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Director's Report

Tata Motors Ltd
Industry :  Automobiles - LCVs / HCVs
BSE Code
ISIN Demat
Book Value()
500570
INE155A01022
69.3153058
NSE Symbol
P/E(TTM)
Mar.Cap( Cr.)
TATAMOTORS
53.58
352147
EPS(TTM)
Face Value()
Div & Yield %
17.97
2
0.22
 
As on: Feb 28, 2024 11:04 AM


TO THE MEMBERS
The Directors are pleased to present herewith the Seventy Eighth Annual Report (Rs.IntegratedRs.) of Tata Motors Limited (Rs.the CompanyRs.) along with the Audited Financial Statements for the Financial Year (Rs.FYRs.) ended March 31, 2023.
FINANCIAL HIGHLIGHTS

(Rs. in crore)

PARTICULARS Standalone** Consolidated
FY 2023 FY 2022* FY 2023 FY 2022
Revenue from operations 65,757.33 47,263.68 3,45,966.97 2,78,453.62
Total expenditure 60,047.46 45,034.04 3,03,475.46 2,44,430.90
Operating profit 5,709.87 2,229.64 42,491.51 36,147.23
Other Income 820.94 659.91 4,633.18 3,053.63
Profit before interest, foreign exchange, depreciation, amortization, exceptional item and tax 6,530.81 2,889.55 47,124.69 37,076.35
Finance cost 2,047.51 2,121.73 10,239.23 9,326.31
Profit before depreciation, amortization, exceptional item, foreign exchange and tax 4,483.30 767.82 36,885.46 27,750.04
Depreciation, amortization and product development/ engineering Expenses 2,665.92 2,354.47 35,522.32 34,045.19
Foreign exchange (gain)/loss (net) 279.76 136.81 (103.88) 78.68
Profit/(loss) before exceptional items and tax 1,537.62 (1,723.46) 1,467.02 (6,373.83)
Exceptional Items - (gain) / loss (net) 282.82 (83.41) (1590.53) 629.58
Profit/(loss) before tax 1,254.80 (1,640.05) 3,057.55 (7,003.41)
Tax expenses/ (credit) (net) (1,473.33) 99.18 704.06 (4,231.29)
Profit/(loss) for the year from continuing operations 2,728.13 (1,739.23) 2,353.49 (11,234.70)
Profit/(loss) before tax for the year from discontinued operations - 392.51 - -
Tax expense/(credit) (net) of discontinued operations - 44.14 - -
Profit/(loss) after tax for the year from discontinued operations - 348.37 - -
Share of profit of joint venture and associates (net) - - 336.38 (74.06)
Profit/(loss) for the year 2,728.13 (1,390.86) 2,689.87 (11,308.76)
Other comprehensive income/(loss) (250.35) 282.35 (1,915.33) (455.19)
Total Other comprehensive income/(loss) for the year 2,477.78 (1,108.51) 774.54 (11,763.95)
Attributable to:
Shareholders of the Company - - 479.20 (11,897.28)
Non-controlling interest - - 295.34 133.33

* The results of Passenger Vehicle (Rs.PVRs.) undertaking along with joint operation Fiat India Automobiles Private Limited (Rs.FIAPLRs.) for the period April 1, 2021 to December 31, 2021 has been disclosed as discontinued operations.

** It includes the CompanyRs.s proportionate share of income and expenditure in its joint operations, namely, Tata Cummins Private Limited.

FINANCIAL PERFORMANCE

The commitment of the Company to cater to the aspirations of its valued customers, sustained efforts in creating the right teams and culture and embedding innovation, technology and sustainability at the core of its business has resulted in your Company achieving an improved financial performance through better volumes, improved product mix and cost savings.

Operating Results and Profits

Consolidated revenue of the Company from operations was Rs.3,45,967 crore in FY 2022-23, which was 24.2% higher than the revenue of Rs.2,78,454 crore in FY 2021-22 and the highest ever revenue in the history of the Company.

The consolidated EBITDA margin was at 10.7% in FY 2022-23 as compared to 9.6% in FY 2021-22. EBIT margin stood at 3.6% in FY 2022-23 as compared to 0.7% for FY 2021-22. Profit for the period (including share of associates and joint ventures) stood at Rs.2,690 crore in FY 2022-23 as compared to loss of (Rs.11,309 crore) in FY 2021-22.

The free cash flow (auto) was positive at Rs.7840 crore in FY 2022-23 compared to a free cash flow (auto) negative at Rs.9,472 crore in FY 2021-22.

Please refer to the paragraph on Operating Results in the Management Discussion & Analysis section for detailed analysis.

Standalone revenue from operations (including joint operations, excluding discontinued operations) was Rs.65,757 crore in FY 2022-23 which was 39% higher than the revenue of Rs.47,264 crore in FY 2021-22. The profit before and after tax (including joint operations) for FY 2022-23 were Rs.1,255 crore and Rs.2,728 crore, respectively as compared to loss before and after tax (including joint operations) of Rs.1,640 crore and Rs.1,391 crore, respectively for FY 2021-22. The Company has recognized deferred tax asset of Rs.1,615 crore because of arising from planned divestments which will yield capital gains against which such unabsorbed depreciation and capital loss will be set off.

Jaguar Land Rover (Rs.JLRRs.), (as per IFRS) recorded revenue of GBP 22.8 billion in FY 2022-23 compared to GBP 18.3 billion in FY 2021-22, up by 24.5%. For FY 2022-23, wholesales (excluding China joint venture) were 3,21,362, up by 9% and retails were 3,54,662, down by 6%. This reflects the continued improvement we are seeing in the ongoing semiconductor constraints, while FY 2021-22 retails were supported by one time inventory reductions. While full year financial results reflect the constrained sales volumes, the continuing reduction in our breakeven point through revenue and cost

management under the Refocus transformation programme enabled the Company to achieve positive margins and cash flow for the year. Loss before tax and exceptional items was GBP 64 million in FY 2022-23, an improvement compared to the GBP 412 million loss before tax and exceptional items in FY 2021-22, reflecting the improvement in y-o-y volumes.

DIVIDEND

Dividend Distribution Policy

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

Declaration and Payment of Dividend

Considering the CompanyRs.s improved financial performance, the Board is pleased to recommend a dividend of Rs.2.00 per Ordinary share of Rs.2.00 each (100%) and Rs.2.10 per Rs.ARs. Ordinary share of Rs.2.00 each (105%) for FY 2022-23. The Board has recommended such dividend based on the parameters laid down in the Policy and dividend will be paid out of the profits for the year.

The said dividend, if approved by the Members at the ensuing Annual General Meeting (Rs.the AGM") will be paid to those Members whose name appears on the register of Members (including Beneficial Owners) of the Company as at the end of July 29, 2023. The said dividend, if approved by the Members, would involve cash outflow of Rs.771 crore, resulting in a payout of 28% of the standalone net profit of the Company for FY 2022-23.

Pursuant to the Finance Act, 2020, dividend income is taxable in the hands of the Members w.e.f. April 1, 2020 and the Company is required to deduct tax at source from dividend paid to the Members at prescribed rates as per the Income Tax Act, 1961.

Book Closure and Record Date

The Register of Members and Share Transfer Books of the Company will be closed from Saturday, July 29, 2023, to Tuesday, August 8, 2023 (both days inclusive) and the Company has fixed Saturday, July 29, 2023 as the "Record Date" for the purpose of determining the entitlement of Members to receive final dividend for the financial year ended March 31, 2023.

BOARDRs.S REPORT

TRANSFER TO RESERVES

The Board of Directors has decided to retain the entire amount of profit for FY 2022-23 in the distributable retained earnings.

An amount of Rs. 199.80 crore and Rs. 1.30 crore was transferred from Debenture Redemption Reserve and Share based payments reserve respectively, to distributable retained earnings, as at March 31, 2023.

BUSINESS PERFORMANCE

Tata Motors Group sales for FY 2022-23 stood at 12,84,898 vehicles, up by 24% as compared to FY 2021-22. Global sales of all Commercial Vehicles were 4,22,580 vehicles, while sales of Passenger Vehicles were at 8,62,318 vehicles.

Please refer to the paragraph on Overview of Automotive Operations in the Management Discussion & Analysis section for detailed analysis.

Commercial Vehicles (Rs.CVRs.)

The Indian CV Industry continued the growth trajectory and overall, the industry saw a robust growth of 34% in wholesale and 38% by VAHAN registrations in FY 2022-23. This growth was primarily led by the Medium and Heavy Commercial Vehicle (Rs.M&HCVsRs.) (+52.4% vs FY 2022-23) and continued robust recovery in passenger carriers (+155% in FY 2022-23). This growth was catalysed by robust demand for heavy trucks required to service the strong infrastructure push by the Government of India and increased activity in e-commerce, construction, and mining. Higher replacement demand, advance buying in anticipation of price hikes, further buoyed the demand in Q4 FY 2022-23. Overall, Tata Motors CV domestic sale in FY 2022-23 was 22% higher than in FY 2021-22, while domestic VAHAN registrations volumes were 29% higher than FY 2021-22.

CV business recorded its highest ever revenue for the quarter Q4 FY 2022-23 and for the FY 2022-23. We revised our operating model to deliver "Profitable Growth". Shifting gears from "supply chain push" to "retail pull", which impacted registration VAHAN market share in October 2022, however, the share has sequentially grown thereafter in second half.

CV business improved on key customer facing metrics and its Net Promoter Score and Brand power increased by 300bps and 170 bps, respectively to reach their highest ever levels. The business also improved its Composite Customer Satisfaction Index from 792 to 813 (+3%) in FY 2022-23.

The CV Business transitioned its entire portfolio to BSVI Phase II with improved competitiveness. In FY 2022-23, 40+ products and 150+ variants were launched. The business also shared

its Green portfolio plans through 14 exhibits across all future powertrain technologies at Auto Expo23.

Tata Motors achieved Industry Leadership band in Tata Business Excellence Model (Rs.TBEMRs.) external assessment qualifying for JRD QV award, with significant jump in score across categories. Tata Motors CV was assigned Level-5, Exemplary category in recent CII Total Cost Maturity (Rs.TCMRs.) assessment, the highest achieved score by any organization.

CV exports, remained subdued due to the prevailing economic situation in most overseas markets. In FY 2022-23 the export shipments were 42% lower than FY 2021-22, while revenue was down by 22% due to improved mix. Major drop was witnessed in the SAARC region (-62%) driven by Total Industry Volume (Rs.TIVRs.) softening, forex shortages, and liquidity crunch in the latter half of the year. MENA and ASEAN regions witnessed 6% y-o-y growth in exports. The business retained or grew its market share and also sequentially improved margins across most markets.

Please refer to the paragraph on Commercial Vehicles in India in the Management Discussion & Analysis section for detailed analysis.

Passenger Vehicles (Rs.PVRs.)

The PV industry recorded 27% y-o-y wholesale growth in FY 2022-23. The industry recorded highest ever annual wholesale volumes of 3.8 million in FY 2022-23. Sports Utility Vehicle (Rs.SUVsRs.) continue to garner larger share of sales in the market. The growth has come on the back of pent-up demand in the first half of FY 2022-23, exciting launches, good festive demand and overall increase in supplies. Share of SUVs increased to 43.1% in FY 2022-23, 3% higher than FY 202122 and share of Hatches decreased to 34.5% in FY 2022-23, 3.1% lower than FY 2021-22. Share of Sedans, MPVs and Vans remained flat at around 10.5%, 8.5% and 3.5%, respectively.

In FY 2022-23, the PV business crossed the coveted milestone of 5 lakh annual vehicle sales first time in the history and became the 3rd manufacturer to do so in the Indian market. Domestic wholesale volumes were 539K and VAHAN market share stood at 13.5% in FY 2022-23, an increase of 210bps vis-a-vis FY 2021-22. The growth has come on the back of continued response for the product range, thoughtful Rs.New ForeverRs. interventions, multi-powertrain options, focused reimagining initiative towards demand generation and consistent increase in supplies. For the year FY 2022-23, the SUV segment achieved market share of 21.4% and emerged as #1 SUV manufacturer for FY 2022-23.

In January 2023 at Auto Expo, 12 promising showcases which include Avinya, Sierra EV, Harrier EV, Curvv ICE, Altroz and Punch CNG with twin cylinder technology and Altroz

Cafe racer were displayed. The #DARK (Red Hot Dark) versions for Nexon, Harrier and Safari were launched in February 2023, extending the lineage of the iconic #DARK philosophy and already established strong design, these SUVs exude dynamism through the newly added Carnelian Red highlights, giving it an exclusive premium feel combined with a bold look. Harrier and Safari were further enhanced with a desirable larger infotainment Screen of 26.03 cm (10.25 inch) and 10 new ADAS features.

PV exports for FY 2022-23 closed at 2,451 units, 36% higher than previous year, largely on account of market recovery and penetration of Electric Vehicle in Nepal. Major highlights for FY 2022-23 was that the business achieved highest ever shipment market share of 50.1% in Nepal. Nexon remained the highest selling Brand name and Tigor remained the highest selling Sedan in Nepal.

Please refer to the paragraph on Tata Passenger Vehicles in the Management Discussion & Analysis section for detailed analysis.

Electric Vehicles (Rs.EVRs.)

EV industry witnessed significant growth in FY 2022-23 owing to progressive EV polices launched by multiple state governments, launch of new products, proliferation of public charging infrastructure, increasing awareness of home charging and increasing acceptance of EVs amongst customers. The industry grew by Rs.170% from Rs.22,000 in FY 2021-22 to Rs.59,000 in FY 2022-23. EV fleet demand has seen a considerable growth in FY 2022-23 as corporates started Rs.work-from-officeRs. and people re-started using ride hailing services with receding of Covid-19 scare. In addition, owing to commitment towards sustainability, both Corporates and Ride hailing companies, are driving the agenda of converting respective fleets to electric.

Tata Motors continued to lead the charge in EVs and crossed 50,000 units (50,0043) sales, including International business sales, in FY 2022-23 registering growth of 154% over FY 202122. We exited Q4 FY 2021-23 with EV penetration Rs.12% in our portfolio. In addition, given our compelling offering, the Tigor EV, for the fleet segment and our continuous engagement with fleet operators, we garnered the largest share of the orders floated across industry. In FY 2022-23, we signed MoUs for deploying over 45,000 EVs to multiple service providers.

JAGUAR LAND ROVER (Rs.JLRRs.)

JLR wholesales (excluding the China joint venture) were 3,21,362 vehicles in FY 2022-23, up 9% compared to FY 2021-22 reflecting the gradual improvement in chip supplies. JLR retail sales (including the China joint venture) were 3,54,662 vehicles in

FY 2022-23, down 6% y-o-y as a result of destocking of inventory during FY 2021-22 creating a timing difference vs wholesales. Retail sales have been improving during FY 2022-23.

Please refer to the paragraph on JLR in the Management Discussion & Analysis section for detailed analysis.

Some of the key highlights of FY 2022-23 were:

• Order book at Rs.200,000 units remained strong but as expected was down from the peak of around 215,000 units.

• Ramp up of the new Range Rover and Range Rover Sport approaching target production levels.

• Demand for Defender remained well ahead of the expectations at launch and was the best-selling model in FY 2022-23. A third shift has been added in Nitra to meet customer demand.

• Strong engagement with chip suppliers continued to secure in calender year 2023 and 2024 supplies.

• Pricing and mix have been managed throughout the year to offset the impacts of inflation leading to an increase in average wholesale price to dealers from ?62k per unit in FY 2021-22 to ?71k per unit in FY 2022-23.

Tata Daewoo Commercial Vehicle Company Limited (Rs.TDCVRs.)

The revenues for FY 2022-23 were increased by 6.5% to KRW 937.89 billion as compared to KRW 880.74 billion in FY 2021-22. Overall sales volume increased by 0.4% to 9,493 units in FY 2022-23 from 9,454 units in FY 2021-22. From the second half of FY 2022-23, domestic sales were adversely impacted due to downturn in Korean economy, which was compensated by strong demand in exports.

Please refer to the paragraph on Tata Commercial Vehicles and Tata Passenger Vehicles in the Management Discussion & Analysis section for detailed analysis.

TMF Holdings Limited (Rs.TMFHLRs.)

Covid-19 linked concessions granted to creditors, affected the restructured book in first half of FY 2022-23, resulting in a sharp increase in credit losses during the year. The Company also increased provisions on restructured book to cover for expected losses. Tata Motors Finance Group Assets Under Management (Rs.AUMRs.) reduced by 4.2% y-o-y to Rs.43,338 crore, as against Rs.45,220 crore in the previous year. CV market share dropped to 17% due to aggressive competition from Banks in heavy commercial vehicle space. Net Income Margins shrunk from 5.2% to 5.0%, mainly on account of an increase in borrowing rates during the year. Gross Non-Performing Assets provision coverage increased from

BOARDRs.S REPORT

43% as of March 31, 2022 to 48% as of March 31, 2023. As a result, consolidated profit before tax for FY 2022-23 was at loss of Rs.993 crore as against profit of Rs.101 crore in FY 2021-22.

Please refer to the paragraph on Tata and other brand vehicles- Vehicle Financing in the Management Discussion & Analysis section for detailed analysis.

SHARE CAPITAL

During the year, the Company issued and allotted 6,82,318 Ordinary shares of Rs.2/- each of the Company, pursuant to exercise of stock options by the eligible employees of the Company and its subsidiary companies, under the Tata Motors Limited Employees Stock Option Scheme 2018. As a result of such allotment, the paid up share capital increased from Rs. 765,88,07311 (comprising of 3,82,91,64,903 equity share of Rs. 2/- each) to Rs. 766,01,71,947 (comprising of 3,82,98,47221 equity share of Rs. 2/- each). The shares so allotted rank pari-passu with the existing share capital of the Company. Expect as stated herein, there was no other change in the share capital of the Company.

FINANCE & CREDIT RATING

Despite challenges caused by supply chain issues at JLR, the Tata Motors Group managed its finances prudently, meeting the business needs and maintaining sufficient liquidity at all times to navigate the impact of external challenges. In FY 2022-23, owing to strong business performance, Tata Motors Limited prepaid some of its long-term borrowings, in line with its commitment to deleverage. The Company prudently managed its finances in rising interest rate scenario. The Company did not raise any long-term debt in FY 2022-23. As at March 31, 2023, the Group liquidity for domestic operations was Rs.9,233 crore, whereas the liquidity at JLR was ? 5.3 bn (including unutilized credit facility of ?1.5 bn). The net debt for domestic operations stood at Rs.6,159 crore, whereas the net debt at JLR was ? 3.0 bn.

As business performance improved sequentially, the credit ratings of the Company underwent positive revisions. In February 2023, ICRA upgraded the outlook to Positive from Stable, whereas in April 2023, S&P upgraded the credit rating of the Company from BB-/Stable to BB/Stable.

Please refer to the paragraph on Credit Ratings in Corporate Governance Report and Liquidity and Capital Resources in the Management Discussion & Analysis section for detailed analysis.

Material Changes and Commitment Affecting the Financial Position

There are no material changes affecting the financial position of the Company subsequent to the close of the FY 2022-23 till the date of this Report.

CONSOLIDATED FINANCIAL STATEMENT

The consolidated financial statements of the Company and its subsidiaries for FY 2022-23 have been prepared in compliance with the applicable provisions of the Companies Act, 2013 (Rs.the ActRs.) and as stipulated under Regulation 33 of 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 AuditorRs.s Report thereon form part of this Annual Report.

Pursuant to Section 129(3) of the Act, a statement containing the salient features of the Financial Statement of the subsidiary companies is attached to the Financial Statement in Form AOC-1.

Further, pursuant to the provisions of Section 136 of the Act, the Company will make available the said financial statement of the subsidiary companies upon a request by any Member of the Company or its subsidiary companies. These financial statements of the Company and the subsidiary companies will also be kept open for inspection by any member. The members can send an e-mail to inv rel@tatamotors.com upto the date of the AGM and the same would also be available on the CompanyRs.s website URL: https://www. tatamotors.com/investors/annual-reports/

SUBSIDIARY, JOINT ARRANGEMENTS AND ASSOCIATE COMPANIES

The Company has 88 subsidiaries (15 direct and 73 indirect), 11 associate companies, 4 joint ventures and 2 joint operations as at March 31, 2023, as disclosed in the accounts.

A diagrammatic representation of the subsidiary structure is available on the CompanyRs.s website at: https://www. tatamotors.com/investors/annual-reports/

During FY 2022-23, the following changes have taken place in subsidiary / associates / joint venture companies:

• Trilix S.r.l, ceased to be Wholly Owned Subsidiary (Rs.WOSRs.) of Tata Motors Passenger Vehicles Limited (Rs.TMPVLRs.) and became a WOS of Tata Passenger Electric Mobility Limited (Rs.TPEMLRs.) w.e.f April 28, 2022.

• TML Smart City Mobility Solutions Limited was incorporated on May 25, 2022, as a direct subsidiary of Tata Motors Limited.

• TML Smart City Mobility Solutions (J&K) Private Limited was incorporated on October 13, 2022, as a direct subsidiary

of TML Smart City Mobility Solutions Limited, a direct subsidiary of Tata Motors Limited.

• JT Special Vehicles Private LimitedRs.s name was changed to Jaguar Land Rover Technology and Business Services Private Limited with effect from April 12, 2022.

• The Company during the year has completed the procedural requirements mentioned under the Share Purchase Agreement executed between Marcopolo S.A, Joint Venture Partner, Tata Marcopolo Motors Limited (Rs.TMMLRs.) and the Company for acquiring the entire shareholding in TMML held by Marcopolo SA. TMML became the CompanyRs.s WOS w.e.f August 29, 2022. The name of TMML was changed to Tata Motors Body Solutions Limited w.e.f. December 30, 2022.

• TPEML, a WOS of the Company recieved the second tranche of investment amount Rs.3,750 crore from TPG Rise Climate (Rs.TPGRs.) in January 2023, pursuant to the Shareholders Agreement (Rs.SHARs.) signed in November 2021. With this investment, TPG completed its investment of Rs.7,500 crore as contemplated in the SHA.

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 CompanyRs.s website URL: https:// investors.tatamotors.com/pdf/material.pdf

RISK MANAGEMENT

The Board of Directors of the Company has constituted a Risk Management Committee to frame, implement, monitor and review the Risk Management plan and to ensure its effectiveness.

Through an Enterprise Risk Management Program, the business units and the corporate functions address their short term, medium term and long terms risks. The Audit committee has an additional oversight on the financial risks and controls.

Please refer to the paragraph on the Risk factors in the Management Discussion & Analysis section for detailed analysis.

INTERNAL FINANCIAL CONTROL SYSTEMS AND ADEQUACY

The CompanyRs.s 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.

Please refer to the paragraph on Internal Control Systems and their Adequacy in the Management Discussion & Analysis section for detailed analysis.

HUMAN RESOURCES

Please refer to the paragraph on Human Resources / Industrial Relations in the Management Discussion & Analysis section for detailed analysis.

DIVERSITY AND INCLUSION

The Company believes that 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. 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 diversified leaders in near future.

The Company employed 7.64% women employees in FY 2022-23 vis- a-vis 4.97 % in FY 2021-22.

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

During FY 2022-23, the Company had received eleven complaints on sexual harassment of which six have been suitably closed in accordance with the CompanyRs.s processes. The pending cases are largely cases that were registered in Q4 FY 2022-23 and are in various stages of enquiry / redressal (of the five open cases, three have been closed as of May 12, 2023). The Company organized over 279 awareness workshops across various locations in order to cover flexible and temporary workforce, contractual staff, blue collar employees, new joiners etc. covering approximately 12,500 resources. An e- module on Prevention of Sexual Harrasment (Rs.POSHRs.) awareness is rolled out as a mandatory training for all permanent White collar employees from time to time and mandatory for new joiners on joining. In order to ensure uniform understanding and larger coverage, a video based awareness module has been developed in local languages

for the blue collar and contractual employees and is ready for deployment.

Tata Motors Limited Schemes (Rs.SchemesRs.)

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 (Rs.SBEB RegulationsRs.):

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

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

TML ESOP 2018

Pursuant to the approval of Members at the AGM held on August 3, 2018, the Company adopted TML ESOP 2018, in order to retain and incentivize key talent, for driving long term objectives of the Company and ensuring that employee payoffs match the long gestation period of certain key initiatives whilst simultaneously fostering ownership behavior and collaboration amongst employees. The TML ESOP 2018 was implemented for grant of not exceeding 1,38,00,000 Stock Options in aggregate to entitle the grantees to acquire, in one or more tranches, not exceeding 1,38,00,000 Ordinary Shares of the Company of the face value of Rs. 2/- each at an Exercise price of Rs. 345/- per share.

During the FY 2022-23 at the AGM held on July 4, 2022 Members approved amendment in TML ESOP 2018. As of March 31, 2023, out of the said 81,47,633 stock options so granted, 24,96,465 stock options have been vested, out of which 11,13,230 stock options have been exercised. Further, stock options 19,34,853 remained unvested and 2,72,335 stock options had been treated as lapsed and forfeited.

Subsequently, the Company had allotted 79,821 Ordinary Shares of Rs.2/- each during the period from April 1, 2023 to the date of this Report under TML ESOP 2018.

TML SLTI Scheme 2021

Pursuant to the approval of Members at the AGM held on July 30, 2021, the Company adopted TML SLTI Scheme 2021. The TML SLTI Scheme comprises of two reward mechanisms; (a) Performance Share Units, and (b) Stock Options. The objective of TML SLTI Scheme 2021 is to reward Eligible employees of the Company and of the subsidiary companies, to drive long term objectives of the Company, to motivate and retain employees by rewarding for their performance, to retain and incentivize key talent to

drive long term objectives of the Company, to ensure that the senior management employeesRs. compensation and benefits match the long gestation period of certain key initiatives; and to drive ownership behaviour and collaboration amongst employees.

In terms of T ML SLTI Scheme 2021, (i) Not exceeding 75,00,000 Ordinary Shares of the face value of Rs.2/- each fully paid up, and (ii) Not exceeding 14,00,000 Ordinary Shares of the face value of Rs.2/- each fully paid up; are available for 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 performance share units, as determined by Nomination and Remuneration Committee (Rs.NRCRs.).

During FY 2022-23, there has been no change in the TML SLTI Scheme 2021. In FY 2021-22, 8,39,650 stock options and 9,64,569 Performance share units were granted and in FY 2022-23, 659,186 Performance share units were granted. There were no performance share units vested or any shares issued on vesting during the year and no stock options and no performance share units had lapsed and forfeited.

The statutory disclosures as mandated under the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (Rs.SEBI Regulations 2021Rs.) and a certificate from the Secretarial Auditors confirming implementation of the above Schemes in accordance with SBEB Regulations and Members approval, will be available for electronic inspection by the Members during the AGM and is also hosted on the website of the Company URL: https://www.tatamotors.com/investors/ESOP/

PARTICULARS OF EMPLOYEES AND REMUNERATION

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 particulars of employees as required 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 separate Annexure forming part of this report. In terms of proviso to Section 136(1) of the Act, the Report and Accounts are being sent to the Shareholders, excluding the aforesaid Annexure. The said Statement is also open for inspection. Any member interested in obtaining a

copy of the same may write to the Company Secretary. None of the employees listed in the said Annexure are related to any Director of the Company.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations, the Business Responsibility and Sustainability Report (Rs.BRSRRs.) 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 CompanyRs.s website URL: https://www. tatamotors.com/investors/annual-reports/

SAFETY & HEALTH - PERFORMANCE & INITIATIVES

With continuation of Safety Excellence Journey, the Company has achieved another Fatality Free Year 2022-23. In our endeavor towards achieving benchmark safety culture, multiple initiatives were started last year which helped the Company improve on hazard mitigation and risk reduction.

The Company Leadership team conducted detailed review of safety management system in April 2022 and came up with a comprehensive Rs.Zero Incident PlanRs.. 31 themes and 51 major actions were initiated across the Company with a L2 leader leading 5 pillars of a plan each. For Hazard mitigation, first project to be launched was on identifying Critical to Safety Stations (Rs.CTSRs.) and mitigation of hazards through appropriate safety controls namely; S1 (People control), S2 (engineering control) and S3 (elimination/substitution or failsafe control) across the CompanyRs.s plant locations. This systematic approach towards hazard identification and mitigation helped the Company reduce injuries at 801 CTS stations by 33%. In FY 2022-23, the Company started focused contractor employee safety initiative for 2 critical areas where potential hazard is highest. These activities are vehicle movement/ store management and conservancy services. Over a year, 109 administrative/ 26 engineering safety controls were established in vehicle movement/store management and 69 administrative/8 engineering controls in conservancy operations. In addition, 72 Safety Kaizen exercises were done across locations with themes such as manual handling of material, safety implementation in logistics area, ladder/ stair safety and vehicle movement safety. In commercial safety, we launched a Rs.Model Workshop planRs. for our dealer workshops in all corners of the country. In this initiative a standardized safety management system was installed in workshops, Capability building on safety done, appointment

of a safety resource ensured and continuous improvement in safety initiated. In the first year of the program, 42 workshops across country were identified as a Rs.Model workshopsRs..

Tata Motors safety performance was monitored and reviewed through Pro-active Safety Index which is a combination of lag (Rs.TRCFR reductionRs.) and lead (18 lead safety measures) parameters. Focused training sessions on Root Cause Failure Analysis, Incident investigation techniques and I-care to improve risk perception among employees were conducted. Special Attention was given to impart training to new joiners to improve their capabilities on risk perception and working safely. Digital analytics is being leveraged for improved analysis and identifying focus areas.

In FY 2022-23, for the CompanyRs.s plants, Total Recordable Case Frequency Rate is reduced by 37% to 0.66, against 1.04 reported in FY 2021-22. Lost Time Injury Frequency Rate in FY 2022-23 reduced by 41% to 0.13 compared to 0.22 in FY 2021-22. Measure of Proactive Safety performance, Proactive Safety Index-2 (higher the better) was at 98.06% in FY 2022-23 compared to 70% in FY 2021-22.

The Company has robust governance mechanism for Occupational Safety & Health, where reviews are undertaken at multiple levels. The Safety, Health and Sustainability Committee of Board is an apex review body, which reviews performances quarterly, followed by monthly reviews by SHE Council, chaired by Executive Director. Further reviews at factory level are taken by Apex Committees (led by plant heads), various Sub-committees for Safety Standards and then the Factory Implementation committees . For Non-manufacturing areas, focused safety reviews happen at defined frequency at regional offices with Customer Service and Warehouse teams.

The Company adopted Rs.A Healthy WorkplaceRs. framework by "Arogya World" which is a NGO working to prevent noncommunicable diseases in India. In this framework, there are 2 distinct themes namely; non-communicable disease prevention & Emotional wellness. Various initiatives like Tobacco de-addiction, weight management program, healthy eating, supporting recovery, managing stress & manager sensitization program on stress signals were undertaken.

The Company provides "Employees Assistance Program"- a confidential, third party, free of cost counselling service for employees and dependants since April 2020. During FY 2022-23, 543 employees and dependents availed counselling service through helpline. 24 online sessions on Emotional wellbeing were organized and 4646 employees attended these sessions.

During FY 2022-23, the Company received recognition and accolades for Occupational Health & Safety. TBEM external assessors identified 2 safety practices- Rs.Critical to safety Stations and S1S2S3 safety controlsRs. & Rs.Proactive safety IndexRs. as a Promising Practices. The Company also received Gold award from OSSHAI for excellence in Occupational Health & safety. For Occupational health, the Company received Gold award in healthy workplace program by Arogya World.

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 (Rs.ENCONRs.) 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 2022-23 the said ENCON efforts contributed to energy savings of 34.42 lakh kWh electricity and 23,098 GJ of fuel, resulting into avoided emission of 5220 tCO2e and cost savings of Rs.4.89 crores to the Company. In FY 2022-23, the Company generated / sourced 81 million kWh of renewable electricity for its manufacturing operations, which amounts to 23.5 % of the total power consumption and contributed in avoidance of emission of 57427 tCO2e.

The Company generates renewable energy (RE) in-house through solar PV (photovoltaic) installations, off-site captive wind farms and through procurement of off-site wind and solar power through "Power Purchase Agreements" (Rs.PPARs.sRs.). As on FY 2022-23, the CompanyRs.s in-house installed Solar PV installation capacity is Pimpri (Pune) - 5.8 MWp; Chinchwad (Pune) - 0.435 MWp; Jamshedpur - 7.5 MWp; Pantnagar - 7 MWp; Lucknow - 4.07 MWp; and Dharwad - 1 MWp.

In FY 2022-23, the Company conserved a total of 8,09,036.3 lakh m3 of water through recycling effluent and rainwater harvesting, which is 21% of total water consumption. Two Plants achieved Water Neutral certification in FY 2022-23 and remaining Plants are working towards achieving the same. In FY 2022-23, 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 Rs.Zero Waste to LandfillRs. status for all its manufacturing operations.

CORPORATE SOCIAL RESPONSIBILITY

The brief outline of the Corporate Social Responsibility (Rs.CSRRs.) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year in the format prescribed in the Companies (Rs.CSR PolicyRs.) Rules, 2014 are set out in Annexure - 2 of this Report. The CSR Policy is available on CompanyRs.s website at URL: https: //investors.tata motors. 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 2022-23 is uploaded on the website of the Company and the same is available on https://www. tatamotors.com/investors/annual-reports/

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Appointment / Re-appointment

As reported last year, Mr Al-Noor Ramji (DIN: 00230865), was appointed as an Additional Director and Non-Executive Independent Director on the Board of the Company w.e.f May 1, 2022. Mr Om Prakash Bhatt (DIN: 00548091) and Mrs Hanne Birgitte Sorensen (DIN: 08035439) were reappointed as Non-Executive Independent Directors on the Board of the Company w.e.f May 9, 2022 and January 3, 2023, respectively. Aforesaid appointments were approved by the Members at the 77th AGM held on July 4, 2022.

The Board of Directors on the recommendation of NRC and in accordance with provisions of the Act and SEBI Listing Regulations has appointed Mrs Usha Sangwan (DIN: 02609263) as an Additional and Non-Executive Independent Director on the Board for a tenure of 5 years w.e.f. May 15, 2023, subject to approval of Members at this

AGM. She shall hold office as Additional Director upto the date of this AGM and is eligible for appointment as a Director.

In accordance with provisions of the Act and the Articles of Association of the Company, Mr N Chandrasekaran, NonExecutive Director (DIN: 00121863) is liable to retire by rotation at the ensuing and is eligible for re-appointment.

Mr Theirry Bollore (DIN: 08935293) vide letter dated November 16, 2022, tendered his resignation as the Chief Executive Officer of Jaguar Land Rover Automotive Plc, UK ("JLR"), a WOS of the Company due to personal reasons w.e.f. December 31, 2022. Consequent upon cessation of his aforesaid employment with JLR, Mr Thierry Bollore has resigned as Non-Executive Non-Independent Director of the Company w.e.f December 31, 2022.

The Board of Directors places on record their appreciation for contributions made by Mr Bollore during his tenure.

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

Independent Directors

In terms of Section 149 of the Act and the 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 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 and Regulation 16(1)(b) of the SEBI Listing Regulations. In terms of Regulation 25(8) of the 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 Independent Directors of the Company have undertaken requisite steps towards the inclusion of their names in the data bank of Independent Directors maintained with 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 (Rs.KMPsRs.) of the Company during FY 2022-23 were:

• Mr Girish Wagh, Executive Director

• Mr Pathamadai Balachandran Balaji, Group Chief Financial Officer

• Mr Maloy Kumar Gupta, Company Secretary

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 Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis, as required in terms of the SEBI Listing Regulations, is annexed to this Report.

MEETINGS OF THE BOARD

The Board of Directors held 6 (six) meetings during the FY 2022-23. For details, please refer to the Report on Corporate Governance, which forms 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

• StakeholdersRs. Relationship Committee

• Risk Management Committee

• Safety, Health and Sustainability Committee

• Technology Committed

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 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 provision 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 i ntended to obtain Di rectorsRs. 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

Please refer to the Paragraph on Familiarisation Programme in the CG Report for detailed analysis.

POLICY ON DIRECTORSRs. APPOINTMENT AND REMUNERATION

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

Selection and procedure for nomination and appointment of Directors

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

The NRC conducts a gap analysis to refresh the Board on a periodic basis, including each time a directorRs.s 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, KMPs and employees is as per the Remuneration Policy of the Company.

The said policy is also available on the CompanyRs.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 and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical behaviour. In line with the Tata Code of Conduct (Rs.TCoCRs.), 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 Wemployees to report to the management instances of unethical behaviour, actual or suspected, fraud or violation of the CompanyRs.s 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. All persons have 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 (Rs.CECRs.).

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

AUDIT

Statutory Audit

M/s B S R & Co. LLP, (Rs.BSRRs.) Chartered Accountants (ICAI Firm No. 101248W/ W-100022), were re-appointed as the Statutory Auditors of the Company for a tenure of 5 years commencing from the conclusion of the 77th AGM of the Company until the conclusion of the 82nd AGM of the Company to be held in the year 2027.

The Statutory AuditorRs.s Report does not contain any qualifications, reservations, adverse remarks or disclaimers.

Branch Audit

The Resolution authorizing the Board of Directors to appoint Branch Auditors for the purpose of auditing the accounts maintained at the Branch offices of the Company abroad is

being placed for approval of the Members in the Notice of the forthcoming AGM.

Secretarial Audit

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Director appointed M/s Parikh & Associates, (Registration No. - P1988MH009800), a firm of Company Secretaries in Practice to conduct the Secretarial Audit of the Company for the year ended March 31, 2023. The Report of the Secretarial Audit is annexed herewith as Annexure - 4. The said Secretarial Audit Report does not contain any qualification, reservations, adverse remarks and disclaimer.

Cost Audit & Cost Records

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, 2024. 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 Board on recommendations of the Audit Committee have approved the remuneration payable to the Cost Auditor, subject to ratification of their remuneration by the Members at the forthcoming AGM. The resolution approving the above proposal is being placed for approval of the Members in the Notice for this AGM.

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

OTHER DISCLOSURES

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts/ arrangements/ transactions entered by the Company during the FY 2022-23 with related parties were on an armRs.s length basis and in the ordinary course of business and approved by the Audit Committee. Certain transactions, which were repetitive in nature, were approved through omnibus route.

As per the SEBI Listing Regulations, if any Related Party Transactions (Rs.RPTRs.) exceeds Rs. 1,000 crore or 10% of the annual consolidated turnover as per the last audited financial statement whichever is lower, would be considered as material and would require Members approval. In this regard, during the year under review, the Company has taken necessary Members approval. However, there were no material transactions of the Company with any of its related parties as per the Act. Therefore the disclosure of the Related Party Transactions as required under Section 134(3)(h) of the Act in AOC-2 is not applicable to the Company for FY 2022-23 and, hence, the same is not required to be provided.

The details of RPTs during FY 2022-23, 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 the FY 2022-23, 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.

Pursuant to the requirements of the Act and the SEBI Listing Regulations the Company has formulated a policy on RPTs and is available on CompanyRs.s website URL: https:// investors. tatamotors.com/pdf/rpt-policy.pdf

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

As per Section 186 of the Act, the details of Loans, Guarantees or Investments made during FY 2022-23 are given below:

Rs.in crore

Name of Companies Nature of Transactions Loans Investments
TML Smart City Mobility Solutions Ltd. Equity infusion -- 5.00
Tata Motors Body Solutions Equity --
Ltd. (previously known as Tata investment 99.99
Motors Marcopolo Ltd.) Loan 15.00 --
TML CV Mobility Solutions Ltd. Equity infusion -- 44.95
TML CV Mobility Solutions Ltd. Loan 45.00 --

During FY 2022-23, 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.

DIRECTORSRs. 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 CompanyRs.s internal financial controls were adequate and effective during FY 2022-23.

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

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

b) 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 profit 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) t hey 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.

Please refer to the paragraph on Internal Control Systems and their Adequacy in the Management Discussion and Analysis report for detailed analysis.

SECRETARIAL STANDARDS

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively.

INVESTOR EDUCATION AND PROTECTION FUND

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

GENERAL

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

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

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

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

ACKNOWLEDGEMENTS

The Directors wish to convey their appreciation to all of the CompanyRs.s employees for their contribution towards the CompanyRs.s performance. The Directors would also like to thank the members, 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
N CHANDRASEKARAN
Chairman
Mumbai, May 12, 2023 (DIN: 00121863)

Annexure - 1

Details of Remuneration of Directors, Key Managerial Personnel and Employees and comparatives

[Pursuant to Section 197 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

1. a. The ratio of the remuneration of each Director to the median remuneration of the employees of the Company and the percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer and Company Secretary in the FY 2022-23:

Sr

No.

Names of Directors Designation Ratio of remuneration@ to median remuneration % increase in the remuneration
I Non-Executive Director(s)
1 Mr N Chandrasekaran111 Chairman- Non-Executive Director - -
2 Mr Om Prakash Bhatt Independent Director 10.22 76.27
3 Ms Hanne Sorenson Independent Director 10.18 86.87
4 Ms Vedika Bhandarkar Independent Director 9.89 75.57
5 Mr Kosaraju Veerayya Chowdary Independent Director 7.65 51.09
6 Mr Al Noor Ramji(2) Independent Director * *
7 Mr Mitsuhiko Yamashita Non-Executive & Non-Independent Director 7.61 52.01
8 Mr Thierry Bollore131 Non-Executive & Non-Independent Director * *
II Executive Director
9 Mr Girish Wagh141 Executive Director * *
III Key Managerial Personnel
1 Mr P B Balaji Group Chief Financial Officer N.A 21.07
2 Mr Maloy Kumar Gupta Company Secretary N.A *

* since the remuneration of these Directors/KMPs is only for the part of the current year/previous year the ratio of their remuneration to median and increase in remuneration is not comparable.

@ includes non executive remuneration which is payable on obtaining shareholderRs.s approval, being sought at the ensuing Annual General Meeting. Notes:

1) As a Policy, Mr N Chandrasekaran, Chairman, has abstained from receiving commission from the Company and hence not stated.

2) Appointed as an Independent Director of the Company, effective from May 1, 2022. Hence, his remuneration is not comparable.

3) Mr Bollore ceased to be Non Executive Director of the Company effective December 31, 2022. Hence, his remuneration is not comparable.

4) Appointed as an Executive Director of the Company effective July 1, 2021. Hence, his remuneration is not comparable.

b) A break-up of median remuneration for employees is given below:

Employee Group Median Remuneration Increase in the median
(Rs. in lakh) Remuneration (%)
White Collar 15.00 12.1
Blue Collar 9.15 15.2

The Median Remuneration of employees for the FY 2023 is Rs. 10.90 lakh. The percentage increased in the median remuneration of employees in the financial year was 17.6%.

2. The number of permanent employees on the rolls of Company as at March 31, 2023: 20,777

3. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

Employee group Average percentage increase / (decrease) in salaries for FY 2023

(in %)

All permanent (Blue Collar and White Collar) 12.40
White Collar 10.31
Blue collar 15.77
Executive Directors / Managerial Remuneration
Girish Wagh *

* since the remuneration of the Director is only for the part of the previous year the increase in remuneration is not comparable.

Note: Salaries for blue collar includes only TFP (as they are not given any performance linked bonus but have plant-wise wage revision at a set frequency). The annual variable/performance pay and the salary increment of managers is linked to the CompanyRs.s performance in general and their individual performance for the relevant year is measured against major performance areas which are closely aligned to CompanyRs.s objectives. The remuneration for white collar does not include Long Term Incentives.

5. Affirmation that the remuneration is as per the remuneration policy of the Company:

The Company confirms that the remuneration is as per the remuneration policy of the Company.

On behalf of the Board of Directors

N CHANDRASEKARAN
Chairman
(DIN: 00121863)
Mumbai, May 12, 2023

   

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