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Tata Motors Ltd.

BSE: 500570 Sector: Auto
NSE: TATAMOTORS ISIN Code: INE155A01022
BSE 00:00 | 08 Aug 468.10 2.70
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NSE 00:00 | 08 Aug 468.25
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OPEN 466.00
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VOLUME 872609
52-Week high 536.50
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OPEN 466.00
CLOSE 465.40
VOLUME 872609
52-Week high 536.50
52-Week low 268.50
P/E
Mkt Cap.(Rs cr) 166,978
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Tata Motors Ltd. (TATAMOTORS) - Director Report

Company director report

TO THE MEMBERS OF TATA MOTORS LIMITED

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

FINANCIAL RESULTS

(' in crore)

PARTICULARS

Standalone*

Consolidated

FY 2022 FY 2021 FY 2022 FY2021
Revenue from operations 47263.68 30175.03 278453.62 249794.75
Total expenditure 45034.04 28339.33 244430.90 214012.84
Other Income 659.91 419.99 3053.63 2643.19
Profit before interest foreign exchange depreciation amortization exceptional item and tax 2889.55 2255.69 37076.35 38425.10
Finance cost 2121.73 2110.83 9326.31 8097.17
Profit before depreciation amortization exceptional item foreign exchange and tax 767.82 144.86 27750.04 30327.93
Depreciation amortization and product development/ engineering expenses 2354.47 2079.42 34045.19 28773.34
Foreign exchange (gain)/loss (net) 136.81 32.62 78.68 (1732.15)
Profit/(loss) before exceptional items and tax (1723.46) (1967.17) (6373.83) 3286.74
Exceptional Items - (gain) / loss (net) (83.41) 307.55 629.58 13761.02
Profit/(loss) before tax (1640.05) (2274.72) (7003.41) (10474.28)
Tax expenses/ (credit) (net) 99.18 20.72 (4231.29) 2541.86
Profit/(loss) for the year from continuing operations (1739.23) (2295.44) (11234.70) (13016.14)
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 (1390.86) (2395.44) (11308.76) (13395.10)
Other comprehensive income/(loss) 282.35 442.99 (455.19) 2919.34
Total Other comprehensive income/(loss) for the year (1108.51) (1952.45) (11763.95) (10475.76)
Attributable to:
Shareholders of the Company - - (11897.28) (10551.20)
Non-controlling interest - - 133.33 75.44

* Pursuant to a Scheme of Arrangement sanctioned by the Hon'ble National Company LawTribunal ('NCLT') Mumbai Bench the Passenger Vehicle ('PV') undertaking of the Companyhas been transferred to Tata Motors Passenger Vehicles Limited ('TMPVL') as a goingconcern on a slump sale basis w.e.f. January 12022. The financial results of PVundertaking along with joint operation Fiat India Automobiles Private Limited has beendisclosed as discontinued operation for FY 2021-22 and FY 2020- 21. It includes theCompany's proportionate share of income and expenditure in its joint operations namelyTata Cummins Private Limited.

DIVIDEND

In view of losses for FY 2021-22 no dividend can be paid to the Members as per theprovisions 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 (ListingObligations and Disclosure Requirements) Regulations 2015 [SEBI Listing Regulations] theBoard of Directors of the Company had formulated a Dividend Distribution Policy ('thePolicy'). The Policy is available on the Company's 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 & LossAccount.

FINANCIAL PERFORMANCE AND STATE OF THE COMPANY'S AFFAIRS

Operating Results and Profits

Consolidated revenue from operations was '278454 crore in FY 2021-22 which was 11.5%higher than the revenue of '249795 crore in FY 2020-21.

The consolidated EBITDA margin was at 9.6% in FY 2021-22 as compared to 12.2% in FY2020-21. EBIT margin stood at 0.7% in FY 2021-22 as compared to 2.6% for FY 2020-21. Lossfor the period (including share of associates and joint ventures) stood at '11309 crorein FY 2021-22 as compared to '13395 crore in FY 2020-21.

The free cash flow (auto) was cash outflow of '9472 crore in FY 2021-22 as compared tocash inflow of '5317 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 discontinuedoperations) of ?47264 crore in FY 2021-22 was 56.6% higher than the revenue of ?30175crore in FY 2020-21. The loss before and after tax (including joint operations) for FY2021-22 were at 1248 crore and 1391 crore respectively as compared to the loss beforeand after tax (including joint operations) of 1313 crore and 1395 crore respectivelyfor FY 2020-21. The financial performance improved mainly due to increase in volumesimproved product mix and cost management offset partially by commodity inflation.

Jaguar Land Rover ('JLR') (as per IFRS) recorded revenue of ?18.3 billion in FY2021-22 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 theglobal semiconductor shortage affecting all key regions except for overseas wherewholesales grew 5.0% year-on-year. While full year financial results reflect theconstrained sales volumes the continuing reduction in JLRs breakeven point throughrevenue and cost management under the Refocus transformation programme enabled JLR toachieve positive margins and cash flow in the second half of the financial year. Lossbefore 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 theconstrained volumes as a result of the global shortage of semiconductors.

VEHICLE SALES AND MARKET SHARES

Tata Motors Group sales for the year stood at 1033904 vehicles up by 23.4% ascompared to FY 2020-21. Global sales of all Commercial Vehicles were at 367565 vehicleswhile sales of Passenger Vehicles were at 666339 vehicles.

 

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

Tata Motors (including TMPVL) recorded sales of 693036 vehicles a growth of 49.4%over FY 2020-21 and higher than the Indian Auto Industry increase of 15.4%. The Company'smarket share (calculated on wholesales) increased to 18.3% in FY 2021-22 from 14.1% in FY2020-21.

Commercial Vehicles ('CV')

After a decline in FY 2019-20 and FY 2020-21 the CV industry volumes grew by 26% in FY2021-22 over FY 2020-21 with gradual and consistent recovery in consumer sentiments. TheMedium and Heavy Commercial Vehicle (M&HCV) and Intermediate and Light CommercialVehicle (I&LCV) segments grew by ~50% and ~40% respectively vs previous year due toincreased activity in road construction mining and improved infrastructure spending bythe Central and State Government as also growth in e-commerce and agriculture. Thegrowing logistics e-commerce and FMCG sectors have been driving demand in the last-miletransportation 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 4Product segments on back of superior product performance of Company's BSVI range endorsedby customers and other stakeholders alike slew of new launches widest sales and servicenetwork and innovative digitalized lead generation and management techniques. In additionto managing the demand side challenges through accelerated digitalisation efforts andenhanced collaboration the Company also managed the semi conductor and other supply chainconstraints through its dynamic business agility plan.

The Net Promoter Score continued to hold at strong levels at 68 and has increased by11 points over the last 4 years on the back of better product performance and enhancedoverall customer experience. The business also continued to lead on key customer- facingmetrics with more than 90% satisfaction level in both post- sales and post-servicefeedback. The Company also won the CII Customer Obsession Apex award in FY 2021-22 makingit the 4th consecutive year of being recognized for its efforts towardscustomer centricity in field service. Tata OK (Used vehicle business) business continuedto grow stronger in FY 2021-22 and has seen a 10x increase in sales volumes and 4xincrease 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 FY2021-22 however volumes increased steadily from Q2 FY 2021-22. While semiconductorunavailability restricted industry actors from unleashing potential demand incrementalgrowth has come on the back of increasing preference towards personal mobility newlaunches and continued availability of financing options.

The Company registered a growth of 67% in FY 2021-22 vis-a-vis FY 2020-21 with atotal volume of 370354 units. The market share (calculated on wholesales) for FY 2021-22was 12.1% an increase of 390 basis points from FY 2020-21. For FY 2021-22 the businessregistered its highest ever annual wholesales. The growth has come on the back ofphenomenal response received for the 'New Forever' range new launches such as PunchTiago/ Tigor CNG Tigor EV etc. introduction of variants of existing models withaspirational features at accessible price points to expand the customer base significantimprovement in working capital availability synchronization of daily retail offtake andproduction enabling fast cash rotation for channel partners and focused actions inidentified micro-markets to achieve steep jump in market share and substantial effortstaken to improve sales and aftersales customer experience. In addition expeditiousramping up of supplies by debottlenecking of capacities sweating of in-house as well assupplier end assets augmenting of supplier capacity and agile and innovative actionstaken to improve semi conductor availability supported the growth.

In October 2021 the Company Launched India's first sub-compact SUV "PUNCH".Adopting a new age human centric approach that goes beyond the conventional industrypractice of trims the PUNCH is designed and made available in 4 distinct personas- PureAdventure 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 LaunchPunch has crossed the milestone of 50000 and is 8th highest sold SUV out of 45models available in the segment. In January 2022 the Company introduced advanced CNGtechnology in Tiago and Tigor to offer delightful experience with incredible performancea wide range of premium features upmarket interiors and uncompromised safety. Both themodels have received terrific response from the market as a resuLt CNG voLumes have beenincreased to ~4500 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 favourablepolicies from Centre and State Government positive word of mouth through existingcustomers increase in pubLic charging infra avaiLabiLity and home charging awareness.During FY 2021-22 EV industry grew by 3.7x to ~22000 units vis-a-vis ~5900 soldin FY 2020-21. Fleet segment demand has been steadily increasing since Q3 FY 2022. Fleetsegment grew 2.4x to cross 1000 units mark in FY 2021-22. PersonaL segment continues togrow 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 by4.5x to seLL 19105 units of EVs vis-a-vis 4218 soLd in FY 2021. Growth in voLumehas 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 increasein penetration to 8% at exit in March 2022. Nexon EV's penetration in Nexon has increasedto 16% in March 2022 from 8% in ApriL 2021. Tigor EV's penetration has increased to 26% inMarch 2022 from 20% in August 2021 post Launch.

Exports

CV exports for FY 2021-22 cLosed at 34791 units 71% above the previous fiscaL year.RetaiLs for FY 2021-22 cLosed at 31604 units 31% above previous fiscaL year LargeLy onaccount of market recovery across various markets; SAARC MENA Sub Saharan Africa (SSA)and ASEAN. FY 2021-22 saw many highlights NepaL contributed to 9253 units of shipmentand 7086 units of retaiLs and increase in market share. EstabLishment of LocaL AssembLyoperations in Sri Lanka with 30 units assembLed in FY 2021-22. SSA contributed to 6599units of shipment and 6517 units of retaiL Leading to gain market share.

PV exports for FY 2021-22 cLosed at 1803 units more than two times growth withrespect to previous year LargeLy on account of market recovery and introduction of EV inNepaL and Bhutan. RetaiLs for FY 2021-22 cLosed at 1795 units growth of 95% with respectto previous year. FY 2021-22 saw many highLights; NepaL contributed to 1740 units ofshipments and

1668 units of retaiLs achieving 14.8% market share 3rd Rank on retaiL andhighest shipment in previous five years. Bhutan aLso cLocked highest ever shipment in thehistory 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 inMD&A for additional detaHs.

JAGUAR LAND ROVER ('JLR')

JLR retaiL saLes were 376381 vehicLes in FY 2021-22 down 63207 vehicLes (14.4%)year-on-year. RetaiL saLes were constrained by the industry-wide shortage of semiconductors and decLined in aLL regions year-on-year incLuding the UK (-23.6%) NorthAmerica (-17.6%) China (-13.9%) Europe (-9.1%) and Overseas (-2.8%). Furthermore thegLobaL chip suppLy shortage impacted saLes of every modeL in FY 2021-22 apart from theLand Rover Defender which retaiLed a totaL of 61717 vehicLes in FY 2021-22 though FY2020-21 was not a fuLL year for Defender as retaiLs onLy started towards the end of theyear. JLR whoLesaLes (excLuding the China joint venture) were 294182 vehicLes in FY2021-22 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 of168471 orders at the end of the year incLuding 45584 for New Range Rover and 40618 forDefender.

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

• Throughout FY 2021-22 JLR increased its capabiLity as an agiLe fuLLydata-driven digitaL business with the creation of InDigitaL a key piLLar of our Refocustransformation programme.

• Reimagine sees JLR coLLaborating with Leaders in their fieLds and in February2022 JLR announced its new partnership with NVIDIA. NVIDIA is the worLd Leader inartificiaL inteLLigence computing connected car services and automated and autonomousdriving systems. Together this partnership can acceLerate in-vehicLe software strategydeLivering modern Luxury experiences and enabLing a true Leapfrog in automotivetechnoLogy.

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 toKRW 549.33 biLLion in FY 2020-21. OveraLL saLes increased by 84.4% to 9454 units in FY2021-22 from 5127 units in FY 2020-21 thanks to product range expansion and recovery ofdomestic as weLL gLobaL market demand.

 

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

TMF Holdings Limited ('TMFHL')

Consequent to the severity of Covid-19 second wave economic activity as measuredthrough mobility indicators nosedived in the first quarter resulting in a slow start to FY2021-22. TMF Group Assets Under Management ('AUM') grew by 6% Y-o-Y to ?45220 crore asagainst ?42810 crore in the previous year. CV market share dropped to 27% due toaggressive competition from banks in heavy commercial vehicle space. While Net InterestMargin 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. Asa result consolidated profit before tax for FY 2021-22 was 101 crore as against 166 crorein FY 2020-21.

 

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

SHARE CAPITAL

During the year the Company issued and allotted 354242 Ordinary shares of 1/- eachpursuant to exercise of stock options by the eligible participants of the Company and itssubsidiary 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 ratedlisted unsecured redeemable non- convertible Debentures aggregating 1000 crore.

 

Refer para on Outstanding Securities of the Corporate Governance ('CG') Report foradditional details.

FINANCE AND CREDIT RATING

Despite challenges caused by supply chain issues and intermittent Covid-19 relateddisruptions the Group managed its finances prudently meeting the business needs. TheCompany has maintained sufficient liquidity at all times to navigate the impact ofexternal challenges. As at March 31 2022 the Company's liquidity for domestic operationswas 10190 crore whereas the liquidity at JLR was ?6.4 bn (including unutilized creditfacility of ?2 bn).

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

During the year Moody's upgraded the outlook to Stable from Negative and S&Pupgraded the outlook to Stable and also gave a 2 notch upgrade in credit rating of theCompany taking into consideration promoter group support.

 

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

Material Changes and Commitment Affecting the Financial Position

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

The impact of Covid-19 on the Company's financial statements has been given in Note2(c) of the Notes to financial statements for the year ended March 31 2022 and theCompany's response to the situation arising from this pandemic has been explained in theManagement Discussion and Analysis which forms part of the Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated financial statements of the Company and its subsidiaries for FY2021-22 are prepared in compliance with the applicable provisions of the Act and asstipulated under Regulation 33 of the SEBI Listing Regulations as well as in accordancewith the Indian Accounting Standards notified under the Companies (Indian AccountingStandards) Rules 2015. The audited consolidated financial statements together with theIndependent Auditor's Report thereon forms part of this Annual Report. Pursuant to Section129(3) of the Act a statement containing the salient features of the Financial Statementsof 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 makeavailable the said financial statements of the subsidiary companies upon a request by anyMember of the Company. These financial statements of the Company and the subsidiarycompanies will also be available for inspection to the Members through electronic mode.The Members desiring financial statements of the Company Consolidated financialstatements along with other relevant documents and the financial statements of thesubsidary companies may send their request in writing to the Company at invrel@tatamotors.com and the same would also be available on the Company's 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 4joint 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.fApril 1 2021 (Appointed date).

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

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

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

• Tata Passenger Electric Mobility Limited ('TPEML') was incorporated on December21 2021 as a wholly owned subsidiary of the Company.

• Tata Motors Passenger Vehicles Limited (name changed from TML Business AnalyticsServices Limited w.e.f September 17 2021) ceased to be subsidiary of TML BusinessServices Limited and became the direct subsidiary of Tata Motors Limited w.e.f. January 12022.

• Tata Motors European Technical Centre PLC ceased to be direct subsidiary ofTata Motors Limited and became a wholly owned subsidiary of TMPVL on March 10 2022 andthereafter 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 andits name was changed to Tata Technologies GmbH w.e.f March 30 2022.

• Spark 44 Group comprising of Spark 44 (JV) Limited and it's 16 subsidiaries wassold 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 Schemeof Arrangement between the Company and TML Business Analytics Services Limited ('TMLBASL')(presently known as Tata Motors Passenger Vehicles Limited) and their respectiveshareholders under Section 230-232 of the Act ('Scheme') for transfer of the Company'sPassenger Vehicles Business Undertaking to TMLBASL. As per the Scheme the Board ofDirectors of the Company and TMLBASL made the Scheme effective from January 1 2022.

Incorporation of TPEML: The Company incorporated a wholly owned subsidiary TPEML onDecember 21 2021 with an initial equity investment of '700 crore to undertake itspassenger electric mobility business.

Keeping in view of the capital requirements required to fund the technology researchand 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 ?7500crore in compulsory convertible instruments to secure between 11% to 15% stake in TPEML.The first tranche amounting ?3750 crore was subscribed by TPG on March 30 2022.

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

The policy for determining material subsidiaries of the Company is available on theCompany's 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 riskmanagement plan of the Company.

The Board takes responsibility for the overall process of risk management throughoutthe organisation. Through an Enterprise Risk Management programme our business units andcorporate functions address risks through an institutionalized approach aligned to ourobjectives. This is facilitated by corporate finance. The Business risk is managed throughcross-functional

involvement and communication across businesses. The results of the risk assessment arepresented to the senior management.

INTERNAL FINANCIAL CONTROL SYSTEMS AND ADEQUACY

The Company's internal control systems are commensurate with the nature of itsbusiness the size and complexity of its operations and such internal financial controlswith reference to the Financial Statements are adequate.

 

Refer para on Internal Control Systems and their Adequacy in MD&A for additionaldetails.

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 thevariety of opinions and perspectives coming from employees with diverse age gender andethnicity. The Company has organized a series of sensitisation and awareness campaigns tohelp create an open mind and culture to leverage on the differences. The network ofWomen@Work and the Diversity Council has widened to location councils as we move along thejourney. Women development and mentoring programme have increased with clear focus onnurturing their career journeys to help the Company build a pipeline of women leaders innear future.

The Company employed 6.53% women employees in FY 2021-22 vis- a-vis 5.48% in FY2020-21.

Prevention of Sexual Harassment

The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and Rules framed thereunder. Internal ComplaintsCommittee ('ICC') is in place for all works and offices of the Company to redresscomplaints received regarding sexual harassment.

During FY 2021-22 the Company had received 9 complaints on sexual harassment 8 ofwhich have been substantiated and appropriate actions taken. The remaining 1 complaint wasreceived during mid March and is being investigated. The Company organized over 300awareness workshops across locations covering flexi and temp workforce contractual staffblue collar employees new joiners etc. In addition the Company rolled out an updatede-module for Prevention of Sexual Harassment ('PoSH') awareness for all permanent whitecollar employees as a mandatory program which achieved 99% coverage. In order to ensureuniform understanding and larger coverage for the blue collar and contractual employeesan 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 Securitiesand Exchange Board of India (Share Based Employee Benefits) Regulations 2014 ('SBEBRegulations'):

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

• Tata Motors Limited Share-based Long Term Incentive Scheme 2021 ('TML SLTIScheme 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 thesame in order to ring fence and incentivize key talent for driving long term objectivesof the Company and to ensure that employee payoffs match the long gestation period ofcertain key initiatives to drive ownership behavior and collaboration amongst employees ofthe Company. TML ESOP 2018 was implemented for grant of not exceeding 13800000 StockOptions in aggregate at an Exercise price of ' 345 per share. The Options vest ineligible employees of the Company on achieving certain performance matrices. TheNomination and Remuneration Committee ('NRC') has been authorised to determine the saidmatrices details terms and conditions relating to vesting including the proportion inwhich options granted would vest. Options granted under TML ESOP Scheme 2018 would vestwithin a maximum of 5 (five) years from the date of grant of options.

As of March 31 2022 out of the 8147636 stock options so granted 1357939 stockoptions have been vested out of which 354242 stock options have been exercised and thebalance 815233 stock options remain unexercised. Further stock options of 4677862remained unvested and 2330308 stock options had been treated as lapsed and forfeited.

During the year pursuant to NCLT Order dated August 24 2021 the Passenger VehicleUndertaking of the Company has been transferred to TMPVL (subsidiary company) due towhich employees of the Company have been transferred to TMPVL. Hence during the year inorder to extend the benefit to the employees transferred to TMPVL the TML ESOP Scheme2018 was modified to that extent.

In addition the NRC based on the powers and authority vested as per the TML ESOPScheme 2018 had modified certain clauses and also recommended certain amendments to theScheme 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 theCompany has adopted TML SLTI Scheme 2021. The TML SLTI Scheme comprises of two rewardmechanism; (a) Performance

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

In terms of TML SLTI Scheme 2021not exceeding (i) 7500000 PSUs and (ii) 1400000Options are available for offer and grant by the Company to the eligible employees of theCompany and that of its subsidiary companies. The eligible employees shall be grantedStock Options and /or PSUs as determined by NRC. The PSUs and/or Options to vest inemployees subject to continuing employment in the Company / its Subsidiary/ AssociateCompany upon the Company achieving the performance matrices. The NRC would determine thesaid matrices / detailed terms and conditions relating to vesting including the proportionin which PSUs and/or Options granted would vest. All the PSUs and/or Options would vestwith a maximum period of 3 (three) years subject to minimum vesting period of 1 (one)year.

During the year the Company has granted 839650 Stock Options and 964539 PSUs.There were no PSUs/Option vested or any shares alloted during the year. During FY 2021-22there has been no change in the TML SLTI Scheme 2021.

In compliance with the Securities and Exchange Board of India (Share Based EmployeeBenefits and Sweat Equity) Regulations 2021 ('SEBI Regulations 2021') a certificate fromthe Secretarial Auditors confirming implementation of the above Schemes have beenobtained.

The statutory disclosures as mandated under the Act and the SEBI Regulations 2021 areavailable on the Company's website URL: https://www.tatamotors.com/investors/ESOP/

Particulars of Employees

Disclosure pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed to the Report as Annexure-1.

Statement containing particulars of top 10 employees and the employees drawingremuneration in excess of limits prescribed under Section 197 (12) of the Act read withRule 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 ofproviso to Section 136(1) of the Act the Report and Accounts are being sent to theMembers excluding the aforesaid Annexure. The said Statement is also open for inspectionby the Members through electronic mode. Any member interested in obtaining a copy of thesame may write to the Company Secretary. None of the employees listed in the said Annexureare related to any Director of the Company.

BUSINESS RESPONSIBILITY REPORT

Pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations the BusinessResponsibility Report (BRR) on initiatives taken

from an environmental social and governance perspective in the prescribed format isavailable as a separate section of the Annual Report and is also available on theCompany's 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 acore part of it's business. In our endeavor to achieve safety culture the Companyundertook three initiatives in FY 2021-22 which helped in mitigating hazards and reducingrisks. One of the initiatives was to identify Critical to Safety Stations ('CTS') acrossCompany's plant locations which resulted in having a focused approach towards stationshaving higher injury potential. In FY 2021-22 total 747 CTS stations were worked uponwith risk mitigation as its main intent leading to 39% lower incidents reported at CTS inFY 2021-22. Further as an in-depth analysis to monitor safety issues across plants 43Safety Kaizens were carried out across locations with following parameters viz. Drivingsafety PPE compliance Material handling etc. and all 5 corporate sub- committeesconducted elaborate exercise to identify gaps in safety management systems resulting intoa time bound plan.

The Company's safety performance was monitored and reviewed through ProActive SafetyIndex ('PSI2'). Focused training session on Root Cause Failure Analysis ('RCFA') toimprove investigation quality I-care to improve risk perception amongst employees FeltLeadership to all managers were amongst some of the other initiatives taken during FY2021-22. Special Attention was given to impart training to new joinees to improve theirrisk perception. To motivate employees for their contribution towards Safety ExcellenceReward and Recognition program was initiated for Safety Observation and IncidentInvestigation by Sub-committee. Digital analytics is being leveraged for improved analysisand identifying area of focus.

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

The Company has robust governance mechanism for safety health environment andsustainability where reviews are undertaken at multiple levels. The Safety Health andSustainability (SHS) Committee of Board is an apex review body which reviews performancesonce 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 forSafety Standards and then the Factory Implementation committees ('FIC'). Also forNon-manufacturing areas focused safety reviews happen at defined frequency at regionaloffices with Customer Service and Warehouse teams.

The beginning of previous year was marked by entry of Delta variant of Covid-19. Withincreased criticality of virus during second wave our initiatives from beginning ofpandemic were updated and strengthened. Initiatives were targeted not only at ouremployees and dependents but also for society. Employees and dependents diagnosed withCovid-19 were supported for hospitalization ambulance services home care andconvalescence. Constant tracking of well-being of these employees was ensured andCompany's Doctors were available round the clock with a Hotline number to support with anyCovid-19 related concerns. Testing and medication was made available at home and atpriority for our employees through tie-ups with various health care companies. Covid-19not only costed physical wellbeing but had a lasting impact on emotional wellbeing of manypeople. 'Employee Assistance Program' - a confidential free of cost counselling serviceby qualified professional counsellors was launched in April 2020 by the Company. 301employees and dependents availed counselling service through helpline in FY 2021-22.Online sessions on Emotional wellbeing were organized and 2894 employees attended thesessions. Health stewards were appointed across plant locations to ensure Covid-19precautions were followed diligently.

The Company's policies had been updated to help employees continue working whilekeeping themselves and their families safe. Work from Home Travel Medical benefitspolicy were amongst the policies which were updated to face the pandemic effectively.

The Company's hospital located at Jamshedpur has tied up with government administrationfor testing vaccination and indoor hospitalization of local community. Dedicated Covid-19treatment facilities with 85 Bed ICU facility and 80 Covid-19 beds with Oxygen facilitywere made available for Employees as well as local communities. During this period 1287Covid-19 positive patients were admitted out of which 45 required emergency surgeries. Atotal of 36857 people suspected for Covid-19 were consulted and 12500 Covid-19 testswere performed.

Vaccination was offered free of cost to employees their eligible dependents and~72985 were benefitted. 76964 surveillance tests were carried out for asymptomaticemployees and candidates reporting for recruitment to curb the spread of Covid-19. In viewof scarcity of blood during Covid-19 blood donation camps were organized and 7689 unitswere collected.

Business continuity at manufacturing locations was ensured throughout year by stringentworkplace norms to prevent infection surveillance testing 100% vaccination zoning andstaggered work timings.

ENERGY & ENVIRONMENT

The Company has always been conscious of the need to conserve energy in itsmanufacturing plants and to protect environment. Energy conservation is achieved throughoptimized consumption of power and fossil fuels and improvements in energy productivitythrough Energy Conservation (ENCON) projects which contributes in reduction inoperational costs and climate change mitigation

through reduction in greenhouse gases. The Company is also signatory to RE100 - acollaborative global initiative of influential businesses committed to 100% renewableelectricity and is working towards increasing the amount of renewable energy generatedin-house and procured from off-site sources.

In FY 2021-22 the said ENCON efforts contributed to energy savings of 59766 GJavoided emission of 9664 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 electricityfor its manufacturing operations which amounts to 19.4% of the total power consumption ascompared to 20% in FY 2020-21 and also contributed in avoidance of emission of 72992 tCO2eand financial saving of '27.37 crore. The Company generates renewable energy (RE) in-housethrough rooftop solar PV (photovoltaic) off-site captive wind farms and throughprocurement of off-site wind and solar power through "Power Purchase Agreements"(PPA's). In FY 2021-22 the Company enhanced its in-house Roof-top Solar PV installationat Pune (total of 14.94 MWp) Jamshedpur (total of 6.3 MWp) and Pantnagar (total of 6MWp).

In FY 2021-22 The Company conserved a total of 9.24 lakh m3 of waterthrough recycling effluent and rainwater harvesting which is 19% of total waterconsumption as compared to 29% in FY 2020-21. In FY 2021-22 the Company sustained itsefforts across Plants to divert hazardous waste from landfill / incineration and derivevalue from the same. Several Plants divert hazardous wastes for energy recovery throughco-processing at cement Plants. The Company will continue this initiative to ultimatelyachieve '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 Companyand the initiatives undertaken by the Company on CSR activities during the year in theformat prescribed in the Companies (CSR Policy) Rules 2014 are set out in Annexure - 2 ofthis Report. The Policy is available on Company's 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 exchangeearnings and outgo stipulated under Section 134(3)(m) of the Act read along with Rule 8of 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 andAdministration) Rules 2014 the Annual Return for FY 2021-22 is available on Company'swebsite 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 appointedas an Additional and Non-Executive Independent Director on the Board of the Company witheffect from October 27 2020 and Mr Thierry Bollore (DIN: 08935293) and Mr MitsuhikoYamashita (DIN: 08871753) were appointed as an Additional and Non-Executive (NonIndependent) 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 302021.

Also in the previous year Mr Guenter Butschek's (DIN: 07427375) term as ChiefExecutive Officer ('CEO') and Managing Director ('MD') of the Company was extended fromFebruary 15 2021 to June 30 2021 and Mr Girish Wagh (DIN: 03119361) was appointed as anExecutive Director of the Company for a the period of 5 (five) years i.e. from July 12021 to June 30 2026.

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

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

- 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) yearsw.e.f May 1 2022 subject to approval of Members at this AGM. He shall hold office as anAdditional Director upto the date of this AGM and is eligible for appointment as aDirector.

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

- Ms Hanne Sorensen (DIN: 08035439) as a Non-Executive (Independent) Director of theCompany 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 atthis AGM.

In accordance with provisions of the Act and the Articles of Association of theCompany Mr Mitsuhiko Yamashita (DIN: 08871753) Non-Executive (Non-Independent) Directorretires by rotation at the ensuing AGM and being eligible offers himself forre-appointment.

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

Independent Directors

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

All Independent Directors of the Company have given requisite declarations underSection 149(7) of the Act that they meet the criteria of independence as laid down underSection 149(6) of the Act alongwith Rules framed thereunder Regulation 16(1)(b) of SEBIListing Regulations and have complied with the Code of Conduct of the Company asapplicable to the Board of directors and Senior Managers. In terms of Regulation 25(8) ofthe SEBI Listing Regulations the Independent Directors have confirmed that they are notaware of any circumstance or situation which exists or may be reasonably anticipatedthat could impair or impact their ability to discharge their duties with an objectiveindependent judgement and without any external influence. The Company has receivedconfirmation from all the Independent Directors of their registration on the IndependentDirectors Database maintained by the Indian Institute of Corporate Affairs in terms ofSection 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 expertiseand experience and are persons of high integrity and repute. They fulfill the conditionsspecified in the Act as well as the Rules made thereunder and are independent of themanagement.

Key Managerial Personnel

In terms of Section 203 of the Act the Key Managerial Personnel ('KMPs') of theCompany 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 theirinvaluable contribution and guidance provided to the Company during their tenure.

CORPORATE GOVERNANCE

Pursuant to Regulation 34 of the SEBI Listing Regulations Report on CorporateGovernance alongwith the certificate from a Practicing Company Secretary certifyingcompliance 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 232021; July 26 2021; September 15 2021; October 12 2021; November 1 2021; January 312022 and March 7 2022. For details please refer to the Report on Corporate Governancewhich forms a part of this Annual Report.

COMMITTEES OF THE BOARD

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

The following Committees constituted by the Board function according to theirrespective 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 respectivecommittees are given in the Report on Corporate Governance which forms a part of thisAnnual Report. Further during the year under review all recommendations made by thevarious committees have been accepted by the Board.

BOARD EVALUATION

The annual evaluation process of the Board of Directors individual Directors andCommittees was conducted in accordance with the provisions of the Act and the SEBI ListingRegulations.

The Board evaluated its performance after seeking inputs from all the Directors on thebasis of criteria such as the Board composition and structure effectiveness of Boardprocesses information and functioning etc. The performance of the Committees wasevaluated by the Board after seeking inputs from the committee members on the basis ofcriteria 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 bythe Securities and Exchange Board of India.

The Chairman of the Board had one-on-one meetings with the Independent directors andthe Chairman of NRC had one-on-one meetings with the Executive and Non-ExecutiveNon-Independent directors. These Meetings were intended to obtain Directors' inputs oneffectiveness of the Board/Committee processes.

The Board and the NRC reviewed the performance of individual Directors on the basis ofcriteria such as the contribution of the individual Director to the Board and committeemeetings like

preparedness on the issues to be discussed meaningful and constructive contributionand inputs in meetings etc.

In a separate meeting of independent directors performance of Non-IndependentDirectors and the Board as a whole was evaluated. Additionally they also evaluated theChairman of the Board taking into account the views of Executive and Non-executiveDirectors in the aforesaid meeting. The Board also assessed the quality quantity andtimeliness of flow of information between the Company management and the Board that isnecessary for the Board to effectively and reasonably perform their duties. The aboveevaluations were then discussed in the Board meeting and performance evaluation ofIndependent directors was done by the entire Board excluding the Independent Directorbeing evaluated.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

 

Refer para on Familarisation Programme in the Report on Corporate Governance foradditional details.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The Company's Policy on Directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been briefly disclosed hereunder and in theReport 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 onthe industry and strategy of the Company. The Board composition analysis reflects in-depthunderstanding of the Company including its strategies environment operations financialcondition and compliance requirements.

The NRC conducts a gap analysis to refresh the Board on a periodic basis includingeach time a director's appointment or re- appointment is required. The NRC reviews andvets the profiles of potential candidates vis-a-vis the required competenciesundertakes due diligence and meeting potential candidates prior to making recommendationsof their nomination to the Board. Criteria for determining qualifications positiveattributes and independence of a Director

In terms of the provisions of Section 178(3) of the Act and Regulation 19 of the SEBIListing Regulations the NRC has formulated the criteria for determining qualificationspositive attributes and independence of Directors the key features of which are asfollows:

• Qualifications - The Board nomination process encourages diversity of thoughtexperience knowledge age and gender. It also ensures that the Board has an appropriateblend of functional and industry expertise.

• Positive Attributes - Apart from the duties of Directors as prescribed in theAct the Directors are expected to demonstrate high standards of ethical behaviorcommunication skills and

independent judgment. The Directors are also expected to abide by the respective Codeof Conduct as applicable to them.

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

The Directors affirm that the remuneration paid to Directors Key Managerial Personneland employees is as per the Remuneration Policy of the Company.

The said policy is also available on the Company's 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 andtransparent manner by adopting the highest standards of professionalism honestyintegrity and ethical behaviour. In line with the Tata Code of Conduct ('TCoC') anyactual or potential violation howsoever insignificant or perceived as such would be amatter of serious concern for the Company. The role of the employees in pointing out suchviolations of the TCoC cannot be undermined. Pursuant to Section 177(9) of the Act avigil mechanism was established for directors and employees to report to the managementinstances of unethical behaviour actual or suspected fraud or violation of the Company'scode of conduct or ethics policy. The Vigil Mechanism provides a mechanism for employeesof the Company to approach the Chairperson of the Audit Committee of the Company forredressal. No person has been denied access to the Chairperson of the Audit Committee. Inaddition to the above the employee also has an option to approach the Chief EthicsCounsellor ('CEC').

Details of the Vigil Mechanism and Whistle Blower Policy is available on the Company'swebsite 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 tohold office from the conclusion of the 72nd AGM held on August 22 2017 untilthe conclusion of the ensuing AGM. BSR's tenure of 5 (five) years as Statutory Auditorsconcludes at this ensuing AGM.

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

The Board of Directors of the Company on the recommendation of the Audit Committee hasre-appointed BSR as the Statutory Auditors of the Company pursuant to Section 139 of theAct 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 inthe 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 onre-appointment of BSR as Statutory Auditors for tenure of 5 (five) years to examine andaudit the accounts of the Company during the said period.

The Statutory Auditor's report does not contain any qualifications reservationsadverse 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 thepurpose of auditing the accounts maintained at the Branch offices of the Company abroad isbeing 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 ofManagerial Personnel) Rules 2014 the Board of Directors of the Company had appointed M/sParikh & Associates (Registration No. P1988MH009800) a firm of Company Secretariesin 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 saidSecretarial Audit Report does not contain any qualifications reservations adverseremarks and disclaimer.

Cost Audit

As per Section 148 of the Act the Company is required to have the audit of its costrecords conducted by a Cost Accountant. The Board of Directors of the Company has on therecommendation of the Audit Committee approved the appointment of M/s Mani & Co. afirm of Cost Accountants in Practice (Registration No.000004) as the Cost Auditors of theCompany to conduct cost audits for relevant products prescribed under the Companies (CostRecords and Audit) Rules 2014 for the year ending March 31 2023. The records of theactivities under Cost Audit is no longer prescribed for 'Motor Vehicles but applicable tocertain parts and accessories thereof'. However based on the recommendations of the AuditCommittee the Board has also approved the appointment of M/s Mani & Co. forsubmission of reports to the Company on cost records pertaining to these activities forthe current financial year.

Further pursuant to Scheme of Arrangement sanctioned by the NCLT the PassengerVehicle Undertaking of the Company has been transferred to TMPVL (subsidiary company) asa going concern on a slump sale basis w.e.f. January 1 2022. Consequent to saidtransfer the scope of cost audit has been reduced. Hence the Board of Directors based onthe recommendation of the Audit Committee has approved reduced remuneration of '1850000 plus applicable taxes and reimbursement of out-of-pocket expenses payable to theCost Auditors for conducting cost audit of the Company for FY 2022-23. The resolutionapproving the above proposal is being placed for approval of the Members in the Notice ofthis AGM.

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

The cost accounts and records of the Company are duly prepared and maintained asrequired 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 withrelated parties were on an arm's length basis and in the ordinary course of business.There were no material Related Party Transactions (RPTs) undertaken by the Company duringthe year that require Shareholders' approval under Regulation 23(4) of the SEBI ListingRegulations or Section 188 of the Act. The approval of the Audit Committee was sought forall RPTs. Certain transactions which were repetitive in nature were approved throughomnibus route. All the transactions were in compliance with the applicable provisions ofthe 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 thesame is not provided. The details of RPTs during FY 2021-22 including transaction withperson or entity belonging to the promoter/ promoter group which hold(s) 10% or moreshareholding in the Company are provided in the accompanying financial statements.

During FY 2021-22 the Non-Executive Directors of the Company had no pecuniaryrelationship or transactions with the Company other than sitting fees commission andreimbursement of expenses as applicable.

The Company formulated a policy on Related Party Transactions (RPTs) in accordance withthe Act and the SEBI Listing Regulations including any amendments thereto for identifyingreviewing approving and monitoring of RPTs. The said policy has been revised in line withthe amendment in SEBI Listing Regulations and the same is available on the Company'swebsite 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 FY2021-22 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 9417.00*
Tata Passenger Electric Mobility Ltd. Equity investment 700.00

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

Note: Outstanding Loan as at March 31 2021 and given during the year to subsidiarieswere 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 subsidiariesjoint 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 andas such no amount of principal or interest on deposits from public was outstanding as onthe date of the balance sheet except for unclaimed and unpaid deposits pertaining toprevious years.

DIRECTORS' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutorycost secretarial auditors and external agencies including audit of internal controlsover financial reporting by the Statutory Auditors and the reviews performed by Managementand the relevant Board Committees including the Audit Committee the Board is of theopinion that the Company's internal financial controls were adequate and effective duringFY 2021-22.

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

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

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

c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets 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 andsuch internal financial controls are adequate and operating effectively; and

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

 

Refer para on Internal Control Systems and their Adequacy of MD&A for additionaldetails.

SECRETARIAL STANDARDS

The Company has devised proper systems to ensure compliance with the provisions of allapplicable Secretarial Standards issued by the Institute of Company Secretaries of Indiaand 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 thefollowing matters as there were no transactions on these items during the year underreview:

• There are no significant material orders passed by the Regulators or Courts orTribunal which would impact the going concern status of the Company and its futureoperation. However Members attention is drawn to the Statement on contingent liabilitiesand 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 gratefuland have immense respect for every person who risked their life and safety to fight thepandemic. The Directors wish to convey their appreciation to all of the Company'semployees for their contribution towards the Company's performance. The Directors wouldalso like to thank the shareholders employee unions customers dealers suppliersbankers governments and all other business associates for their continuous support to theCompany and their confidence in its management.

On behalf of the Board of Directors

NCHANDRASEKARAN
Chairman
DIN: 00121863
Mumbai May 12 2022

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