intent, leading to 39% lower incidents reported at CTS in FY 2021-22. Further, as an in-depth analysis to monitor safety issues across plants, 43 Safety Kaizens were carried out across locations with following parameters viz., Driving safety, PPE compliance, Material handling etc., and all 5 corporate sub- committees conducted elaborate exercise to identify gaps in safety management systems, resulting into a time bound plan.

The Companys safety performance was monitored and reviewed through ProActive Safety Index (PSI2). Focused training session on Root Cause Failure Analysis (RCFA) to improve investigation quality, I-care to improve risk perception amongst employees, Felt Leadership to all managers, were amongst some of the other initiatives taken during FY 2021-22. Special Attention was given to impart training to new joinees to improve their risk perception. To motivate employees for their contribution towards Safety Excellence, Reward and Recognition program was initiated for Safety Observation and Incident Investigation by Sub-committee. Digital analytics is being leveraged for improved analysis and identifying area of focus.

In FY 2021-22, for Companys 7 Manufacturing Plants in India, Total Recordable Case Frequency Rate (TRCFR) reduced by 31% to 0.97, against 1.39 reported in FY 2020-21. Lost Time Injury Frequency Rate (LTIFR) in FY 2021-22 reduced by 12% to 0.23 compared to 0.26 in FY 2020-21. Measure of Proactive Safety performance, PSI2 was at 70% in FY 2021-22 compared to 79% in FY 2020-21, the lower performance resulted due to 3 fatalities in previous year.

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 once in 4 months, followed by Business Head led SHE Council which reviews every month. Further reviews at factory level are taken by Apex Committee, various Sub-committees for Safety Standards and then the Factory Implementation committees (FIC). Also, for Non-manufacturing areas, focused safety reviews happen at defined frequency at regional offices with Customer Service and Warehouse teams.

The beginning of previous year was marked by entry of Delta variant of Covid-19. With increased criticality of virus during second wave, our initiatives from beginning of pandemic were updated and strengthened. Initiatives were targeted not only at our employees and dependents, but also for society. Employees and dependents diagnosed with Covid-19 were supported for hospitalization, ambulance services, home care and convalescence. Constant tracking of well-being of these employees was ensured and Companys Doctors were available round the clock with a Hotline number to support with any Covid-19 related concerns. Testing and medication was made available at home and at priority for our employees through tie-ups with various health care companies. Covid-19 not only costed physical wellbeing but had a lasting impact on emotional wellbeing of many people. Employee Assistance Program - a confidential, free of cost counselling service by qualified professional counsellors was launched in April 2020 by the Company. 301 employees and dependents availed counselling service through helpline in FY 2021-22. Online sessions on Emotional wellbeing were organized and 2,894 employees attended the sessions. Health stewards were appointed across plant locations to ensure Covid-19 precautions were followed diligently.

The Companys policies had been updated to help employees continue working while keeping themselves and their families safe. Work from Home, Travel, Medical benefits policy were amongst the policies which were updated to face the pandemic effectively.

The Companys hospital located at Jamshedpur has tied up with government administration for testing, vaccination and indoor hospitalization of local community. Dedicated Covid-19 treatment facilities with 85 Bed ICU facility and 80 Covid-19 beds with Oxygen facility were made available for Employees as well as local communities. During this period, 1,287 Covid-19 positive patients were admitted, out of which 45 required emergency surgeries. A total of 36,857 people suspected for Covid-19 were consulted and 12,500 Covid-19 tests were performed.

Vaccination was offered free of cost to employees, their eligible dependents and ~72,985 were benefitted. 76,964 surveillance tests were carried out for asymptomatic employees and candidates reporting for recruitment to curb the spread of Covid-19. In view of scarcity of blood during Covid-19, blood donation camps were organized and 7,689 units were collected.

Business continuity at manufacturing locations was ensured throughout year by stringent workplace norms to prevent infection, surveillance testing, 100% vaccination, zoning and staggered work timings.

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 2021-22 the said ENCON efforts contributed to energy savings of 59,766 GJ, avoided emission of 9,664 tCO2e and cost savings of 9.38 crore to the Company. In FY 2021-22, the Company generated / sourced 92.39 million kWh of renewable electricity for its manufacturing operations, which amounts to 19.4% of the total power consumption as compared to 20% in FY 2020-21 and also contributed in avoidance of emission of 72,992 tCO2e and financial saving of 27.37 crore. 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 2021-22, the Company enhanced its in-house Roof-top Solar PV installation at Pune (total of 14.94 MWp), Jamshedpur (total of 6.3 MWp) and Pantnagar (total of 6 MWp).

In FY 2021-22, The Company conserved a total of 9.24 lakh m3 of water through recycling effluent and rainwater harvesting, which is 19% of total water consumption as compared to 29% in FY 2020-21. In FY 2021-22, 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) Rules, 2014 are set out in Annexure - 2 of this Report. The Policy is available on Companys website at URL: https://investors.tatamotors.com/pdf/csr-policy.pdf

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

The information on conservation of energy, technology 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 2021-22 is available on Companys website at URL: https:// www.tatamotors.com/investors/annual-reports/

DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointment / Re-appointment

As reported in the previous year, Mr Kosaraju V Chowdary (DIN: 08485334) was appointed as an Additional and Non-Executive Independent Director on the Board of the Company with effect from October 27, 2020 and Mr Thierry Bollore (DIN: 08935293) and Mr Mitsuhiko Yamashita (DIN: 08871753) were appointed as an Additional and Non-Executive (Non Independent) Directors on the Board w.e.f October 27, 2020, liable to retire by rotation. Their appointment was approved by the Members at the 76th AGM held on July 30, 2021.

Also in the previous year, Mr Guenter Butscheks (DIN: 07427375) term as Chief Executive Officer (CEO) and Managing Director (MD) of the Company was extended from February 15, 2021 to June 30, 2021 and Mr Girish Wagh (DIN: 03119361) was appointed as an Executive Director of the Company for a the period of 5 (five) years, i.e., from July 1, 2021 to June 30, 2026.

The Members at the AGM held on July 30, 2021 had approved the aforesaid appointment/re-appointment and payment of minimum remuneration in case of inadequacy of profit or no profit in any financial year.

At the forthcoming AGM approval of the Members will be sought to the following appointment:

- Mr Al-Noor Ramji (DIN: 00230865) as an Additional and Non-Executive (Independent) Director of the Company, not liable to retire by rotation, for a tenure of 5 (five) years w.e.f May 1, 2022, subject to approval of Members at this AGM. He shall hold office as an Additional Director upto the date of this AGM and is eligible for appointment as a Director.

- Mr Om Prakash Bhatt (DIN: 00548091) as a Non- Executive (Independent) Director of the Company, not liable to retire by rotation, for the second term i.e. from May 9, 2022 to March 7, 2026. He shall hold office as an Additional Director upto the date of this AGM and is eligible for appointment as a Director.

- Ms Hanne Sorensen (DIN: 08035439) as a Non-Executive (Independent) Director of the Company, not liable to retire by rotation, to hold office for the second term of 5 (five) years, i.e. from January 3, 2023 to January 2, 2028, subject to approval of Members at this AGM.

In accordance with provisions of the Act and the Articles of Association of the Company, Mr Mitsuhiko Yamashita, (DIN: 08871753), Non-Executive (Non-Independent) Director retires by rotation at the ensuing AGM and being eligible offers himself for re-appointment.

The disclosures required pursuant to Regulation 36 of the SEBI Listing Regulations and the Secretarial Standards on General Meeting (SS-2) are given in the Notice of this AGM, forming part of the Annual Report.

Independent Directors

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

All Independent Directors of the Company have given requisite declarations under Section 149(7) of the Act, that they meet the criteria of independence as laid down under Section 149(6) of the Act alongwith Rules framed thereunder, Regulation 16(1)(b) of SEBI Listing Regulations and have complied with the Code of Conduct of the Company as applicable to the Board of directors and Senior Managers. In terms of Regulation 25(8) of the SEBI Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence. The Company has received confirmation from all the Independent Directors of their registration on the Independent Directors Database maintained by the Indian Institute of Corporate Affairs, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 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 fulfill the conditions specified in the Act as well as the Rules made thereunder and are independent of the management.

Key Managerial Personnel

In terms of Section 203 of the Act, the Key Managerial Personnel (KMPs) of the Company during FY 2021-22 are:

• Mr Guenter Butschek, (DIN:074273 75) CEO and MD (upto June 30, 2021)

• Mr Girish Wagh, Executive Director (with effect from July 1, 2021)

• Mr Pathamadai Balachandran Balaji, Group Chief Financial Officer

• Mr Hoshang K Sethna, Company Secretary (upto August 31, 2021)

• Mr Maloy Kumar Gupta, Company Secretary (with effect from September 1, 2021)

The Board places on record its appreciation for Mr Butschek and Mr Sethna for their invaluable contribution and guidance provided to the Company during their tenure.

CORPORATE GOVERNANCE

Pursuant to Regulation 34 of the SEBI Listing Regulations, Report on Corporate Governance alongwith the certificate from a Practicing Company Secretary certifying compliance with conditions of Corporate Governance, is annexed to this Annual Report.

MEETINGS OF THE BOARD

During the year, the Board of Directors met 8 times, i.e., on May 18, 2021; June 23, 2021; July 26, 2021; September 15, 2021; October 12, 2021; November 1, 2021; January 31, 2022 and March 7, 2022. For details, please refer to the Report on Corporate Governance, which forms a part of this Annual Report.

COMMITTEES OF THE BOARD

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

The following Committees constituted by the Board function according to their respective roles and defined scope:

• Audit Committee

• Nomination and Remuneration Committee

• Corporate Social Responsibility Committee

• Stakeholders Relationship Committee

• Risk Management Committee

• Safety, Health and Sustainability Committee

Details of composition, terms of reference and number of meetings held for respective committees are given in the Report on Corporate Governance, which forms a part of this Annual Report. Further, during the year under review, all recommendations made by the various committees have been accepted by the Board.

BOARD EVALUATION

The annual evaluation process of the Board of Directors, individual Directors and Committees was conducted in accordance with the provisions of the Act and the SEBI Listing Regulations.

The Board evaluated its performance after seeking inputs from all 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 evaluated 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 Chairman of the Board had one-on-one meetings with the Independent directors and the Chairman of NRC had one-on-one meetings with the Executive and Non-Executive, Non-Independent directors. These Meetings were intended to obtain Directors inputs on effectiveness of the Board/Committee processes.

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 para on Familarisation Programme in the Report on Corporate Governance for additional details.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Companys Policy on Directors appointment and 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 part of this Annual 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 behavior, 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, Key Managerial Personnel and employees is as per the Remuneration Policy of the Company.

The said 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).

Details of the Vigil Mechanism and Whistle Blower Policy 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, (BSR) Chartered Accountants (ICAI Firm No. 101248W/ W-100022), were appointed as the Statutory Auditors of the Company for a tenure of 5 (five) years, to hold office from the conclusion of the 72nd AGM held on August 22, 2017 until the conclusion of the ensuing AGM. BSRs tenure of 5 (five) years as Statutory Auditors concludes at this ensuing AGM.

The Company has received confirmation from the Statutory Auditors to the effect that their appointment, if made, will be in accordance with the limits specified under the Act and the firm satisfies the criteria specified in Section 141 of the Act read with Rule 4 of the Companies (Audit and Auditors) Rules, 2014.

The Board of Directors of the Company on the recommendation of the Audit Committee has re-appointed BSR as the Statutory Auditors of the Company pursuant to Section 139 of the Act for a second term 5 (five) years to hold office from the conclusion of

the ensuing AGM till the conclusion of 82nd AGM of the Company to be held in the year 2027, subject to approval by the Members at the ensuing AGM.

The Board recommends to seek consent of its Members at the ensuing AGM on re-appointment of BSR as Statutory Auditors for tenure of 5 (five) years, to examine and audit the accounts of the Company during the said period.

The Statutory Auditors report does not contain any qualifications, reservations, adverse remarks or disclaimers, which would be required to be dealt with in the Boards Report.

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 Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company had 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, 2022. The Report of the Secretarial Audit is annexed herewith as Annexure - 4. The said Secretarial Audit Report does not contain any qualifications, 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, 2023. The records of the activities under Cost Audit is no longer prescribed for Motor Vehicles but applicable to certain parts and accessories thereof. However, based on the recommendations of the Audit Committee, the Board has also approved the appointment of M/s Mani & Co. for submission of reports to the Company on cost records pertaining to these activities for the current financial year.

Further, pursuant to Scheme of Arrangement sanctioned by the NCLT, the Passenger Vehicle Undertaking of the Company has been transferred to TMPVL (subsidiary company), as a going concern, on a slump sale basis, w.e.f. January 1, 2022. Consequent to said transfer, the scope of cost audit has been reduced. Hence, the Board of Directors based on the recommendation of the Audit Committee , has approved reduced remuneration of 18,50,000 plus applicable taxes and reimbursement of out-of-pocket expenses payable to the Cost Auditors for conducting cost audit of the Company for FY 2022-23. The resolution approving the above proposal is being placed for approval of the Members in the Notice of 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 FY 2021-22 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 Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2, the same is not provided. The details of RPTs during FY 2021-22, including transaction with person or entity belonging to the promoter/ promoter group which hold(s) 10% or more shareholding in the Company are provided in the accompanying financial statements.

During FY 2021-22, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company other than sitting fees, commission and reimbursement of expenses, as applicable.

The Company formulated a policy on Related Party Transactions (RPTs) in accordance with the Act and the SEBI Listing Regulations including any amendments thereto for identifying, reviewing approving and monitoring of RPTs. The said policy has been revised in line with the amendment in SEBI Listing Regulations and the same 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 2021-22 are given below:

( in crore)

Name of Companies Nature of Transactions Loans Investments
TML CV Mobility Solutions Ltd. Equity infusion 0.05
Tata Hispano Carrocera Loan 4.04
Tata Motors European Technical Centre (TMETC) Loan 51.74
Tata Hispano Carrocera Equity investment 43.60
Tata Hispano Maghreb Equity investment 8.13
Tata Marcopolo Motors Ltd. Equity Infusion 75.00
Tata Motors Passenger Vehicles Ltd. Equity shares received pursuant to Scheme of Demerger 9,417.00*
Tata Passenger Electric Mobility Ltd. Equity investment 700.00

* Equity shares received in consideration for Transfer of the PV Undertaking of the Company as a going concern, on a slump sale basis as defined under Section 2(42C) of the Income-tax Act, 1961.

Note: Outstanding Loan as at March 31, 2021 and given during the year to subsidiaries were converted into investment of 92.32 crore in TMETC and 13.54 crore in Trilix srl.

During FY 2021-22, 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 2021-22.

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

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

b) they 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 para on Internal Control Systems and their Adequacy of MD&A for additional details.

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.

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 additional details.

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 Statements.

• 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 the 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
DIN: 00121863
Mumbai, May 12, 2022