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Notes to Accounts of Tata Motors Ltd.

Mar 31, 2021

LEASES

The Company leases a number of buildings, plant and equipment, IT hardware and software assets, certain of which have a renewal and/ or purchase option in the normal course of the business. Extension and termination options are included in a number of leases across the Company. The majority of extension and termination options held are exercisable only by the Company and not by the respective lessor. The Company assesses at lease commencement whether it is reasonably certain to exercise the extension or termination option. The Company re-assesses whether it is reasonably certain to exercise options if there is a significant event or significant change in circumstances within its control. It is recognised that there is potential for lease term assumptions to change in the future due to the effects of the COVID-19 pandemic, and this will continue to be monitored by the Company where relevant. The Company''s leases mature between 2021 and 2029.

When measuring lease liability, the Company discounted lease payments using its incremental borrowing rate at April 1, 2019. The weighted average rate applied is 8.58 %.

IMPAIRMENT LOSSES/(REVERSAL) OF PASSENGER VEHICLE SEGMENT AND OTHER PROVISIONS(a) Impairment losses/(reversal) of Passenger vehicle segment

The Company tests its passenger vehicle cash generating unit (CGU) for impairment at feast annually and more frequently when there is an indication of impairment. An impairment loss is recognized if the recoverable amount is lower than the carrying value. The Company also periodically assesses if there are any triggers for reversal of previously recognised impairment loss. A reversal of impairment loss is recognised if there is a trigger for reversal and the recoverable value exceeds the carrying value.

As at March 31, 2020, the Company assessed the recoverable value for this CGU, due to refresh of its strategy in response to change in market conditions on account of various factors (economic environment, demand forecasts etc.) including COVID 19 pandemic. The recoverable value determined by Fair Value less Cost of Disposal (''FVLCD'') was lower than the carrying value of the CGU and this resulted in an impairment charge for the year ended March 31, 2020 recognised within ''Exceptional items''.

As at March 31, 2021, the Company identified certain triggers for reversal of the previously recorded impairment based on both external and internal indicators. Accordingly, the Company reassessed its estimates and determined the recoverable value for this CGU considering the significant improvement in the absolute and relative performance and outlook of the business when compared with the assumed performance at the time when the impairment loss was recorded. Based on this reassessment, the Company has reversed the initially recognised impairment for this CGU.

The key drivers for this improved performance include:

1. New and Improved product portfolio

2. Product positioning in segments where the Company did not have a presence earlier

3. Revamp of dealer and service network

4. Capacity de-bottlenecking

5. Cost reduction initiatives

In addition to the above, the post COVID pent up demand was a tailwind and the changing consumer preference towards personal mobility as well as changes to the economic outlook have improved the outlook on the industry. A combination of these factors enabled the Company to enhance it''s market share to 8.1% for the year ended March 31, 2021 as compared to 4.8% for the year ended March 31, 2020.

The recoverable value was determined using the Fair value less cost of disposal ("FVLCD"). CGU''s FVLCD has been valued using Comparable Company Market Multiple method (CCM). The average of enterprise value to sales multiple of Comparable Companies applied to actual sales of the CGU for year ended March 31, 2021 has been considered as the FVLCD as per CCM. The fair value of the CGU is as follows:

(b) Other provisions

During the year ended March 31, 2020, a provision had been recognized for certain supplier contracts ranging from 5 to 10 years, which had become onerous, as the Company estimated that it will procure lower quantities than committed and the costs will exceed the future economic benefit.

As at March 31, 2021, the Company has reassessed the onerous provision created and based on the revised volume outlook a reversal of provision aggregating ''777.00 crores has been accounted. During the year the Company has also made provision for estimated supplier claims of ''114.00 crores, which are under negotiations with supplier.

(2) The Company has given a letter of comfort to ANZ Bank, London for GBP 2 million (''20.15 crores as at March 31, 2021) against loar extended by the bank to Tata Motors European Technical Centre PLC. UK (TMETC). Also the Company has given an undertaking to ANZ Bank London to retain 51% ownership of TMETC at all times during the tenor of the loan.

(3) Includes option pricing value for call/ put option provided by the Company towards perpetual debt issued by TMF Holdings Limited.

(4) The Company has given a letter of comfort to Unicredit S.P.A., Italy for EUR 1.5 million (''12.87 crores as on March 31, 2021) against Credi Facility given to Trilix S.R.L. The Company will not dilute its stake in Trilix S.R.L. below 51% during the tenor of the facility.

(5) The Company has given a letter of comfort to Bank of China, Shanghai Branch for RMB 5,000 million (''5,578.50 crores as at March 31, 2021 against loan granted by the bank to Jaguar Land Rover (China) Investment Co. Ltd.

(6) The Company has given a letter of comfort to State Bank of India, Bahrain for USD 100 milion (''731.13 crores as on March 31, 2021 against Credit Facility given to TML Holding PTE Ltd., Singapore and a letter of comfort to Bank of Baroda, London for GBP 100 milion (''1,007.66 crores as on March 31, 2021) against the SBLC Facility extended to TML Holding PTE Ltd., Singapore.

(7) The Company has given a letter of comfort to Citi Corp International for USD 300 milion (''2,193.38 crores as on March 31, 2021) given to TML Holding PTE Ltd., Singapore against ECB Bonds

Earmarked balances with banks as at March 31, 2021 of ''316.83 crores (as at March 31, 2020 ''198.19 crores) is held as security in relation to repayment of borrowings.

Earmarked balances with banks as at March 31, 2021 includes restricted deposits of ''73.47 crores (as at March 31, 2020 ''Nil) towards Company''s contribution for Family Pension from October 1, 2019, in lieu of Tata Motors Pension Trust exemption surrender application pending with Employee Provident Fund Organization. Subsequent to the year end, these balances are transferred to Tata Motors Pension Trust.

During the year ended March 31, 2020, the Company has allotted 20,16,23,407 Ordinary Shares at a price of ''150 per Ordinary Share aggregating to ''3,024.35 crores and 23,13,33,871 Convertible Warrants (''Warrants''), each carrying a right to subscribe to one Ordinary Share per Warrant, at a price of ''150 per Warrant (''Warrant Price''), aggregating to ''3,470.00 crores on a preferential basis to Tata Sons Private Limited. An amount equivalent to 25% of the Warrant Price was paid at the time of subscription and the balance 75% of the Warrant Price was payable by the Warrant holder against each Warrant at the time of allotment of Ordinary Shares pursuant to exercise of the options attached to Warrant(s) to subscribe to Ordinary Share(s) by June 2021.The Company has fully utilised the amount of ''3,891.85 crores towards repayment of debt and other general corporate purposes of the Company and its subsidiaries.

During the quarter and year ended March 31, 2021, on exercise of options by Tata Sons Pvt Ltd and on receipt of the balance subscription money of ''2,602.51 crores, the Company has fully converted 23,13,33,871 convertible warrants into Ordinary Shares, that were issued during the year ended March 31, 2020. The Company has not utilised any of this amount as at March 31, 2021.

The entitlements to 4,92,559 Ordinary shares of ''2 each (as at March 31, 2020 : 4,92,559 Ordinary shares of ''2 each) and 2,33,214 ''A'' Ordinary shares of ''2 each (as at March 31, 2020: 2,33,214 ''A'' Ordinary shares of ''2 each) are subject matter of various suits filed in the courts / forums by third parties for which final order is awaited and hence kept in abeyance.

Rights, preferences and restrictions attached to shares :

(i) Ordinary shares and ''A'' Ordinary shares both of ''2 each :

• The Company has two classes of shares - the Ordinary shares and the ''A'' Ordinary shares both of ''2 each (together referred to as shares). In respect of every Ordinary share (whether fully or partly paid), voting rights shall be in the same proportion as the capital paid up on such Ordinary share bears to the total paid up Ordinary share capital of the Company. In case of every ''A'' Ordinary share, if any resolution is put to vote on a poll or by postal ballot at any general meeting of shareholders, the holder shall be entitled to one vote for every ten ''A'' Ordinary shares held as per the terms of its issue and if a resolution is put to vote on a show of hands, the holder of ''A'' Ordinary shares shall be entitled to the same number of votes as available to holders of Ordinary shares.

• The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. Further, the Board of Directors may also declare an interim dividend. The holders of ''A'' Ordinary shares shall be entitled to receive dividend for each financial year at five percentage point more than the aggregate rate of dividend declared on Ordinary shares for that financial year.

• In the event of liquidation, the shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholdings.

(ii) American Depository Shares (ADSs) and Global Depository Shares (GDSs) :

• Each ADS and GDS underlying the ADR and GDR respectively represents five Ordinary shares of ''2 each. A holder of ADS and GDS is not entitled to attend or vote at shareholders meetings. An ADS holder is entitled to issue voting instructions to the Depository with respect to the Ordinary shares represented by ADSs only in accordance with the provisions of the Company''s ADSs deposit agreement and Indian Law. The depository for the ADSs and GDSs shall exercise voting rights in respect of the deposited shares by issue of an appropriate proxy or power of attorney in terms of the respective deposit agreements.

• Shares issued upon conversion of ADSs and GDSs will rank pari passu with the existing Ordinary shares of ''2 each in all respects including entitlement of the dividend declared.

Notes to reserves

a) Capital redemption reserve

The Indian Companies Act, 2013 (the "Companies Act") requires that where a company purchases its own shares out of free reserves or securities premium account, a sum equal to the nominal value of the shares so purchased shall be transferred to a capital redemption reserve account and details of such transfer shall be disclosed in the balance sheet. The capital redemption reserve account may be applied by the company, in paying up unissued shares of the company to be issued to shareholders of the company as fully paid bonus shares. Tata Motors Limited established this reserve pursuant to the redemption of preference shares issued in earlier years.

b) Debenture redemption reserve (DRR)

The Companies Act requires that where a company issues debentures, it shall create a debenture redemption reserve out of profits of the Company available for payment of dividend. The company is required to maintain a Debenture Redemption Reserve of 25% of the value of debentures issued, either by a public issue or on a private placement basis. The amounts credited to the debenture redemption reserve may not be utilised by the Company except to redeem debentures. No DRR is required for debentures issued after August 16, 2019.

c) Securities premium

The amount received in excess of face value of the equity shares is recognised in Securities Premium.

d) Retained earnings

Retained earnings are the profits that the Company has earned till date.

e) Capital reserve

The capital reserve represents the excess of the identifiable assets and liabilities over the consideration paid.

f) Dividends

The final dividend is recommended by the Board of Directors and is recorded in the books of accounts upon its approval by the Shareholders. For the year ended March 31, 2021 and 2020 , considering the accumulated losses in the Tata Motors Limited Standalone, no dividend was permitted to be paid to the members, as per the Companies Act, 2013 and the rules framed thereunder.

g) Share-based payments reserve

Share-based payments reserve represents amount of fair value, as on the date of grant, of unvested options and vested options not exercised till date, that have been recognised as expense in the statement of profit and loss till date.

Information regarding long-term borrowings

(i) Nature of security (on loans including interest accrued thereon) :

(a) The term Loan of ''3,000.00 crores from HDFC Ltd, (recorded in books at ''2,992.85 crores) is due for repayment from the quarter ending June 30, 2022 to quarter ending June 30, 2026, along with a simple interest of 8.50% p.a. The loan is secured by a charge over Company''s LeasehoLd Land together with buiLding structures, pLant and machinery, fixtures and other assets.

(b) The term loan of ''587.08 crores (recorded in books at ''176.67 crores) is due for repayment from the quarter ending March 31, 2033

to quarter ending March 31, 2039, along with simple interest at the rate of 0.10% p.a. The loan is secured by a second and subservient

charge (creation of charge is under process) over Company''s freehold land together with immovable properties, plant and machinery and other movable assets (excluding stock and book debts) situated at Sanand plant in the State of Gujarat.

(c) The term loan of ''112.82 crores (recorded in books at ''37.34 crores) is due for repayment from the quarter ending June 30, 2030

to March 31, 2034, along with a simple interest of 0.01% p.a. The loan is secured by bank guarantee for the due performance of the conditions as per the terms of the agreement.

(d) Term loan from banks of ''521.07 crores included within Long-term borrowings and ''187.89 crores included within Current maturities of Long-term borrowings in note 26, bearing floating interest rate of 1 month LIBOR 1.63% and 6 months MCLR 0.60% are taken by joint

operation Fiat India Automobiles Private Ltd which is due for repayment from June 2021 to September 2025. The loan is secured by first charge over movable fixed assets procured from its loan/jeep project.

The external commercial borrowings of USD 237.47 million (''1,721.12 crores) bearing floating interest rate of 3 months LIBOR 128bps is due for repayment in June 2025.

The buyer''s line of credit from banks bearing floating interest ranging from 6.42% to 8.85%, amounting to ''3,083.33 crores is repayable within a maximum period of seven years from the drawdown dates. All the repayments are due from period ending September 30, 2021 to June 30, 2026. The Buyer''s line of credit of ''291.67 crores classified under other financial liabilities-current being maturity before March 31, 2022.

II. Information regarding short-term borrowings

(i) Loans, cash credits, overdrafts and buyers line of credit from banks bearing fixed interest rate from 5.05% to 7.00% are secured by hypothecation of existing current assets of the Company viz. stock of raw materials, stock in process, semi-finished goods, stores and spares not relating to plant and machinery (consumable stores and spares), bills receivable and book debts including receivable from hire purchase / leasing and all other moveable current assets except cash and bank balances, loans and advances of the Company both present and future.

(ii) Inter-corporate deposits from subsidiaries and associates are unsecured bearing interest rate at 6.00%

(iii) Commercial paper are unsecured short-term papers issued at discount bearing no coupon interest. The yield on commercial paper issued by the Company ranges from 6.83% to 7.33%

1. Tata Motors Limited (TML) has presently, decided not to opt for the New Tax Regime inserted as section 115BAA of the Income-tax Act, 1961 and enacted by the Taxation Laws (Amendment) Ordinance, 2019 ("the Ordinance”) which is applicable from Financial Year beginning April 1, 2019. TML has accordingly applied the existing tax rates in the financial statements for the year ended March 31, 2021.

2. In case of Tata Cummins Ltd, the new section 115BBA has been inserted in the Income tax Act, 1961 to give benefit of a reduced corporate tax rate for domestic companies. Section 115BBA states that the domestic companies have the option to pay tax a rate of 25.168% from FY 2019-20 (AY 2020-21) During the current year, while filing Income Tax Return for FY 19-20 the Company has adopted and shifted to the new tax regime from FY 19-20. The impact on tax due to this rate change has been disclosed above. In the current financial year, owing to the adoption of the new tax regime, the existing MAT credit is derecognized in the financial statements in accordance with the tax laws

(b) Government incentives include ''101.01 crores as at March 31, 2021 (''148.11 crores as at March 31, 2020) grants relating to property,

plant and equipment related to duty saved on import of capital goods and spares under the Exports Promotion Capital Goods (EPCG) scheme. Under such scheme, the Company is committed to export prescribed times of the duty saved on import of capital goods over a specified period of time. In case such commitments are not met, the Company would be required to pay the duty saved along with interest to the regulatory authorities.

Share based payments

The Company has allotted share based incentives to certain employees during the year ended March 31, 2019, under Tata Motors Limited Employee Stock Options Scheme 2018 approved by Nomination and Remuneration Committee (NRC). As per the scheme, the number of shares that will vest is conditional upon certain performance measures determined by NRC. The performance is measured over vesting period of the options granted which ranges from 3 to 5 years. The performance measures under this scheme include growth in sales, earnings and free cash flow. The options granted under this scheme is exercisable by employees till one year from date of its vesting. The Company has granted options at an exercise price of ''345/-. Option granted will vest equally each year starting from 3 years from date of grant up to 5 years from date of grant. Number of shares that will vest range from 0.5 to 1.5 per option granted depending on performance measures.

( c) Works operation and other expenses for the year March 31, 2021 includes ''23.99 crores (''22.72 crores for the year March 31, 2020) spent by Tata Motors Ltd on standalone basis excluding interest in the joint operations, towards various schemes of Corporate Social Responsibility (CSR) as prescribed under Section 135 of the Companies Act, 2013. No amount has been spent on construction / acquisition of an asset of the Company. The prescribed CSR expenditure required to be spent in the year 2020-21 as per the Companies Act, 2013 is ''Nil, in view of average net profits of the Company being ''Nil (under section 198 of the Act) for last three financial years.

(d) Works operation and other expenses include remuneration payable to non- executive independent directors aggregating ''1.70 crores which is subject to approval of the shareholders, which the Company proposes to obtain in the forthcoming Annual General Meeting, in accordance with the provisions of the Companies Act, 2013.

(e) During the year ended March 31, 2020, provision for certain Indirect taxes for matters under litigation for FY 2002 to FY 2006 were made for ''241.25 crores, which is included in other expenses.

38. EXCEPTIONAL ITEMS

Exceptional amount of ''114.00 crores and ''(73.03) crores during the year ended March 31, 2021 and 2020, is related to write off/provision (reversal) of certain property, plant and equipment, capital work-in-progress and intangibles under development.

39. COMMITMENTS AND CONTINGENCIES

In the ordinary course of business, the Company faces claims and assertions by various parties. The Company assesses such claims and assertions and monitors the legal environment on an ongoing basis, with the assistance of external legal counsel, wherever necessary. The Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosure in the financial statements but does not record a liability in its accounts unless the loss becomes probable.

The following is a description of claims and assertions where a potential loss is possible, but not probable. The Company believes that none of the contingencies described below would have a material adverse effect on the Company''s financial condition, results of operations or cash flows.

Litigation

The Company is involved in legal proceedings, both as plaintiff and as defendant. There are claims which the Company does not believe to be of material nature, other than those described below.

Income Tax

The Company has ongoing disputes with income tax authorities relating to tax treatment of certain items. These mainly include disallowed expenses, the tax treatment of certain expenses claimed by the Company as deductions and the computation of, or eligibility of, the Company''s use of certain tax incentives or allowances.

Most of these disputes and/or disallowances, being repetitive in nature, have been raised by the income tax authorities consistently in most of the years.

The Company has a right of appeal to the Commissioner of Income Tax (Appeals), or CIT (A), the Dispute Resolution Panel, or DRP, and to the Income Tax Appellate Tribunal, or ITAT, against adverse decisions by the assessing officer, DRP or CIT (A), as applicable. The income tax authorities have similar rights of appeal to the ITAT against adverse decisions by the CIT (A) or DRP. The Company has a further right of appeal to the Bombay High Court or the Hon''ble Supreme Court of India against adverse decisions by the appellate authorities for matters involving substantial question of law. The income tax authorities have similar rights of appeal.

As at March 31, 2021, there are contingent liabilities towards matters and/or disputes pending in appeal amounting to ''101.89 crores (''90.21 crores as at March 31, 2020).

Customs, Excise Duty and Service Tax

As at March 31, 2021, there are pending litigation for various matters relating to customs, excise duty and service taxes involving demands, including interest and penalties, of ''580.45 crores (''603.87 crores as at March 31, 2020). These demands challenged the basis of valuation of the Company''s products and denied the Company''s claims of Central Value Added Tax, or CENVAT credit on inputs. The details of the demands for more than ''100 crores are as follows:

As at March 31, 2021, the Excise Authorities have raised a demand and penalty of ''268.27 crores, (''268.27 crores as at March 31, 2020), due to the classification of certain chassis (as goods transport vehicles instead of dumpers) which were sent to automotive body builders by the Company, which the Excise Authorities claim requires the payment of the National Calamity Contingent Duty (NCCD). The Company has obtained a technical expert certificate on the classification. The appeal is pending before the Custom Excise & Service Tax Appellate Tribunal.

Sales Tax/VAT

The total sales tax demands (including interest and penalty), that are being contested by the Company amount to ''1,359.51 crores as at March 31, 2021 (''914.12 crores as at March 31, 2020). The details of the demands for more than ''100 crores are as follows:

The Sales Tax Authorities have raised demand of ''326.85 crores as at March 31, 2021 (''207.80 crores as at March 31, 2020) towards rejection of certain statutory forms for concessional lower/nil tax rate (Form F and Form C) on technical grounds and few other issues such as late submission, single form issued against different months / quarters dispatches / sales, etc. and denial of exemption from tax in absence of proof of export for certain years. The Company has contended that the benefit cannot be denied on technicalities, which are being complied with. The matter is pending at various levels.

The Sales Tax authorities have denied input tax credit and levied interest and penalty thereon due to varied reasons aggregating to ''270.50 crores as at March 31, 2021 (''221.77 crores as at March 31, 2020). The reasons for disallowing credit was mainly due to Taxes not paid by Vendors, incorrect method of calculation of set off as per the department, alleging suppression of sales as per the department etc. The matter is contested in appeal.

The Sales Tax authorities have raised demand for Check post/ Entry Tax liability at various states amounting to ''434.59 crores as at March 31, 2021 (''65.81 crores as at March 31, 2020). The company is contesting this issue.

The Sales Tax Authorities have raised demand of ''148.84 crores as at March 31, 2021 (''148.84 crores as at March 31, 2020) towards full CST liability on Chassis exported after enroot body building and interest thereon considering as CST sale. The Company has contended that the Company''s manufacturing plant dispatching chassis for enroot body building to bodybuilders as bill to the Company and ship to bodybuilders is constituted as export sale after Chassis export. The matter is contested in appeal.

Other Taxes and Dues

Other amounts for which the Company may contingently be liable aggregate to ''231.53 crores as at March 31, 2021 (''288.17 crores as at March 31, 2020). Following are the cases involving more than ''100 crores:

Other claims

The Hon''ble Supreme Court of India ("SC") by their order dated February 28, 2019, set out the principles based on which allowances paid to the employees should be identified for inclusion in basic wages for the purposes of computation of Provident Fund contribution. There are interpretative challenges and considerable uncertainty, including estimating the amount retrospectively. Pending the directions from the EPFO, the impact for past periods, if any, is not ascertainable reliably and consequently no financial effect has been provided for in the financial statements. The Company has complied with this on a prospective basis, from the date of the SC order.

The Company has, consequent to an Order of the Hon''ble Supreme Court of India in the case of R.C.Gupta Ors. Vs Regional Provident Fund Organisation and Ors., evaluated the impact on its employee pension scheme and concluded that this is not applicable to the Company based on external legal opinion and hence it is not probable that there will be an outflow of resources. Further, a Supreme Court of India bench, allowed the review petitions filed by the Employees Provident Fund Organisation (EPFO) and decided to reconsider the previous order that permitted grant of Provident Fund pension on last drawn salary. The Supreme Court has recalled its 2019 order which had paved way for pension on last drawn salary for employees by removing the current salary ceiling of ''15,000.

Commitments

The Company has entered into various contracts with vendors and contractors for the acquisition of plant and machinery, equipment and various civil contracts of a capital nature amounting to ''957.16 crores as at March 31, 2021 (''1,320.67 crores as at March 31, 2020), which are yet to be executed.

The Company has entered into various contracts with vendors and contractors for the acquisition of intangible assets of a capital nature amounting to ''99.64 crores as at March 31, 2021, (''146.15 crores as at March 31, 2020), which are yet to be executed.

The Company has contractual obligation towards Purchase Commitment (net of provisions) for ''2024.00 crores as at March 31, 2021 (''1,374.00 crores as at March 31, 2020).

tmpioyee stock options ai e not consider eo to be ouutive based on the avei aye mar ket pi ice or oi oinai y snai es oui iny the pei ioo.

41. CAPITAL MANAGEMENT

The Company''s capital management is intended to create value for shareholders by facilitating the meeting of long-term and short-term goals of the Company.

The Company determines the amount of capital required on the basis of annual operating plans and long-tern product and other strategic investment plans. The funding requirements are met through equity, non-convertible debentures, senior notes and other long-term/short-term borrowlnys. The Company''s policy is aimed at combination of short-term and long-tern borrowings.

The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

Total borrowings includes all long and short-term borrowings as disclosed in notes 23, 24 and 26 (a) to the financial statements. Equity comprises all components excluding (profit)/loss on cash flow hedges.

Fair Value Hierarchy

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1 to Level 3, as described below.

Quoted prices in an active market (Level 1): This level of hierarchy includes financial instruments that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of quoted equity shares, quoted corporate debt instruments and mutual fund investments.

Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities, measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e; as prices) or indirectly (i.e; derived from prices). This level of hierarchy include Company''s over-the-counter (OTC) derivative contracts.

Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

There has been no transfers between level 1, level 2 and level 3 for the year ended March 31, 2021 and 2020.

Costs of certain unquoted equity instruments have been considered as an appropriate estimate of fair value because these investments are subject to a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range. These investments in equity instruments are not held for trading. Instead, they are held for medium or long term strategic purpose. Upon the application of Ind AS 109, the Company has chosen to designate these investments in equity instruments at FVTOCI as the directors believes this provides a more meaningful presentation for medium or long term strategic investments, than reflecting changes in fair value in profit or loss.

The fair value of borrowings which have a quoted market price in an active market is based on its market price and for other borrowings the fair value is estimated by discounting expected future cash flows, using a discount rate equivalent to the risk-free rate of return, adjusted for the credit spread considered by the lenders for instruments of similar maturity.

Management uses its best judgment in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, substantially for all financial instruments, the fair value estimates presented above are not necessarily indicative of all the amounts that the Company could have realised or paid in sale transactions as of respective dates. As such, the fair value of the financial instruments subsequent to the respective reporting dates may be different from the amounts reported at each year end.

Offsetting

Certain financial assets and financial liabilities are subject to offsetting where there is currently a legally enforceable right to set off recognised amounts and the Company intends to either settle on a net basis, or to realise the asset and settle the liability, simultaneously.

Certain derivative financial assets and financial liabilities are subject to master netting arrangements, whereby in the case of insolvency, derivative

(c) Financial risk management

In the course of its business, the Company is exposed primarily to fluctuations in foreign currency exchange rates, interest rates, equity prices, liquidity and credit risk, which may adversely impact the fair value of its financial instruments.

The Company has a risk management policy which not only covers the foreign exchange risks but also other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the board of directors. The risk management framework aims to:

• Create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the Company''s business plan.

• Achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.

(i) Market risk

Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

(a) Foreign currency exchange rate risk:

The fluctuation in foreign currency exchange rates may have potential impact on the income statement, statement of comprehensive income, balance sheet, statement of changes in equity and statement of cash flows where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency.

Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in U.S. dollar, Euro and GBP against the respective functional currencies of the Company.

The Company, as per its risk management policy, uses foreign exchange and other derivative instruments primarily to hedge foreign exchange and interest rate exposure. Any weakening of the functional currency may impact the Company''s cost of exports and cost of borrowings and consequently may increase the cost of financing the Company''s capital expenditures.

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in accordance with its risk management policies.

The foreign exchange rate sensitivity is calculated for each currency by aggregation of the net foreign exchange rate exposure of each currency and a simultaneous parallel foreign exchange rates shift in the foreign exchange rates of each currency by 10% while keeping the other variables as constant.

The exposure as indicated below is mitigated by some of the derivative contracts entered into by the Company as disclosed in (iv) derivative financial instruments and risk management below.

The following table sets forth information relating to foreign currency exposure (other than risk arising from derivatives disclosed at clause (iv) below) as of March 31, 2021:

1 Others mainly include currencies such as the Russian ruble, Japanese yen, Swiss franc, Indonesian Rupiahs, Thai bahts and Korean won.

10% appreciation/depreciation of the respective foreign currencies with respect to functional currency of the Company would result in decrease/increase in the Company''s net profit/(loss) before tax by approximately ''39.88 crores and ''719.28 crores for financial assets and financial liabilities respectively for the year ended March 31, 2021.

The following table sets forth information relating to foreign currency exposure (other than risk arising from derivatives disclosed at clause (iv) below) as of March 31, 2020:

2 Others mainly include currencies such as the Russian ruble, Japanese yen, Swiss franc, Australian dollars, South African rand and Korean won.

10% appreciation/depreciation of the respective foreign currencies with respect to functional currency of the Company would result in decrease/increase in the Company''s net profit/(loss) before tax by approximately ''145.71 crores and ''980.21 crores for financial assets and financial liabilities, respectively for the year ended March 31, 2020.

(Note: The impact is indicated on the profit/(loss) before tax basis.)

(b) Interest rate risk

Interest rate risk is the risk that changes in market interest rates will lead to changes in fair value of financial instruments or changes in interest income, expense and cash flows of the Company.

The Company is subject to variable interest rates on some of its interest bearing liabilities. The Company''s interest rate exposure is mainly related to debt obligations. The Company also uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund requirements for its day to day operations like short term loans.

As at March 31, 2021 and 2020, financial liabilities of ''5,843.60 crores and ''6,638.55 crores, respectively, were subject to variable interest rates. Increase/decrease of 100 basis points in interest rates at the balance sheet date would result in decrease/increase in profit/(loss) before tax of ''58.44 crores and ''66.39 crores for the year ended March 31, 2021 and 2020, respectively.

The model assumes that interest rate changes are instantaneous parallel shifts in the yield curve. Although some assets and liabilities may have similar maturities or periods to re-pricing, these may not react correspondingly to changes in market interest rates. Also, the interest rates on some types of assets and liabilities may fluctuate with changes in market interest rates, while interest rates on other types of assets may change with a lag.

The risk estimates provided assume a parallel shift of 100 basis points interest rate across all yield curves. This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The period end balances are not necessarily representative of the average debt outstanding during the period.

This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

(Note: The impact is indicated on the profit/(loss) before tax basis).

( c) Equity Price risk

Equity Price Risk is related to the change in market reference price of the investments in equity securities.

The fair value of some of the Company''s investments measured at fair value through other comprehensive income exposes the Company to equity price risks. These investments are subject to changes in the market price of securities. The fair value of Company''s investment in quoted equity securities as of March 31, 2021 and 2020 was ''446.22 crores and ''140.96 crores, respectively. A 10% change in equity price as of March 31, 2021 and 2020 would result in a pre- tax impact of ''44.62 crores and ''14.10 crores, respectively.

(Note: The impact is indicated on equity before consequential tax impact, if any).

(ii) Credit risk

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.

Financial instruments that are subject to concentrations of credit risk, principally consist of investments classified as fair value through profit and loss, trade receivables, loans and advances and derivative financial instruments. The Company strives to promptly identify and reduce concerns about collection due to a deterioration in the financial conditions and others of its main counterparties by regularly monitoring their situation based on their financial condition. None of the financial instruments of the Company result in material concentrations of credit risks.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was ''12,119.25 crores and ''9,966.54 crores as at March 31, 2021 and 2020, respectively, being the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables, finance receivables, margin money and other financial assets excluding equity investments.

Financial assets that are neither past due nor impaired

None of the Company''s cash equivalents, including short term deposits with banks, are past due or impaired. Regarding trade receivables and other receivables, and other loans or receivables that are neither impaired nor past due, there were no indications as at March 31, 2021, and March 31, 2020, that defaults in payment obligations will occur.

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Trade receivables overdue more than six months include ''538.91 crores as at March 31, 2021 (''471.35 crores as at March 31, 2020) outstanding from Government organizations in India, which are considered recoverable.

Trade receivables consist of a large number of various types of customers, spread across geographical areas. Ongoing credit evaluation is performed on the financial condition of these trade receivables and where appropriate allowance for losses are provided. Further the Company, groups the trade receivables depending on type of customers and accordingly credit risk is determined.

(iii) Liquidity risk

Liquidity risk refers to the risk that the Company will encounter difficulty to meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.

The Company has obtained fund and non-fund based working capital lines from various banks. Further, the Company has access to funds from debt markets through commercial paper programs, non-convertible debentures, senior notes and other debt instruments. The Company invests its surplus funds in bank fixed deposit and liquid and liquid plus schemes of mutual funds, which carry no/low mark to market risks. The Company has also invested 15% of the amount of non-convertible debentures (taken/issued by the Company) falling due for repayment in the next 12 months in bank deposits, to meet the regulatory norms of liquidity requirements.

The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.

(iv) Derivative financial instruments and risk management

The Company has entered into a variety of foreign currency, interest rates and commodity forward contracts and options to manage its exposure to fluctuations in foreign exchange rates, interest rates and commodity price risk. The counterparty is generally a bank. These financial exposures are managed in accordance with the Company''s risk management policies and procedures.

The Company also enters into interest rate swaps and cross currency interest rate swap agreements, mainly to manage exposure on its fixed rate or variable rate debt. The Company uses interest rate derivatives or currency swaps to hedge exposure to exchange rate fluctuations on principal and interest payments for borrowings denominated in foreign currencies.

Specific transactional risks include risks like liquidity and pricing risks, interest rate and exchange rate fluctuation risks, volatility risks, counterparty risks, settlement risks and gearing risks.

Fair value of derivative financial instruments are determined using valuation techniques based on information derived from observable market data.

43. SEGMENT REPORTING

The Company primarily operates in the automotive segment. The automotive segment includes all activities relating to development, design, manufacture, assembly and sale of vehicles, as well as sale of related parts and accessories. The Company''s products mainly include commercial vehicles and passenger vehicles.

44. RELATED-PARTY TRANSACTIONS

The Company''s related parties principally includes subsidiaries, joint operations, associates and their subsidiaries, Tata Sons Pvt Limited, subsidiaries and joint ventures of Tata Sons Pvt Limited. The Company routinely enters into transactions with these related parties in the ordinary course of business.

All transactions with related parties are conducted at arm''s length price under normal terms of business and all amounts outstanding are unsecured and will be settled in cash

The compensation of CEO and Managing Director is ''20.58 crores and ''16.48 crores for the year ended March 31, 2021 and 2020, respectively. This compensation for year ended March 31, 2021, includes ''2.83 crores of performance bonus and long term incentive for the year ended March 31, 2020, approved in the year ended March 31, 2021. The amount for year ended March 31, 2021 excludes Performance and Long Term Incentives, which will be accrued post approval by the Board of Directors. The Company has reappointed CEO and Managing Director from February 15, 2021 till June 30, 2021, which is subject to the approval of the Central Government and the Shareholders. Remuneration for the period February 15, 2021 to March 31, 2021 of ''1.89 crores (''11.82 crores for the year ended March 31, 2020) included above is subject to the approval.

* For the year ended March 31, 2020, the Compensation of COO and Executive Director includes ''2.41 crores for Gratuity, leave encashment and Ex-gratia paid on superannuation.

Refer note 47 for information on transactions with post employment benefit plans.

The Company''s policy is driven by considerations of maximising returns while ensuring credit quality of the debt instruments. The asset allocation for plan assets is determined based on investment criteria prescribed under the Indian Income Tax Act, 1961, and is also subject to other exposure limitations. The Company evaluates the risks, transaction costs and liquidity for potential investments. To measure plan asset performance, the Company compares actual returns for each asset category with published bench marks.

The weighted average duration of the defined benefit obligation as at March 31, 2021 is 13.1 years ( March 31, 2020 : 14.0 years).

The Company expects to contribute ''87.73 crores to the funded pension plans during the year ended March 31, 2022.

i ne company expects to contriDute ''82./3 crores to tne aerinea Denerit proviaent runa ptan in Fiscal 2022.

(ii) The Company''s contribution to defined contribution plan aggregated to ''78.79 crores and ''77.89 crores for the years ended March 31, 2021

and 2020, respectively.

ii) The Board of Directors has, at its meeting held on July 31, 2020, approved (subject to the requisite regulatory and other approvals) a Scheme of Arrangement between Tata Motors Limited and TML Business Analytics Services Limited (Transferee Company) for:

a) Transfer of the PV Undertaking of the Company as a going concern, on a slump sale basis as defined under Section 2(42C) of the Income-tax Act, 1961, to the Transferee Company for a lump sum consideration of ''9,417.00 crores through issuance of equity shares; and

b) Reduction of its share capital without extinguishing or reducing its liability on any of its shares by writing down a portion of its securities premium account to the extent of ''11,173.59 crores, with a corresponding adjustment to the accumulated losses of the Company.

The Scheme of Arrangement has been filed with National Company Law Tribunal for approval.

iii) The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/accounting standards for material foreseeable losses on such long term contracts (including derivative contracts) has been made in books of account.

(iv) The Company''s certain assets related to defence business are classified as "Held for Sale” as they meet the criteria laid out under Ind AS 105. The transaction has been completed in April 2021.

(v) During the year ended March 31, 2021, the Company has transferred its Global Delivery Centre / Process Shared Service business (''GDC Business'') unit to subsidiary company TML Business Services Limited (TMLBSL) on a slump sale basis for a lump sum consideration of ''10.30 crores. The difference between the consideration paid and net assets of GDC business of ''9.22 crores, has been credited to Capital reserve (on merger/sale of business).

(vi) During the year ended March 31, 2021, the Company and Marcopolo S.A. have entered into a share purchase agreement where the Company will purchase the balance 49% shareholding in Tata Marcopolo Motors Ltd (TMML) for a cash consideration of ''99.96 crores, subject to certain closing conditions to be complied by both Parties. On completion of the transaction, TMML will become a wholly owned subsidiary of the Company.

(vii) The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry. The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.


Mar 31, 2019

Note:

(1) The investment in the Company''s subsidiary Tata Motors Insurance Broking and Advisory Services Ltd and associate Tata Hitachi Construction Machinery Company Private Ltd are classified as "Held for Sale" as they meet the criteria laid out under Ind AS 105.

(2) The Company has given a letter of comfort to HDFC bank amounting to Rs,1 crore against Working Capital Facility to Tata Motors Insurance Broking and Advisory Services Limited (TMIBASL). Also the Company has given an undertaking to HDFC bank that it will not dilute its stake below 51% in TMIBASL during the tenor of the loan.

(h) The entitlements to 494,352 Ordinary shares of Rs,2 each (as at March 31, 2018 : 494,352 Ordinary shares of Rs,2 each) and 233,739 ''A'' Ordinary shares of Rs,2 each (as at March 31, 2018: 233,739 ''A'' Ordinary shares of Rs,2 each) are subject matter of various suits filed in the courts / forums by third parties for which final order is awaited and hence kept in abeyance.

(i) Rights, preferences and restrictions attached to shares :

(i) Ordinary shares and ''A'' Ordinary shares both of Rs,2each :

- The Company has two classes of shares - the Ordinary shares and the ''A'' Ordinary shares both of Rs,2 each (together referred to as shares). In respect of every Ordinary share (whether fully or partly paid), voting rights shall be in the same proportion as the capital paid up on such Ordinary share bears to the total paid up Ordinary share capital of the Company. In case of every ''A'' Ordinary share, if any resolution is put to vote on a poll or by postal ballot at any general meeting of shareholders, the holder shall be entitled to one vote for every ten ''A'' Ordinary shares held as per the terms of its issue and if a resolution is put to vote on a show of hands, the holder of ''A'' Ordinary shares shall be entitled to the same number of votes as available to holders of Ordinary shares.

- The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. Further, the Board of Directors may also declare an interim dividend. The holders of ''A'' Ordinary shares shall be entitled to receive dividend for each financial year at five percentage point more than the aggregate rate of dividend declared on Ordinary shares for that financial year.

- In the event of liquidation, the shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholdings.

(ii) American Depository Shares (ADSs) and Global Depository Shares (GDSs) :

- Each ADS and GDS underlying the ADR and GDR respectively represents five Ordinary shares of Rs,2 each. A holder of ADS and GDS is not entitled to attend or vote at shareholders meetings. An ADS holder is entitled to issue voting instructions to the Depository with respect to the Ordinary shares represented by ADSs only in accordance with the provisions of the Company''s ADSs deposit agreement and Indian Law. The depository for the ADSs and GDSs shall exercise voting rights in respect of the deposited shares by issue of an appropriate proxy or power of attorney in terms of the respective deposit agreements.

- Shares issued upon conversion of ADSs and GDSs will rank pari passu with the existing Ordinary shares of Rs,2 each in all respects including entitlement of the dividend declared.

# held by Citibank, N.A. as depository for American Depository Receipts (ADRs) and Global Depository Receipts (GDRs)

(k) Information regarding issue of shares in the last five years

(a) The Company has not issued any shares without payment being received in cash.

(b) The Company has not issued any bonus shares.

( c) The Company has not undertaken any buy-back of shares.

(B) Notes to reserves

a) Capital redemption reserve

The Indian Companies Act, 2013 (the "Companies Act") requires that where a company purchases its own shares out of free reserves or securities premium account, a sum equal to the nominal value of the shares so purchased shall be transferred to a capital redemption reserve account and details of such transfer shall be disclosed in the balance sheet. The capital redemption reserve account may be applied by the company, in paying up unissued shares of the company to be issued to shareholders of the company as fully paid bonus shares. Tata Motors Limited established this reserve pursuant to the redemption of preference shares issued in earlier years.

b) Debenture redemption reserve

The Companies Act requires that where a company issues debentures, it shall create a debenture redemption reserve out of profits of the company available for payment of dividend. The company is required to maintain a Debenture Redemption Reserve of 25% of the value of debentures issued, either by a public issue or on a private placement basis. The amounts credited to the debenture redemption reserve may not be utilized by the company except to redeem debentures.

c) Securities premium

The amount received in excess of face value of the equity shares is recognized in Securities Premium.

d) Retained earnings

Retained earnings are the profits that the Company has earned till date.

e) Capital reserve

The capital reserve represents the excess of the identifiable assets and liabilities over the consideration paid.

f) Dividends

The final dividend is recommended by the Board of Directors and is recorded in the books of accounts upon its approval by the Shareholders. For the year ended March 31, 2019 and 2018 , considering the accumulated losses in the Tata Motors Limited Standalone, no dividend was permitted to be paid to the members, as per the Companies Act, 2013 and the rules framed there under. For the year ended March 31, 2019, considering the previous years'' losses in Tata Motors Limited (standalone), no dividend is permitted to be paid to members, as per the Companies Act, 2013 and the Rules framed there under.

g) Share-based payments reserve

Share-based payments reserve represents amount of fair value, as on the date of grant, of unvested options and vested options not exercised till date, that have been recognized as expense in the statement of profit and loss till date.

I. Information regarding long-term borrowings

(i) Nature of security (on loans including interest accrued thereon) :

(a) Rated, Listed, Secured, 9.95% Coupon, Non-Convertible Debentures amounting to Rs,200 crores included within Current maturities of Long-term borrowings in note 26 are secured by a pari passu charge by way of an English mortgage of the Company''s freehold land together with immovable properties, plant and machinery and other movable assets (excluding stock and book debts) situated at Sanand in the State of Gujarat.

(b) The term loan of Rs,587.08 crores (recorded in books at Rs,146.73 crores) is due for repayment from the quarter ending March 31, 2033 to quarter ending March 31, 2039, along with simple interest at the rate of 0.10% p.a. The loan is secured by a second and subservient charge (creation of charge is under process) over Company''s freehold land together with immovable properties, plant and machinery and other movable assets (excluding stock and book debts) situated at Sanand plant in the State of Gujarat.

The term loan of Rs,51.36 crores (recorded in books at Rs,16.33 crores) is due for repayment from the quarter ending June 30, 2030 to March 31, 2034, along with a simple interest of 0.01% p.a. The loan is secured by bank guarantee for the due performance of the conditions as per the terms of the agreement.

( c) Term loan from banks of Rs,587.58 crores included within Long-term borrowings and Rs,88.48 crores included within Current maturities of Long-term borrowings in note 26, bearing floating interest rate of 1 month LIBOR

1.63% and 1 year MCLR 0.10% are taken by joint operation Fiat India Automobiles Private Ltd which is due for repayment from June 2019 to May 2023. The loan is secured by first charge over fixed assets procured from its loan/jeep project.

During the year ended March 31, 2019, the Company prepaid USD 237.47 million (Rs,1,544.71 crores) of 4.625% Senior Notes at a premium of 2.5%, from fund raised through External Commercial Borrowings of USD 237.47 million.

(iv) The external commercial borrowings of USD 237.47 million (Rs,1,642.27 crores) bearing floating interest rate of 3months LIBOR 128bps is due for repayment in June 2025.

(v) The buyer''s line of credit from banks amounting to Rs,2,500 crores, bearing floating interest rate based on marginal cost of funds lending rate (MCLR) of respective bank is repayable within a maximum period of five years from the drawdown dates. All the repayments are due from year ending March 31, 2021 to March 31, 2024.

II. Information regarding short-term borrowings

(i) Loans, cash credits, overdrafts and buyers line of credit from banks bearing fixed interest rate from 8.00% to 8.65% are secured by hypothecation of existing current assets of the Company viz. stock of raw materials, stock in process, semi-finished goods, stores and spares not relating to plant and machinery (consumable stores and spares), bills receivable and book debts including receivable from hire purchase / leasing and all other moveable current assets except cash and bank balances, loans and advances of the Company both present and future.

(ii) Inter-corporate deposits from subsidiaries and associates are unsecured bearing interest rate at 7.50%

(iii) Commercial paper are unsecured short-term papers issued at discount bearing no coupon interest. The yield on commercial paper issued by the Company ranges from 7.21% to 8.28%

III. Collateral

Inventory, trade receivables, other financial assets, property, plant and equipment with a carrying amount of Rs,4,580.01 crores and Rs,4,415.30 crores are pledged as collateral/security against the borrowings as at March 31, 2019 and March 31, 2018, respectively.

Performance obligations in respect of amount received in respect of future maintenance service and extended warranty will be fulfilled over a period of 6 years from year ending March 31, 2020 till March 31, 2025.

Until the previous year, advances received from customers and deferred revenue were separately presented which currently as per Ind AS 115 are presented as contract liabilities

(b) Government incentives include Rs,245.93 crores as at March 31, 2019 (Rs,187.67 crores as at March 31, 2018) grants relating to property, plant and equipment related to duty saved on import of capital goods and spares under the Exports Promotion Capital Goods (EPCG) scheme. Under such scheme, the Company is committed to export prescribed times of the duty saved on import of capital goods over a specified period of time. In case such commitments are not met, the Company would be required to pay the duty saved along with interest to the regulatory authorities.

(2) Consequent to the introduction of Goods and Service Tax (GST) with effect from July 1, 2017, Central Excise, Value Added Tax (VAT), etc have been replaced by GST. In accordance with Ind AS 115/Ind AS 18 on Revenue and Schedule III of the Companies Act, 2013, GST, GST Compensation Cess, etc. are not included in sale of products for applicable periods. In view of the aforesaid restructuring of indirect taxes, sale of products for the year ended March 31, 2019 is not comparable with year ended March 31, 2018. Following additional information is being provided to facilitate such comparison:

(2) Consequent to clarifications published by the Institute of Chartered Accountants of India during the year ended March 31, 2019; various Government Grants (incentives) have been reported as "Other Income". Previously, these were reported as "Other Operating Revenue" in the Statement of Profit and Loss. The change is retrospectively applied by reclassifying the previous year to conform to current year''s presentation and is not considered material to the Company''s prior period financial statements.

Share based payments

The Company has allotted share based incentives to certain employees during the year ended March 31, 2019, under Tata Motors Limited Employee Stock Options Scheme 2018 approved by Nomination and Remuneration Committee (NRC). As per the scheme, the number of shares that will vest is conditional upon certain performance measures determined by NRC. The performance is measured over vesting period of the options granted which ranges from 3 to 5 years. The performance measures under this scheme include growth in sales, earnings and free cash flow. The options granted under this scheme is exercisable by employees till one year from date of its vesting. The Company has granted options at an exercise price of Rs,345/-. Option granted will vest equally each year starting from 3 years from date of grant up to 5 years from date of grant. Number of shares that will vest range from 0.5 to 1.5 per option granted depending on performance measures.

Note: The weighted average rate for capitalization of interest relating to general borrowings was approximately 7.87% and 7.43% for the years ended March 31, 2019 and 2018, respectively.

( c) Works operation and other expenses for the year March 31, 2019 includes Rs,22.21 crores (Rs,21.44 crores for the year March 31, 2018) spent by Tata Motors Ltd on standalone basis excluding interest in the joint operations, towards various schemes of Corporate Social Responsibility (CSR) as prescribed under Section 135 of the Companies Act, 2013. No amount has been spent on construction / acquisition of an asset of the Company. The prescribed CSR expenditure required to be spent in the year 2018-19 as per the Companies Act, 2013 is ''Nil, in view of average net profits of the Company being ''Nil (under section 198 of the Act) for last three financial years.

38. (a) Exceptional debit of Rs,180.66 crores and Rs,962.98 crores during the year ended March 31, 2019 and 2018, respectively are related to write off/provision for impairment of certain capital work-in-progress and intangibles under development.

The company reviewed product development programs and capital work-in-progress and consequently provided for impairment during the year ended March 31, 2018. During the year ended March 31, 2019, the Company has written off intangibles under development of Rs,550 crores, which were provided for during the year ended March 31, 2018. These projects are not viable for future due to changing market conditions and emission regulations.

(b) During the year ended March 31, 2019, the Company has sold investment in TAL Manufacturing Solutions Limited to Tata Advanced Systems Ltd (TASL).

( c) The Company has entered into an agreement for transfer of its Defense undertaking, which had a value of Rs,209.27 crores as at December 31, 2017 to Tata Advanced Systems Ltd (transferee company), for an upfront consideration of Rs,100 crores and a future consideration of 3% of the revenue generated from identified Specialized Defense Projects for up to 15 years from the financial year ended FY 2020 subject to a maximum of Rs,1,750 crores. The future consideration of 3% of revenue depends on future revenue to be generated from the said projects by the transferee company. On account of the same, the Company has recognized a provision of Rs,109.27 crores, which may get reversed in future once projects start getting executed from FY 2020 onwards. The assets related to defense undertaking are classified as "Held for Sale" as they meet the criteria laid out under Ind AS 105.

39. Commitments and contingencies

I n the ordinary course of business, the Company faces claims and assertions by various parties. The Company assesses such claims and assertions and monitors the legal environment on an ongoing basis, with the assistance of external legal counsel, wherever necessary. The Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosure in the financial statements but does not record a liability in its accounts unless the loss becomes probable.

The following is a description of claims and assertions where a potential loss is possible, but not probable. The Company believes that none of the contingencies described below would have a material adverse effect on the Company''s financial condition, results of operations or cash flows.

Litigation

The Company is involved in legal proceedings, both as plaintiff and as defendant. There are claims which the Company does not believe to be of material nature, other than those described below.

Income Tax

The Company has ongoing disputes with income tax authorities relating to tax treatment of certain items. These mainly include disallowed expenses, the tax treatment of certain expenses claimed by the Company as deductions and the computation of, or eligibility of, the Company''s use of certain tax incentives or allowances.

Most of these disputes and/or disallowances, being repetitive in nature, have been raised by the income tax authorities consistently in most of the years.

The Company has a right of appeal to the Commissioner of Income Tax (Appeals), or CIT (A), the Dispute Resolution Panel, or DRP, and to the Income Tax Appellate Tribunal, or ITAT, against adverse decisions by the assessing officer, DRP or CIT (A), as applicable. The income tax authorities have similar rights of appeal to the ITAT against adverse decisions by the CIT (A) or DRP. The Company has a further right of appeal to the Bombay High Court or the Hon''ble Supreme Court of India against adverse decisions by the appellate authorities for matters involving substantial question of law. The income tax authorities have similar rights of appeal.

As at March 31, 2019, there are matters and/or disputes pending in appeal amounting to Rs,58.77 crores (Rs,60.89 crores as at March 31, 2018).

Customs, Excise Duty and Service Tax

As at March 31, 2019, there are pending litigation for various matters relating to customs, excise duty and service taxes involving demands, including interest and penalties, of Rs,907.78 crores (Rs,1,491.36 crores as at March 31, 2018). These demands challenged the basis of valuation of the Company''s products and denied the Company''s claims of Central Value Added Tax, or CENVAT credit on inputs. The details of the demands for more than Rs,20 crores are as follows:

The Excise Authorities have raised a demand for Rs,90.72 crores as at March 31, 2019 (Rs,90.72 crores as at March 31, 2018), on account of alleged undervaluation''s of ex-factory discounts given by Company on passenger vehicles through invoices. The matter is being contested by the Company before the Bombay High Court.

As at March 31, 2019, the Excise Authorities have raised a demand and penalty of Rs,243.24 crores (Rs,239.95 crores as at March 31, 2018), due to the classification of certain chassis (as dumpers instead of goods transport vehicles) which were sent to automotive body builders by the Company, which the Excise Authorities claim requires the payment of the National Calamity Contingent Duty, or NCCD. The Company has obtained a technical expert certificate on the classification. The appeal is pending before the Custom Excise & Service Tax Appellate Tribunal.

The Excise Authorities had denied the Company''s claim of a CENVAT credit of Rs,20.14 crores (Rs,36.03 crores as at March 31, 2018) claimed by the Company from Fiscal 1992 to Fiscal 2013, on technical grounds. The matter is being contested by the Company before the Appellate Authorities.

As at March 31, 2019, the Excise Authorities had levied penalties and interest amounting to Rs,90.32 crores (Rs,679.88 crores as at March 31, 2018) with respect to CENVAT credit claimed by the Company from March 2010 to June 2017, on inputs, stating that vehicles manufactured at Uttarakhand plant are "Exempted Products" and the Company may not claim a CENVAT credit on these vehicles. The Company has challenged this demand as NCCD and the automobile cess is assessed on those vehicles, which are "duties of excise". Therefore, the Company asserts that these vehicles are not "Exempted Products". The matter is being contested by the Company before the appellate authorities.

As at March 31, 2019, the Excise Authorities have raised a demand amounting to Rs,29.54 crores (Rs,29.54 crores as at March 31, 2018)on pre-delivery inspection charges and free after-sales service charges incurred by dealers on Company''s products on the alleged grounds that the pre-delivery inspection charges and free after-sales services are provided by the dealer on behalf of the Company and should be included in excisable value of the vehicle. The case is pending before Tribunal.

As at March 31, 2019, the Excise Authorities have confirmed demand & penalty totaling to Rs,90.88 crores (Rs,90.88 crores as at March 31, 2018) towards vehicles allegedly sold below cost of production with an intention to penetrate the market. The matter is being contested by the Company before the appellate authorities.

The Excise Authorities had denied the Company''s claim of a CENVAT credit of Rs,81.51 crores as at March 31, 2019 on various inputs services like authorized service station services, erection, commissioning and installation services, common services etc. claimed by the Company from financial year 2006 to 2017. The matters are being contested by the Company before the Appellate Authorities.

As at March 31, 2019, the Excise Authorities have confirmed the demand and penalty totaling to Rs,92.42 crores alleging undervaluation of products sold by the Company. The matter is being contested by the Company before appellate authorities.

As at March 31, 2019, demand and penalty totaling to Rs,23.50 crores has been confirmed for alleged non-payment of service tax on services like event management services, authorised service station services, heat treatment services etc. The matter is being contested by the Company before appellate authorities.

Sales Tax /VAT

The total sales tax demands (including interest and penalty), that are being contested by the Company amount to Rs,1,123.47 crores as at March 31, 2019 (Rs,949.54 crores as at March 31, 2018). The details of the demands for more than Rs,20 crores are as follows:

The Sales Tax Authorities have raised demand of Rs,260.15 crores as at March 31, 2019 (Rs,269.38 crores as at March 31, 2018) towards rejection of certain statutory forms for concessional lower/nil tax rate (Form F and Form C) on technical grounds such as late submission, single form issued against different months / quarters dispatches / sales, etc. and denial of exemption from tax in absence of proof of export for certain years. The Company has contended that the benefit cannot be denied on technicalities, which are being complied with. The matter is pending at various levels.

The Sales Tax authorities have denied input tax credit and levied interest and penalty thereon due to varied reasons aggregating to Rs,487.96 crores as at March 31, 2019 (Rs,435.96 crores as at March 31, 2018). The reasons for disallowing credit was mainly due to Taxes not paid by Vendors, incorrect method of calculation of set off as per the department, alleging suppression of sales as per the department etc. The matter is contested in appeal.

Sales tax demand aggregating Rs,80.02 crores as at March 31, 2019 (Rs,95.75 as at March 31, 2018) has been raised by Sales Tax Authorities for non submission of Maharashtra Trial Balance. The matter is contested in appeal.

The Sales Tax authorities have raised demand for Entry Tax liability at various states amounting to Rs,64.14 crores as at March 31, 2019 (Rs,23.92 as at March 31, 2018). The company is contesting this issue.

In case of one of the joint operation, the Sales Tax Authorities have held back the refund of VAT on debit notes raised for Take or Pay arrangements (TOP) totaling to Rs,51.60 crores pertaining to financial years 2009-10 to 2014-2015. The department is of the view that TOP is not part of sale and hence tax to be paid. The matter is contested in appeal.

Other Taxes and Dues

Other amounts for which the Company may contingently be liable aggregate to Rs,232.54 crores as at March 31, 2019 (Rs,205.19 crores as at March 31, 2018). Following are the cases involving more than Rs,20 crores:

The municipal authorities in certain states levy octroi duty (a local indirect tax) on goods brought inside the municipal limits at rates based on the classification of goods. Demands aggregating Rs,61.65 crores as at March 31, 2019 (Rs,61.65 crores as at March 31, 2018) had been raised demanding higher octroi duties on account of classification disputes relating to components purchased for the manufacture of vehicles and retrospective increase in octroi rates relating to past periods. The dispute relating to classification is presently pending before the Bombay High Court and the other dispute is pending before the Hon''ble Supreme Court of India

As at March 31, 2019, property tax amounting to Rs,63.81 crores (Rs,56.84 crores as at March 31, 2018) has been demanded by the local municipal authorities in respect of vacant land of the Company in the plant in Pimpri, Chinchwad and Chikhali. The Company has filed Special Leave Petition (SLP) before the Supreme Court against an unfavorable decision of the Bombay High Court. The Hon''ble Supreme Court of India has disposed of the SLP and remanded the matter back to the local municipal corporation for fresh adjudication.

As at March 31, 2019, Sales tax / VAT amounting to Rs,32.47 crores (Rs,30.54 crores as at March 31, 2018) has been demanded by local authorities on dealers in respect of spare parts used for carrying out warranty repairs. The dispute is pending before the Hon''ble Supreme Court of India.

As at March 31, 2019, possession tax amounting to Rs,36.25 crores have been demanded in respect of motor vehicles in the possession of the manufacturer and the authorization of trade certificate granted under the Central Motor Vehicle Rules, 1989. The matter is being contested before the Hon''ble Supreme Court of India.

Other claims

The Hon''ble Supreme Court of India ("SC") by their order dated February 28, 2019, set out the principles based on which allowances paid to the employees should be identified for inclusion in basic wages for the purposes of computation of Provident Fund contribution. Subsequently, a review petition against this decision has been filed and is pending before the SC for disposal. Further, there are interpretative challenges and considerable uncertainty, including estimating the amount retrospectively. Pending the outcome of the review petition and directions from the EPFO, the impact for past periods, if any, is not ascertainable reliably and consequently no financial effect has been provided for in the financial statements. The Company has made a provision on a prospective basis, from the date of the SC order.

The Company has, consequent to an Order of the Hon''ble Supreme Court of India in the case of R.C. Gupta and Ors. Vs Regional Provident Fund Commissioner, Employees ''''Provident Fund Organisation and Ors., evaluated the impact on its employee pension scheme and concluded that this is not applicable to the Company based on external lega opinion and hence it is not probable that there will be an outflow of resources.

Post the sale of investments of TAL Manufacturing Solutions Ltd. (TAL) to Tata Advanced Systems Ltd. (TASL), the Company has continued its performance guarantee amounting to Rs,691.49 crores (USD 100 million) in respect of TAL''s obligations to its customer to cover the event post the share sale, against a back-to-back indemnity by TASL to the Company. Steps are currently under way to transfer the said guarantee to TASL in due course.

Commitments

The Company has entered into various contracts with vendors and contractors for the acquisition of plant and machinery, equipment and various civil contracts of a capital nature amounting to Rs,1,929.86 crores at March 31, 2019 (Rs,2,096.64 crores as at March 31, 2018), which are yet to be executed.

The Company has entered into various contracts with vendors and contractors for the acquisition of intangible assets of a capital nature amounting to Rs,397.81 crores as at March 31, 2019, (Rs,466.01 crores as at March 31, 2018), which are yet to be executed.

*''A'' Ordinary Shareholders are entitled to receive dividend @ 5% points more than the aggregate rate of dividend determined by the Company on Ordinary Shares for the financial year.

#Since there is a loss for the year ended March 31, 2018, potential equity shares are not considered as dilutive and hence Diluted EPS is same as Basic EPS.

Note :

Employee Stock options are not considered to be dilutive based on the average market price of ordinary shares during the period.

41. Capital Management

The Company''s capital management is intended to create value for shareholders by facilitating the meeting of long-term and short-term goals of the Company.

The Company determines the amount of capital required on the basis of annual operating plans and long-term product and other strategic investment plans. The funding requirements are met through equity, non-convertible debentures, senior notes and other long-term/short-term borrowings. The Company''s policy is aimed at combination of short-term and long-term borrowings.

The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

Total borrowings includes all long and short-term borrowings as disclosed in notes 23, 24 and 26 (a) to the financial statements. Equity comprises all components excluding (profit)/loss on cash flow hedges.

The following table summarizes33 the capital of the Company:

42. Disclosures on financial instruments

This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments.

The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognized, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2 to be financial statements.

(a) Financial assets and liabilities

The following table presents the carrying amounts and fair value of each category of financial assets and liabilities as at March 31,2019.

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1 to Level 3, as described below.

Quoted prices in an active market (Level 1): This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of quoted equity shares, quoted corporate debt instruments and mutual fund investments.

Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities, measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e; as prices) or indirectly (i.e; derived from prices). This level of hierarchy include Company''s over-the-counter (OTC) derivative contracts.

Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

There has been no transfers between level 1, level 2 and level 3 for the year ended March 31, 2019 and 2018.

Costs of certain unquoted equity instruments has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range. These investments in equity instruments are not held for trading. Instead, they are held for medium or long term strategic purpose. Upon the application of Ind AS 109, the Company has chosen to designate these investments in equity instruments at FVTOCI as the directors believes this provides a more meaningful presentation for medium or long term strategic investments, than reflecting changes in fair value immediately in profit or loss.

Derivatives are fair valued using market observable rates and published prices together with forecast cash flow information where applicable.

The short-term financial assets and liabilities are stated at amortized cost which is approximately equal to their fair value.

The fair value of borrowings which have a quoted market price in an active market is based on its market price and for other borrowings the fair value is estimated by discounting expected future cash flows, using a discount rate equivalent to the risk-free rate of return, adjusted for the credit spread considered by the lenders for instruments of similar maturity.

Management uses its best judgment in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, substantially for all financial instruments, the fair value estimates presented above are not necessarily indicative of all the amounts that the Company could have realized or paid in sale transactions as of respective dates. As such, the fair value of the financial instruments subsequent to the respective reporting dates may be different from the amounts reported at each year end.

Offsetting

Certain financial assets and financial liabilities are subject to offsetting where there is currently a legally enforceable right to set off recognized amounts and the Company intends to either settle on a net basis, or to realize the asset and settle the liability, simultaneously.

Certain derivative financial assets and financial liabilities are subject to master netting arrangements, whereby in the case of insolvency, derivative financial assets and financial liabilities will be settled on a net basis.

The following table discloses the amounts that have been offset, in arriving at the balance sheet presentation and the amounts that are available for offset only under certain conditions as at March 31, 2019:

The following table discloses the amounts that have been offset in arriving at the balance sheet presentation and the amounts that are available for offset only under certain conditions as at March 31, 2018:

( c) Financial risk management

In the course of its business, the Company is exposed primarily to fluctuations in foreign currency exchange rates, interest rates, equity prices, liquidity and credit risk, which may adversely impact the fair value of its financial instruments.

The Company has a risk management policy which not only covers the foreign exchange risks but also other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the board of directors. The risk management framework aims to:

- Create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the Company''s business plan.

- Achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.

(i) Market risk

Market risk is the risk of any loss in future earnings, in realizable

fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

(i) (a) Foreign currency exchange rate risk:

The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency.

Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in U.S. dollar, Euro and Thai Baht against the respective functional currencies of the Company.

The Company, as per its risk management policy, uses foreign exchange and other derivative instruments primarily to hedge foreign exchange and interest rate exposure. Any weakening of the functional currency may impact the Company''s cost of exports and cost of borrowings and consequently may increase the cost of financing the Company''s capital expenditures.

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in accordance with its risk management policies.

The foreign exchange rate sensitivity is calculated for each currency by aggregation of the net foreign exchange rate exposure of a currency and a simultaneous parallel foreign exchange rates shift in the foreign exchange rates of each currency by 10%.

The exposure as indicated below is mitigated by some of the derivative contracts entered into by the Company as disclosed in (iv) derivative financial instruments and risk management below.

The following table sets forth information relating to foreign currency exposure (other than risk arising from derivatives disclosed at clause (iv) below) as of March 31, 2019:

10% appreciation/depreciation of the respective foreign currencies with respect to functional currency of the Company would result in decrease/increase in the Company''s net profit/(loss) before tax by approximately Rs,54.01 crores and Rs,682.31 crores for financial assets and financial liabilities respectively for the year ended March 31, 2019.

2 Others mainly include currencies such as the Russian ruble, Japanese yen, Swiss franc, Australian dollars, South African rand and Korean won.

10% appreciation/depreciation of the respective foreign currencies with respect to functional currency of the Company would result in decrease/increase in the Company''s net profit/(loss) before tax by approximately Rs,86.10 crores and Rs,689.03 crores for financial assets and financial liabilities, respectively for the year ended March 31, 2018.

(Note: The impact is indicated on the profit/(loss) before tax basis.)

(i) (b) Interest rate risk

Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any movement in the reference rates could have an impact on the Company''s cash flows as well as costs.

The Company is subject to variable interest rates on some of its interest bearing liabilities. The Company''s interest rate exposure is mainly related to debt obligations. The Company also uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund requirements for its day to day operations like short term loans.

As at March 31, 2019 and 2018, financial liability of Rs,5,176.20 crores and Rs,3,239.35 crores, respectively, was subject to variable interest rates. Increase/decrease of 100 basis points in interest rates at the balance sheet date would result in decrease/increase in profit/(loss) before tax of Rs,51.76 crores and Rs,32.39 crores for the year ended March 31, 2019 and 2018, respectively.

The model assumes that interest rate changes are instantaneous parallel shifts in the yield curve. Although some assets and liabilities may have similar maturities or periods to re-pricing, these may not react correspondingly to changes in market interest rates. Also, the interest rates on some types of assets and liabilities may fluctuate with changes in market interest rates, while interest rates on other types of assets may change with a lag.

The risk estimates provided assume a parallel shift of 100 basis points interest rate across all yield curves. This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The period end balances are not necessarily representative of the average debt outstanding during the period.

This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

(Note: The impact is indicated on the profit/(loss) before tax basis).

(i) ( c) Equity Price risk

Equity Price Risk is related to the change in market reference price of the investments in equity securities.

The fair value of some of the Company''s investments measured at fair value through other comprehensive income exposes the Company to equity price risks. These investments are subject to changes in the market price of securities. The fair value of Company''s investment in quoted equity securities as of March 31, 2019 and 2018 was Rs,271.07 crores and Rs,303.84 crores, respectively. A 10% change in equity price as of March 31, 2019 and 2018 would result in an impact of Rs,27.11 crores and Rs,30.38 crores, respectively.

(Note: The impact is indicated on equity before consequential tax impact, if any).

(ii) Credit risk

Credit risk is the risk of financial loss arising from counter-party failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.

Financial instruments that are subject to concentrations of credit risk, principally consist of investments classified as fair value through profit and loss, trade receivables, loans and advances and derivative financial instruments. None of the financial instruments of the Company result in material concentrations of credit risks.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was Rs,8,619.83 crores and Rs,7,819.91 crores as at March 31, 2019 and 2018, respectively, being the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables, finance receivables, margin money and other financial assets excluding equity investments.

Financial assets that are neither past due nor impaired

None of the Company''s cash equivalents, including time deposits with banks, are past due or impaired. Regarding trade receivables and other receivables, and other loans or receivables that are neither impaired nor past due, there were no indications as at March 31, 2019, that defaults in payment obligations will occur.

Credit quality of financial assets and impairment loss

The ageing of trade receivables as of balance sheet date is given below. The age analysis has been considered from the due date.

Trade receivables overdue more than six months include Rs,513.08 crores as at March 31, 2019 (Rs,462.22 crores as at March 31, 2018) outstanding from state government organisations in India, which are considered recoverable.

Trade receivables consist of a large number of various types of customers, spread across geographical areas. Ongoing credit evaluation is performed on the financial condition of these trade receivables and where appropriate allowance for losses are provided. Further the Company, groups the trade receivables depending on type of customers and accordingly credit risk is determined.

(iii) Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.

The Company has obtained fund and non-fund based working capital lines from various banks. Further, the Company has access to funds from debt markets through commercial paper programs, non-convertible debentures, senior notes and other debt instruments. The Company invests its surplus funds in bank fixed deposit and liquid and liquid plus schemes of mutual funds, which carry no/low mark to market risks. The Company has also invested 15% of the non-convertible debentures (taken/issued by the Company) falling due for repayment in the next 12 months in bank deposits, to meet the regulatory norms of liquidity requirements.

The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.

The table below provides details regarding the contractual maturities of financial liabilities, including estimated interest payments as at March 31, 2019:

(iv) Derivative financial instruments and risk management

The Company has entered into a variety of foreign currency, interest rates and commodity forward contracts and options to manage its exposure to fluctuations in foreign exchange rates, interest rates and commodity price risk. The counter-party is generally a bank. These financial exposures are managed in accordance with the Company''s risk management policies and procedures.

The Company also enters into interest rate swaps and interest rate currency swap agreements, mainly to manage exposure on its fixed rate or variable rate debt. The Company uses interest rate derivatives or currency swaps to hedge exposure to exchange rate fluctuations on principal and interest payments for borrowings denominated in foreign currencies.

Specific transactional risks include risks like liquidity and pricing risks, interest rate and exchange rate fluctuation risks, volatility risks, counter-party risks, settlement risks and gearing risks.

Fair value of derivative financial instruments are determined using valuation techniques based on information derived from observable market data.

The gain/loss due to fluctuation in foreign currency exchange rates on derivative contracts, recognized in the income statement was Rs,36.84 crores (gain) and Rs,6.31 crores (loss) for the years ended March 31, 2019 and 2018, respectively.

The gain/(loss) on commodity derivative contracts, recognized in the income statement was Rs,2.46 crores and Rs,6.07 crores for the years ended March 31, 2019 and 2018, respectively.

1. Segment reporting

The Company primarily operates in the automotive segment. The automotive segment includes all activities relating to development, design, manufacture, assembly and sale of vehicles, as well as sale of related parts and accessories. The Company''s products mainly include commercial vehicles and passenger vehicles.

A core initiative of the Company was the implementation of the Organization Effectiveness (OE) program, a strategic program designed to overhaul and transform the Company pursuant to the changes implemented as a result of the OE program, the Company has drawn separate strategies for commercial vehicles and passenger vehicles from Fiscal 2019

Consequent to these changes, from April 1, 2018, the automotive segment is bifurcated into the following:

(i) Commercial vehicles

(ii) Passenger vehicles

2. Related-party transactions

The Company''s related parties principally consist of subsidiaries, joint operations, associates and their subsidiaries, Tata Sons Private Limited, subsidiaries and joint ventures of Tata Sons Private Limited. The Company routinely enters into transactions with these related parties in the ordinary course of business. The Company enters into transactions for sale and purchase of products and services with its related parties.

The following table summarizes related-party transactions and balances for the year ended / as at March 31, 2019:

The Company''s policy is driven by considerations of maximizing returns while ensuring credit quality of the debt instruments. The asset allocation for plan assets is determined based on investment criteria prescribed under the Indian Income Tax Act, 1961, and is also subject to other exposure limitations. The Company evaluates the risks, transaction costs and liquidity for potential investments. To measure plan asset performance, the Company compares actual returns for each asset category with published bench marks.

The weighted average duration of the defined benefit obligation as at March 31, 2019 is 14.4 years ( March 31, 2018 : 14.5 years).

The Company expects to contribute Rs,87.58 crores to the funded pension plans during the year ended March 31, 2020.

The table below outlines the effect on the service cost, the interest cost and the defined benefit obligation in the event of a decrease/increase of 1% in the assumed rate of discount rate, salary escalation and health care cost:

The Company''s contribution to defined contribution plan aggregated to Rs,184.80 crores and Rs,182.20 crores for the years ended March 31, 2019 and 2018 respectively.

3. Additional information

The financial statements include the Company''s proportionate share of assets, liabilities, income and expenditure in its two Joint Operations, namely Tata Cummins Private Limited and Fiat India Automobile Private Limited. Below are supplementary details of Tata Motors Limited on standalone basis excluding interest in the aforesaid two Joint Operations:

iii) On March 29, 2019, TAL Manufacturing Solutions Limited (TAL) has transferred the Non-aerospace business to the Company including but not limited to the transfer of (i) all the employees (ii) all assets related to non-aerospace business and (iii) all past, present and future liabilities in respect of the non-aerospace business. The transaction is between entities within the Group (common control business combination). Hence, the financial statements in respect of prior periods should be restated as if the business combination had occurred from the beginning of the earliest period presented in the financial statements. However, as the amounts are not material, previous year financial statements are not restated.

(iv) The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/accounting standards for material foreseeable losses on such long term contracts (including derivative contracts) has been made in books of account.


Mar 31, 2018

Note:

(1) The investment in the Company''s subsidiaries Tata Technologies Ltd, TAL Manufacturing Solutions Ltd and Tata Motors Insurance Broking and Advisory Services Ltd and associate Tata Hitachi Construction Machinery Company Private Ltd are classified as "Held for Sale" as they meet the criteria laid out under Ind AS 105.

(2) The Company has given a letter of comfort to HDFC bank amounting to '' 1 crore against Working Capital Facility to Tata Motors Insurance Broking and Advisory Services Ltd (TMIBASL). Also the Company has given an undertaking to HDFC bank that it will not dilute its stake below 51% in TMIBASL during the tenor of the loan.

- less than RS, 50,000/-

(h) The entitlements to 494,352 Ordinary shares of RS, 2 each (as at March 31, 2017 : 494,618 Ordinary shares of RS, 2 each) and

233,739 RS,A'' Ordinary shares of RS, 2 each (as at March 31, 2017: 233,819 ''A'' Ordinary shares of RS, 2 each) are subject matter of

various suits filed in the courts / forums by third parties for which final order is awaited and hence kept in abeyance.

(i) Rights, preferences and restrictions attached to shares:

(i) Ordinary shares and ''A'' Ordinary shares both of '' 2 each :

- The Company has two classes of shares - the Ordinary shares and the ''A'' Ordinary shares both of '' 2 each (together referred to as shares). In respect of every Ordinary share (whether fully or partly paid), voting rights shall be in the same proportion as the capital paid up on such Ordinary share bears to the total paid up Ordinary share capital of the Company. In case of every ''A'' Ordinary share, if any resolution is put to vote on a poll or by postal ballot at any general meeting of shareholders, the holder shall be entitled to one vote for every ten ''A'' Ordinary shares held as per the terms of its issue and if a resolution is put to vote on a show of hands, the holder of ''A'' Ordinary shares shall be entitled to the same number of votes as available to holders of Ordinary shares.

- The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. Further, the Board of Directors may also declare an interim dividend. The holders of ''A'' Ordinary shares shall be entitled to receive dividend for each financial year at five percentage point more than the aggregate rate of dividend declared on Ordinary shares for that financial year.

- In the event of liquidation, the shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholdings.

(ii) American Depository Shares (ADSs) and Global Depository Shares (GDSs) :

- Each ADS and GDS underlying the ADR and GDR respectively represents five Ordinary shares of '' 2 each. A holder of ADS and GDS is not entitled to attend or vote at shareholders meetings. An ADS holder is entitled to issue voting instructions to the Depository with respect to the Ordinary shares represented by ADSs only in accordance with the provisions of the Company''s ADSs deposit agreement and Indian Law. The depository for the ADSs and GDSs shall exercise voting rights in respect of the deposited shares by issue of an appropriate proxy or power of attorney in terms of the respective deposit agreements.

- Shares issued upon conversion of ADSs and GDSs will rank pari passu with the existing Ordinary shares of '' 2 each in all respects including entitlement of the dividend declared.

(B) Notes to reserves

a) Capital redemption reserve

The indian Companies Act, 2013 (the "Companies Act") requires that where a company purchases its own shares out of free reserves or securities premium account, a sum equal to the nominal value of the shares so purchased shall be transferred to a capital redemption reserve account and details of such transfer shall be disclosed in the balance sheet. The capital redemption reserve account may be applied by the company, in paying up unissued shares of the company to be issued to shareholders of the company as fully paid bonus shares. Tata Motors Limited established this reserve pursuant to the redemption of preference shares issued in earlier years.

b) Debenture redemption reserve

The Companies Act requires that where a company issues debentures, it shall create a debenture redemption reserve out of profits of the company available for payment of dividend. The company is required to maintain a Debenture Redemption Reserve of 25% of the value of debentures issued, either by a public issue or on a private placement basis. The amounts credited to the debenture redemption reserve may not be utilized by the company except to redeem debentures.

c) Securities premium

The amount received in excess of face value of the equity shares is recognized in Securities Premium Account.

d) Retained earnings

Retained earnings are the profits that the Company has earned till date.

e) Dividends

For the year ended March 31, 2018 and 2017, considering the losses in the Tata Motors Limited (Standalone), no dividend is permitted to be paid to the Members, as per the Companies Act, 2013 and the Rules framed there under.

I. Information regarding long-term borrowings

(i) Nature of security (on loans including interest accrued thereon) :

(a) Rated, Listed, Secured, 9.95% Coupon, Non-Convertible Debentures amounting to RS, 200 crores included within Long-term borrowings in note 23 and 10.25% Coupon, Non-Convertible Debentures amounting to RS, 500 crores included within Current maturities of Long-term borrowings in note 26 are secured by a pari passu charge by way of an English mortgage of the Company''s freehold land together with immovable properties, plant and machinery and other movable assets (excluding stock and book debts) situated at Sanand in the State of Gujarat.

(b) The term loan of RS, 584.82 crores (recorded in books at RS, 133.39 crores) is due for repayment from the quarter ending March 31, 2033 to quarter ending March 31, 2038, along with simple interest at the rate of 0.10% p.a. The loan is secured by a second and subservient charge (creation of charge is under process) over Company''s freehold land together with immovable properties, plant and machinery and other movable assets (excluding stock and book debts) situated at Sanand plant in the State of Gujarat.

The term loan of RS, 35.92 crores (recorded in books at RS, 11.36 crores) is due for repayment from the quarter ending June 30, 2030 to March 31, 2033, along with a simple interest of 0.01% p.a. The loan is secured by bank guarantee for the due performance of the conditions as per the terms of the agreement.

( c) Term loan of RS, 635.45 is taken by joint operation Fiat india Automobiles Private Ltd which is due for repayment from December 2017 to May 2023. The loan is secured by first charge over fixed assets procured from its loan/jeep project.

(iv) The Buyer''s line of credit from banks amounting to RS, 1,500 crores is repayable within a maximum period of four years from the drawdown dates. All the repayments are due from quarter ending September 30, 2018 to March 31, 2021. The Buyer''s line of credit of RS, 500 crores classified under other financial liabilities-current being maturity before March 31, 2019.

II. Information regarding short-term borrowings

Loans, cash credits, overdrafts and buyers line of credit from banks are secured by hypothecation of existing current assets of the Company viz. stock of raw materials, stock in process, semi-finished goods, stores and spares not relating to plant and machinery (consumable stores and spares), bills receivable and book debts including receivable from hire purchase / leasing and all other moveable current assets except cash and bank balances, loans and advances of the Company both present and future.

III. Collateral

Inventory, trade receivables, other financial assets, property, plant and equipment with a carrying amount of RS, 4,415.30 crores and RS, 4,460.45 crores are pledged as collateral/security against the borrowings as at March 31, 2018 and 2017, respectively.

Note:

Deferred revenue includes RS, 187.67 crores as at March 31, 2018 ( RS, 227.92 crores as at March 31, 2017) grants relating to property, plant and equipment related to duty saved on import of capital goods and spares under the Export Promotion Capital Goods (EPCG) scheme. Under such scheme, the Company is committed to export prescribed times of the duty saved on import of capital goods over a specified period of time. in case such commitments are not met, the Company would be required to pay the duty saved along with interest to the regulatory authorities.

(2) Consequent to the introduction of Goods and Service Tax (GST) with effect from July 1, 2017, Central Excise, Value Added Tax (VAT), etc have been replaced by GST. In accordance with Ind AS 18 on Revenue and Schedule III of the Companies Act, 2013, GST, GST Compensation Cess, etc. are not included in Revenue from Operations for applicable periods. In view of the aforesaid restructuring of indirect taxes, Sale of products for the year ended March 31, 2018 is not comparable with year ended March 31, 2017. Following additional information is being provided to facilitate such comparison:

1. a) Exceptional debit of RS, 962.98 crores is related to provision for impairment of certain capital work-in-progress and intangibles

under development. The company reviewed product development programs and capital work-in-progrees and consequently provided for impairment during the year ended March 31, 2018.

b) Exceptional debit of RS, 147.93 crores for the year ended March 31, 2017, relates to provision for inventory of BS iii vehicles as at March 31, 2017. This does not include higher level of customer discounts and variable marketing expenses in March 2017, to support higher level of retail sales, which have been netted off against ''Revenue from operations.

2. Commitments and contingencies

in the ordinary course of business, the Company faces claims and assertions by various parties. The Company assesses such claims and assertions and monitors the legal environment on an ongoing basis, with the assistance of external legal counsel, wherever necessary. The Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosure in the financial statements but does not record a liability in its accounts unless the loss becomes probable.

The following is a description of claims and assertions where a potential loss is possible, but not probable. The Company believes that none of the contingencies described below would have a material adverse effect on the Company''s financial condition, results of operations or cash flows.

Litigation

The Company is involved in legal proceedings, both as plaintiff and as defendant. There are claims which the Company does not believe to be of material nature, other than those described below.

Income Tax

The Company has ongoing disputes with income tax authorities relating to tax treatment of certain items. These mainly include disallowed expenses, the tax treatment of certain expenses claimed by the Company as deductions and the computation of, or eligibility of, the Company''s use of certain tax incentives or allowances.

Most of these disputes and/or disallowances, being repetitive in nature, have been raised by the income tax authorities consistently in most of the years.

The Company has a right of appeal to the Commissioner of income Tax (Appeals), or CiT (A), the Dispute Resolution Panel, or DRP, and to the income Tax Appellate Tribunal, or iTAT, against adverse decisions by the assessing officer, DRP or CiT (A), as applicable. The income tax authorities have similar rights of appeal to the iTAT against adverse decisions by the CiT (A) or DRP. The Company has a further right of appeal to the Bombay High Court or the Supreme Court against adverse decisions by the appellate authorities for matters involving substantial question of law. The income tax authorities have similar rights of appeal.

As at March 31, 2018, there are matters and/or disputes pending in appeal amounting to RS, 60.89 crores (RS, 148.60 crores as at March 31, 2017).

Customs, Excise Duty and Service Tax

As at March 31, 2018, there are pending litigation for various matters relating to customs, excise duty and service taxes involving demands, including interest and penalties, of RS, 1,491.36 crores (RS, 1,425.12 crores as at March 31, 2017). These demands challenged the basis of valuation of the Company''s products and denied the Company''s claims of Central Value Added Tax, or CENVAT credit on inputs. The details of the demands for more than RS, 20 crores are as follows:

The Excise Authorities have raised a demand for RS, 90.72 crores as at March 31, 2018 (RS, 90.72 crores as at March 31, 2017), on account of alleged undervaluation''s of ex-factory discounts given by Company on passenger vehicles through invoices. The matter is being contested by the Company before the Bombay High Court.

As at March 31, 2018, the Excise Authorities have raised a demand and penalty of '' 239.95 crores, ('' 218.23 crores as at March 31, 2017), due to the classification of certain chassis (as dumpers instead of goods transport vehicles) which were sent to automotive body builders by the Company, which the Excise Authorities claim requires the payment of the National Calamity Contingent Duty, or

NCCD. The Company has obtained a technical expert certificate on the classification. The appeal is pending before the Custom Excise & Service Tax Appellate Tribunal.

The Excise Authorities had denied the Company''s claim of a CENVAT credit of RS, 36.03 crores as at March 31, 2018 (RS, 24.96 crores as at March 31, 2017) claimed by the Company from financial year 1992 to 2013, on technical grounds. The matter is being contested by the Company before the appellate authorities.

As at March 31, 2018, the Excise Authorities had levied penalties and interest amounting to RS, 679.88 crores (RS, 679.88 crores as at March 31, 2017) with respect to CENVAT credit claimed by the Company from March 2010 to November 2012, on inputs, stating that vehicles manufactured at Uttarakhand plant are "Exempted Products" and the Company may not claim a CENVAT credit on these vehicles. The Company has challenged this demand as NCCD and the automobile cess is assessed on those vehicles, which are "duties of excise". Therefore, the Company asserts that these vehicles are not "Exempted Products". The matter is being contested by the Company before the appellate authorities.

As at March 31, 2018, the Excise Authorities have raised a demand amounting to RS, 29.54 crores (RS, 29.54 crores as at March 31, 2017) on pre-delivery inspection charges and free after-sales service charges incurred by dealers on Company''s products on the alleged grounds that the pre-delivery inspection charges and free after-sales services are provided by the dealer on behalf of the Company and should be included in excisable value of the vehicle. The case is pending before Tribunal.

As at March 31, 2018, the Exicse Authorities have confirmed demand & penalty totalling to RS, 90.88 crores (RS, Nil as at March 31, 2017) towards vehicles allegedly sold below cost of production with an intention to penetrate the market. The matter is being contested by the Company before appellate authorities.

As at March 31, 2018, the Exicse Authorities have filed Appeal before appellate authority against the Order of adjudicating authority allowing Cenvat credit of service tax of RS, 36.15 crores (RS, 36.15 crores as at March 31, 2017) availed on consulting engineers services.

Sales Tax

The total sales tax demands (including interest and penalty), that are being contested by the Company amount to RS, 949.54 crores as at March 31, 2018 (RS, 965.80 crores as at March 31, 2017). The details of the demands for more than RS, 20 crores are as follows:

The Sales Tax Authorities have raised demand of RS, 269.38 crores as at March 31, 2018 (RS, 208.59 crores as at March 31, 2017) towards rejection of certain statutory forms for concessional lower/nil tax rate (Form F and Form C) on technical grounds such as late submission, single form issued against different months / quarters dispatches / sales, etc. and denial of exemption from tax in absence of proof of export for certain years. The Company has contended that the benefit cannot be denied on technicalities, which are being complied with. The matter is pending at various levels.

The Sales Tax Authorities have denied input tax credit and levied interest and penalty thereon due to varied reasons aggregating to '' 435.96 crores as at March 31, 2018 (RS, 305.46 crores as at March 31, 2017). The reasons for disallowing credit was mainly due to Taxes not paid by Vendors, incorrect method of calculation of set off as per the department, alleging suppression of sales as per the department etc. The matter is contested in appeal.

Sales tax demand aggregating RS, 95.75 crores as at March 31, 2018 (RS, Nil as at March 31, 2017) has been raised by Sales Tax Authorities for non submission of Maharashtra Trial Balance. This is relating to VAT assessment for the financial year 2010 to 2013. The matter is contested in appeal.

The Sales Tax Authorities have raised demand for Entry Tax liability at various states amounting to RS, 23.92 crores as at March 31, 2018 (RS, Nil as at March 31, 2017) . The company is contesting this issue.

Other Taxes and Dues

Other amounts for which the Company may contingently be liable aggregate to RS, 205.19 crores as at March 31, 2018 (RS, 221.14 crores as at March 31, 2017). Following are the cases involving more than RS, 20 crores:

The municipal authorities in certain states levy octroi duty (a local indirect tax) on goods brought inside the municipal limits at rates based on the classification of goods. Demands aggregating RS, 61.65 crores as at March 31, 2018 (RS, 61.65 crores as at March 31, 2017) had been raised demanding higher octroi duties on account of classification disputes relating to components purchased for the manufacture of vehicles and retrospective increase in octroi rates relating to past periods. The dispute relating to classification is presently pending before the Bombay High Court and the other dispute is pending before the Supreme Court.

As at March 31, 2018, property tax amounting to RS, 56.84 crores (RS, 53.70 crores as at March 31, 2017) has been demanded by the local municipal authorities in respect of vacant land of the Company in the plants in Pimpri, Chinchwad and Chikhali. The Company has filed Special Leave Petition (SLP) before the Supreme Court against an unfavorable decision of the Bombay High Court. The Supreme Court has disposed of the SLP and remanded the matter back to the local municipal corporation for fresh adjudication.

As at March 31, 2018, Sales tax / VAT amounting to RS, 30.54 crores (RS, 29.95 crores as at March 31, 2017) has been demanded by local authorities on dealers in respect of spare parts used for carrying out warranty repairs. The dispute is pending before the Supreme Court.

Commitments

The Company has entered into various contracts with vendors and contractors for the acquisition of plant and machinery, equipment and various civil contracts of a capital nature amounting to RS, 2,096.64 crores at March 31, 2018 (RS, 1,606.45 crores as at March 31, 2017), which are yet to be executed.

The Company has entered into various contracts with vendors and contractors for the acquisition of intangible assets of a capital nature amounting to RS, 466.01 crores as at March 31, 2018, (RS, 420.06 crores as at March 31, 2017), which are yet to be executed.

* ''A'' Ordinary Shareholders are entitled to receive dividend @ 5% points more than the aggregate rate of dividend determined by the Company on Ordinary Shares for the financial year.

# Since there is a loss for year ended March 31, 2018 and 2017 potential equity shares are not considered as dilutive and hence Diluted EPS is same as Basic EPS.

3. Capital Management

The Company''s capital management is intended to create value for shareholders by facilitating the meeting of long-term and short-term goals of the Company.

The Company determines the amount of capital required on the basis of annual operating plans and long-term product and other strategic investment plans. The funding requirements are met through equity, non-convertible debentures, senior notes and other long-term/short-term borrowings. The Company''s policy is aimed at combination of short-term and long-term borrowings.

The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

Total borrowings includes all long and short-term borrowings as disclosed in notes 23, 24 and 26 (a) to the financial statements. Equity comprises all components excluding (profit)/loss on cash flow hedges.

The following table summarizes the capital of the Company:

in rrnroc^

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1 to Level 3, as described below.

Quoted prices in an active market (Level 1): This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of quoted equity shares, quoted corporate debt instruments and mutual fund investments.

Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities, measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e; as prices) or indirectly (i.e; derived from prices). This level of hierarchy include Company''s over-the-counter (OTC) derivative contracts.

Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

There has been no transfers between level 1, level 2 and level 3 for the year ended March 31, 2018 and 2017.

Costs of certain unquoted equity instruments has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range. These investments in equity instruments are not held for trading. Instead, they are held for medium or long term strategic purpose. Upon the application of Ind AS 109, the Company has chosen to designate these investments in equity instruments at FVTOCI as the directors believes this provides a more meaningful presentation for medium or long term strategic investments, than reflecting changes in fair value immediately in profit or loss.

Derivatives are fair valued using market observable rates and published prices together with forecast cash flow information where applicable.

The short-term financial assets and liabilities are stated at amortized cost which is approximately equal to their fair value.

The fair value of borrowings which have a quoted market price in an active market is based on its market price and for other borrowings the fair value is estimated by discounting expected future cash flows, using a discount rate equivalent to the risk-free rate of return, adjusted for the credit spread considered by the lenders for instruments of similar maturity.

Management uses its best judgment in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, substantially for all financial instruments, the fair value estimates presented above are not necessarily indicative of all the amounts that the Company could have realized or paid in sale transactions as of respective dates. As such, the fair value of the financial instruments subsequent to the respective reporting dates may be different from the amounts reported at each year end.

(c) Financial risk management

in the course of its business, the Company is exposed primarily to fluctuations in foreign currency exchange rates, interest rates, equity prices, liquidity and credit risk, which may adversely impact the fair value of its financial instruments.

The Company has a risk management policy which not only covers the foreign exchange risks but also other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the board of directors. The risk management framework aims to:

- Create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the Company''s business plan.

- Achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.

(i) Market risk

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

(i) (a) Foreign currency exchange rate risk:

The fluctuation in foreign currency exchange rates may have potential impact on the income statement and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency.

Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in U.S. dollar, Euro and Thai Baht against the respective functional currencies of the Company.

The Company, as per its risk management policy, uses foreign exchange and other derivative instruments primarily to hedge foreign exchange and interest rate exposure. Any weakening of the functional currency may impact the Company''s cost of exports and cost of borrowings and consequently may increase the cost of financing the Company''s capital expenditures.

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. it hedges a part of these risks by using derivative financial instruments in accordance with its risk management policies.

The foreign exchange rate sensitivity is calculated for each currency by aggregation of the net foreign exchange rate exposure of a currency and a simultaneous parallel foreign exchange rates shift in the foreign exchange rates of each currency by 10%.

The exposure as indicated below is mitigated by some of the derivative contracts entered into by the Company as disclosed in (iv) derivative financial instruments and risk management below.

The following table sets forth information relating to foreign currency exposure (other than risk arising from derivatives disclosed at clause (iv) below) as of March 31, 2018:

1 Others mainly include currencies such as the Russian ruble, Japanese yen, Swiss franc, Australian dollars, South African rand, Thai baht and Korean won.

10% appreciation/depreciation of the respective foreign currencies with respect to functional currency of the Company would result in decrease/increase in the Company''s net profit/(loss) before tax by approximately RS, 86.10 crores and RS, 689.03 crores for financial assets and financial liabilities respectively for the year ended March 31,

2018.

2 Others mainly include currencies such as the Russian rouble, Japanese yen, Swiss franc, Australian dollars, South African rand, Thai baht and Korean won.

10% appreciation/depreciation of the respective foreign currencies with respect to functional currency of the Company would result in decrease/increase in the Company''s net profit/(loss) before tax by approximately RS, 55.23 crores and RS, 653.42 crores for financial assets and financial liabilities, respectively for the year ended March 31, 2017.

(Note: The impact is indicated on the profit/(loss) before tax basis.)

(i) (b) Interest rate risk

Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any movement in the reference rates could have an impact on the Company''s cash flows as well as costs.

The Company is subject to variable interest rates on some of its interest bearing liabilities. The Company''s interest rate exposure is mainly related to debt obligations. The Company also uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund requirements for its day to day operations like short term loans.

As at March 31, 2018 and 2017, financial liability of RS, 3,239.35 crores and RS, 3,418.97 crores, respectively, was subject to variable interest rates. Increase/decrease of 100 basis points in interest rates at the balance sheet date would result in decrease/increase in profit/(loss) before tax of RS,32.39 crores and RS, 34.19 crores for the year ended March 31, 2018 and 2017, respectively.

The model assumes that interest rate changes are instantaneous parallel shifts in the yield curve. Although some assets and liabilities may have similar maturities or periods to re-pricing, these may not react correspondingly to changes in market interest rates. Also, the interest rates on some types of assets and liabilities may fluctuate with changes in market interest rates, while interest rates on other types of assets may change with a lag.

The risk estimates provided assume a parallel shift of 100 basis points interest rate across all yield curves. This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The period end balances are not necessarily representative of the average debt outstanding during the period.

This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

(Note: The impact is indicated on the profit/(loss) before tax basis).

(i) ( c) Equity Price risk

Equity Price Risk is related to the change in market reference price of the investments in equity securities.

The fair value of some of the Company''s investments measured at fair value through other comprehensive income exposes the Company to equity price risks. These investments are subject to changes in the market price of securities. The fair value of Company''s investment in quoted equity securities as of March 31, 2018 and 2017 was RS, 303.84 crores and RS, 218.18 crores, respectively. A 10% change in equity price as of March 31, 2018 and 2017 would result in an impact of RS,30.38 crores and RS, 21.82 crores, respectively.

(Note: The impact is indicated on equity before consequential tax impact, if any).

(ii) Credit risk

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.

Financial instruments that are subject to concentrations of credit risk, principally consist of investments classified as fair value through profit and loss, trade receivables, loans and advances and derivative financial instruments. None of the financial instruments of the Company result in material concentrations of credit risks.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was RS, 7,819.91 crores and RS, 6,069.96 crores as at March 31, 2018 and 2017, respectively, being the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables, finance receivables, margin money and other financial assets excluding equity investments.

Financial assets that are neither past due nor impaired

None of the Company''s cash equivalents, including time deposits with banks, are past due or impaired. Regarding trade receivables and other receivables, and other loans or receivables that are neither impaired nor past due, there were no indications as at March 31, 2018, that defaults in payment obligations will occur.

Credit quality of financial assets and impairment loss

The ageing of trade receivables as of balance sheet date is given below. The age analysis has been considered from the due date.

1 Trade receivables overdue more than six months include RS, 462.22 crores as at March 31, 2018 (RS, 212.29 crores as at March 31, 2017) outstanding from state government organizations in india, which are considered recoverable.

Trade receivables consist of a large number of various types of customers, spread across geographical areas. Ongoing credit evaluation is performed on the financial condition of these trade receivables and where appropriate allowance for losses are provided. Further the Company, groups the trade receivables depending on type of customers and accordingly credit risk is determined.

(iii) Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.

The Company has obtained fund and non-fund based working capital lines from various banks. Further, the Company has access to funds from debt markets through commercial paper programs, non-convertible debentures, senior notes and other debt instruments. The Company invests its surplus funds in bank fixed deposit and liquid and liquid plus schemes of mutual funds, which carry no/low mark to market risks. The Company has also invested 15% of the non-convertible debentures (taken/issued by the Company) falling due for repayment in the next 12 months in bank deposits, to meet the regulatory norms of liquidity requirements.

The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.

The table below provides details regarding the contractual maturities of financial liabilities, including estimated interest payments as at March 31, 2018:

(iv) Derivative financial instruments and risk management

The Company has entered into a variety of foreign currency, interest rates and commodity forward contracts and options to manage its exposure to fluctuations in foreign exchange rates, interest rates and commodity price risk. The counterparty is generally a bank. These financial exposures are managed in accordance with the Company''s risk management policies and procedures.

The Company also enters into interest rate swaps and interest rate currency swap agreements, mainly to manage exposure on its fixed rate or variable rate debt. The Company uses interest rate derivatives or currency swaps to hedge exposure to exchange rate fluctuations on principal and interest payments for borrowings denominated in foreign currencies.

Specific transactional risks include risks like liquidity and pricing risks, interest rate and exchange rate fluctuation risks, volatility risks, counterparty risks, settlement risks and gearing risks.

Fair value of derivative financial instruments are determined using valuation techniques based on information derived from observable market data.

The gain/loss due to fluctuation in foreign currency exchange rates on derivative contracts, recognized in the income statement was RS, 6.31 crores (loss) and RS,85.41 crores (loss) for the years ended March 31, 2018 and 2017, respectively.

The gain/(loss) on commodity derivative contracts, recognized in the income statement was RS, 6.07 crores and RS, 9.06 crores for the years ended March 31, 2018 and 2017, respectively.

4. Related-party transactions

The Company''s related parties principally consist of subsidiaries, joint operations, associates and their subsidiaries, Tata Sons Ltd, subsidiaries and joint ventures of Tata Sons Ltd. The Company routinely enters into transactions with these related parties in the ordinary course of business. The Company enters into transactions for sale and purchase of products and services with its related parties.

iii) Effective April 30, 2018, the Company completed the merger of TML Drivelines Ltd (TML Drivelines) pursuant to a scheme of arrangement of merger. As TML Drivelines is a wholly owned subsidiary of the Company, the merger has been accounted in accordance with "Pooling of Interest Method" laid down by Appendix C of Indian Accounting Standard 103 (Ind AS 103): (Business combinations of entities under common control), notified under the Companies Act, 2013.

Accordingly, all assets, liabilities and reserves of TML Drivelines have been recorded in the books of account of the Company at their existing carrying amounts and in the same form. To the extent that there are inter-company loans, advances, deposits, balances or other obligations as between TML Drivelines and the Company, have been eliminated. The difference, between the investments held by the Company and all assets, liabilities and reserves of TML Drivelines, has been debited to capital reserve. Comparative accounting period presented in the financial statements of the Company has been restated for the accounting impact of the merger, as stated above, as if the merger had occurred from the beginning of the comparative period in the financial statements i.e. April 1, 2016.

iv) The Company''s certain assets related to defence business are classified as "Held for Sale'''' as they meet the criteria laid out under ind AS 105.

v) The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/accounting standards for material foreseeable losses on such long term contracts (including derivative contracts) has been made in the books of account.


Mar 31, 2017

1. Background and operations

Tata Motors Limited referred to as (“the Company” or “Tata Motors”), designs, manufactures and sells a wide range of automotive vehicles. The Company also manufactures engines for industrial and marine applications.

The Company is a public limited Company incorporated and domiciled in India and has its registered office at Mumbai, India. As at March 31, 2017, Tata Sons Limited, together with its subsidiaries owns 31.69 % of the Ordinary shares and 0.09 % of’A’ Ordinary shares of the Company, and has the ability to significantly influence the Company’s operation.

The standalone financial statements were approved by the Board of Directors and authorized for issue on May 23, 2017.

2. Equity Share Capital

(a) The entitlements to 4,94,618 Ordinary shares of RS.2 each (as at March 31, 2016 : 6,39,444 Ordinary shares of RS.2 each and as at April 1, 2015 : 4,85,165 Ordinary shares of RS.2 each) and 2,33,819 ‘A’ Ordinary shares of RS.2 each (as at March 31, 2016: 2,59,406 ‘A’ Ordinary shares of RS.2 each and as at April 1, 2015: 2,38,875 ‘A’ Ordinary shares of RS.2 each; are subject matter of various suits filed in the courts/forums by third parties for which final order is awaited and hence kept in abeyance.

(b) During the year ended, the Company has allotted 68,180 Ordinary Shares each of RS.2 each, previously unissued on account of unpaid calls.

* amounts less than RS.50,000/-

(c) Rights, preferences and restrictions attached to shares :

(i) Ordinary shares and ‘A’ Ordinary shares, both of RS.2 each :

- The Company has two classes of shares - the Ordinary shares and the ‘A’ Ordinary shares both of RS.2 each (together referred to as shares). In respect of every Ordinary share (whether fully or partly paid), voting rights shall be in the same proportion as the capital paid up on such Ordinary share bears to the total paid up Ordinary share capital of the Company. In case of every ‘A’ Ordinary share, if any resolution is put to vote on a poll or by postal ballot at any general meeting of shareholders, the holder shall be entitled to one vote for every ten ‘A’ Ordinary shares held as per the terms of its issue and if a resolution is put to vote on a show of hands, the holder of ‘A’ Ordinary shares shall be entitled to the same number of votes as available to holders of Ordinary shares.

- The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. Further, the Board of Directors may also declare an interim dividend. The holders of ‘A’ Ordinary shares shall be entitled to receive dividend for each financial year at five percentage point more than the aggregate rate of dividend declared on Ordinary shares for that financial year.

- In the event of liquidation, the shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholdings.

(ii) American Depository Shares (ADSs) and Global Depository Shares (GDSs) :

- Each ADS and GDS underlying the ADR and GDR respectively represents five Ordinary shares of RS.2 each. A holder of ADS and GDS is not entitled to attend or vote at shareholders meetings. An ADS holder is entitled to issue voting instructions to the depository with respect to the Ordinary shares represented by ADSs only ir accordance with the provisions of the Company’s ADSs deposit agreement and Indian Law. The depository for the ADSs and GDSs shall exercise voting rights in respect of the deposited shares by issue of an appropriate proxy or power of attorney in terms of the respective deposit agreements.

- Shares issued upon conversion of ADSs and GDSs will rank pari passu with the existing Ordinary shares of RS.2 each in all respects including entitlement of the dividend declared.

(d) Information regarding issue of shares in the last five years

(a) The Company has not issued any shares without payment being received in cash.

(b) The Company has not issued any bonus shares.

(c) The Company has not undertaken any buy-back of shares.

(e) During the year ended March 31, 2016, the Company alloted 15,04,90,480 Ordinary Shares (including 3,20,49,820 shares underlying the ADRs) of RS.2 each at a premium of RS.448 per share, aggregating RS.6,772.07 crores and 2,65,09,759 ‘A’ Ordinary Shares of RS.2 each at a premium of RS.269 per share, aggregating RS.718.42 crores pursuant to the Rights issue. 1,54,279 Ordinary Shares and 20,531 ‘A’ Ordinary Shares were kept in abeyance.

(A) Notes to reserves

(a) Capital redemption reserve

The Companies Act, 2013 (the “Companies Act”) requires that where a company purchases its own shares out of free reserves or securities premium account, a sum equal to the nominal value of the shares so purchased shall be transferred to a capital redemption reserve account and details of such transfer shall be disclosed in the balance sheet. The capital redemption reserve account may be applied by the company, in paying up unissued shares of the company to be issued to shareholders of the company as fully paid bonus shares. Tata Motors Limited established this reserve pursuant to the redemption of preference shares issued in earlier years.

(b) Debenture redemption reserve

The Companies Act requires that where a company issues debentures, it shall create a debenture redemption reserve out of profits of the company available for payment of dividend. The company is required to maintain a Debenture Redemption Reserve of 25% of the value of debentures issued, either by a public issue or on a private placement basis. The amounts credited to the debenture redemption reserve may not be utilized by the company except to redeem debentures.

(c) Dividends

The final dividend is recommended by the Board of Directors and is recorded in the books of account upon its approval by the shareholders. For the year ended March 31, 2016, dividend per share of R0.20 per Ordinary share of RS.2 each and R0.30 per ‘A’ Ordinary share of RS.2 each was declared.

For the year ended March 31, 2017, considering the losses in the Tata Motors Limited (Standalone), no dividend is permitted to be paid to the Members, as per the Companies Act, 2013 and the Rules framed thereunder.

I. Information regarding long-term borrowings

(i) Nature of security (on loans including interest accrued thereon) :

(a) Rated, Listed, Secured, 9.95% Coupon, Non-Convertible Debentures amounting to RS.200 crores and 10.25% Coupon, Non-Convertible Debentures amounting to RS.500 crores are secured by a pari passu charge by way of an English mortgage of the Company’s freehold land together with immovable properties, plant and machinery and other movable assets (excluding stock and book debts) situated at Sanand in the State of Gujarat.

(b) Buyers line of credit from banks are secured by hypothecation of existing current assets of the Company viz. stock of raw materials, stock in process, semi-finished goods, stores and spares not relating to plant and machinery (consumable stores and spares), bills receivable and book debts including receivable from hire purchase / leasing and all other movable current assets except cash and bank balances, loans and advances of the Company both present and future. Classified under other current liabilities being maturity before March 31, 2018.

Buyers credit facility taken by joint operation Tata Cummins Private Ltd are obtained in multiple tranches and are repayable at the end of three years from the individual drawdown dates commencing from 2016-2017. Interest @ LIBOR Spread is payable. The loan is secured by pari passu charge on plant and machinery and other movable assets of its Phaltan plant.

(c) The term loan of RS.581.00 crores (recorded in books at RS.120.82 crores) is due for repayment from the quarter ending March 31, 2033 to quarter ending March 31, 2037, along with simple interest at the rate of 0.10% p.a. The loan is secured by a second and subservient charge (creation of charge is under process) over Company’s freehold land together with immovable properties, plant and machinery and other movable assets (excluding stock and book debts) situated at Sanand plant in the State of Gujarat.

The term loan of RS.31.69 crores (recorded in books at RS.9.34 crores) is due for repayment from the quarter ending June 30, 2030 to March 31, 2032, along with a simple interest of 0.10% p.a. The loan is secured by bank guarantee for the due performance of the conditions as per the terms of the agreement.

(d) Term loan is taken by joint operation Fiat India Automobiles Private Ltd which is due for repayment from December.2017 to May 2023. The loan is secured by first charge over fixed assets procured from its loan/jeep project.

Term loan taken by joint operation Tata Cummins Private Ltd is repayable in four equal quarterly instalments starting from December.2016. Interest rate is basec on prevailing Base rate fixed spread. The loan is secured by exclusive charge on factory land and building of its Phaltan plant and hypothecation charge on other movable assets on pari passu basis.

II. Information regarding short-term borrowings

Loans, cash credits, overdrafts and buyers line of credit from banks are secured by hypothecation of existing current assets of the Company viz. stock of raw materials, stock in process, semi-finished goods, stores and spares not relating to plant and machinery (consumable stores and spares), bills receivable and book debts including receivable from hire purchase / leasing and all other moveable current assets except cash and bank balances, loans and advances of the Company both present and future.

III. Collateral

Inventory, trade receivables, other financial assets, property, plant and equipment with a carrying amount of RS.4,460.45 crores, RS.5,921.33 crores and RS.7,328.17 crores are pledged as collateral/ security against the borrowings as at March 31, 2017, 2016 and April 1, 2015, respectively.

3. Exceptional item VI (e) of RS.147.93 crores for the year ended March 31, 2017, relates to provision for inventory of BSIII vehicles as at March 31, 2017. This does not include higher level of customer discounts and variable marketing expenses in March 2017, to support higher level of retail sales, which have been netted off against ‘Income from operations’.

4. Commitments and contingencies

In the ordinary course of business, the Company faces claims and assertions by various parties. The Company assesses such claims and assertions and monitors the legal environment on an ongoing basis, with the assistance of external legal counsel, wherever necessary. The Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its financial statements, if material. For potential losses that are considered possible, but not probable, the Company provides disclosure in the financial statements but does not record a liability in its accounts unless the loss becomes probable.

The following is a description of claims and assertions where a potential loss is possible, but not probable. The Company believes that none of the contingencies described below would have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

Litigation

The Company is involved in legal proceedings, both as plaintiff and as defendant. There are claims which the Company does not believe to be of material nature, other than those described below.

Income Tax

The Company has ongoing disputes with Income Tax Authorities relating to tax treatment of certain items. These mainly include disallowed expenses, the tax treatment of certain expenses claimed by the Company as deductions and the computation of, or eligibility of, the Company’s use of certain tax incentives or allowances.

Most of these disputes and/or disallowances, being repetitive in nature, have been raised by the income tax authorities consistently in most of the years.

The Company has a right of appeal to the Commissioner of Income Tax (Appeals), or CIT (A), the Dispute Resolution Panel, or DRP, and to the Income Tax Appellate Tribunal, or ITAT, against adverse decisions by the assessing officer, DRP or CIT (A), as applicable. The income tax authorities have similar rights of appeal to the ITAT against adverse decisions by the CIT (A) or DRP. The Company has a further right of appeal to the High Court of Bombay or Supreme Court against adverse decisions by the appellate authorities for matters involving substantial question of law. The income tax authorities have similar rights of appeal.

As at March 31, 2017, there are matters and/or disputes pending in appeal amounting to RS.145.43 crores (RS.108.15 crores as at March 31, 2016 and RS.100.56 crores as at April 1, 2015).

Customs, Excise Duty and Service Tax

As at March 31, 2017, there are pending litigation for various matters relating to customs, excise duty and service taxes involving demands, including interest and penalties, of RS.1,324.19 crores (RS.1,284.60 crores as at March 31, 2016 and RS.1,334.21 crores as at April 1, 2015). These demands challenged the basis of valuation of the Company’s products and denied the Company’s claims of Central Value Added Tax, or CENVAT, credit on inputs. The details of the demands for more than RS.20 crores are as follows:

As at March 31, 2017, the Excise Authorities had denied a CENVAT credit of RS.29.43 crores and imposed a penalty of Rs.Nil for the period between April 2011 to September2012 (RS.52.41 crores and a RS.23.00 crores CENVAT credit and penalty, respectively, as at March 31, 2016 and RS.52.41 crores and a RS.23.00 crores CENVAT credit and penalty, respectively, as at April 1, 2015) in respect of consulting engineering services alleged to have been used exclusively for producing prototypes at the Engineering Research Centre, in Pune. The contention of the Excise Authorities is that since the Company claims exemptions from CENVAT under Notification No.167/71-CE, dated September11, 1971, the Company is not entitled to avail service tax credits on consulting engineering services used in the Engineering Research Centre. The matter is being contested by the Company before the appellate authorities. The Company believes it has a merit in its case, since the consulting engineering services are not exclusively used in the manufacture of prototypes and they form part of the assessable value of final products manufactured by the Company on which CENVAT is paid.

The Excise Authorities have raised a demand for RS.90.72 crores as at March 31, 2017 (RS.90.72 crores as at March 31, 2016 and RS.90.72 crores as at April 1, 2015), on account of alleged undervaluation’s of ex-factory discounts given by Company on passenger vehicles through invoices. The matter is being contested by the Company before the High Court of Bombay.

As at March 31, 2017, the Excise Authorities have raised a demand and penalty of RS.218.23 crores, (RS.198.56 crores as at March 31, 2016 and RS.187.60 crores as at April 1, 2015), due to the classification of certain chassis (as dumpers instead of goods transport vehicles) which were sent to automotive body builders by the Company, which the Excise Authorities claim requires the payment of the National Calamity Contingent Duty, or NCCD. The Company has obtained a technical expert certificate on the classification. The appeal is pending before the Custom Excise & Service Tax Appellate Tribunal.

The Excise Authorities had denied the Company’s claim of a CENVAT credit of RS.24.96 crores (RS.22.74 crores as at March 31, 2016 and RS.83.67 crores as at April 1, 2015) claimed by the Company from Fiscal 1992 to Fiscal 2013, on technical grounds. The matter is being contested by the Company before the appellate authorities.

As at March 31, 2017, the Excise Authorities had levied penalties and interest amounting to RS.679.88 crores (RS.679.88 crores as at March 31, 2016 and RS.679.88 crores as at April 1, 2015) with respect to CENVAT credit claimed by the Company from March 2010 to November2012, on inputs, stating that vehicles manufactured at Uttarakhand plant are “Exempted Products” and the Company may not claim a CENVAT credit on these vehicles. The Company has challenged this demand as NCCD and the automobile cess is assessed on those vehicles, which are “duties of excise”. Therefore, the Company asserts that these vehicles are not “Exempted Products”. The matter is being contested by the Company before the appellate authorities.

As at March 31, 2017, the Excise Authorities have raised a demand amounting to RS.29.54 crores (RS.29.54 crores as at March 31, 2016 and RS.29.54 crores as at April 1, 2015) on pre-delivery inspection charges and free after-sales service charges incurred by dealers on certain of the Company’s products on the alleged grounds that the pre-delivery inspection charges and free after-sales services are provided by the dealer on behalf of the Company and should be included in excisable value of the vehicle. The case is pending before Tribunal.

As at March 31, 2017, the Excise Authorities have raised a demand amounting to Rs.Nil (RS.21.89 crores as at March 31, 2016 and RS.21.89 crores as at April 1, 2015) with respect to customs duties on dies and fixtures imported under the EPCG Scheme and, in the case of the fixtures, are installed at premises of a vendor. The Tribunal has rejected the stay application filed by the department. The department has further filed an appeal with CESTAT.

As at March 31, 2017, the Excise Authorities have raised demand amounting to RS.34.68 crores (RS.14.73 crores as at March 31, 2016 and RS.12.70 crores as at April 1, 2015) with respect to denial of CENVAT credit on service tax availed on freight outward and courier services. The Company asserts that since freight forms part of the services on which the taxes have been paid, CENVAT credit can be availed. The Company is contesting the show cause notice.

Sales Tax

The total sales tax demands (including interest and penalty), that are being contested by the Company amount to RS.949.69 crores (RS.1134.14 crores as at March 31, 2016 and RS.907.84 crores as at April 1, 2015). The details of the demands for more than RS.20 crores are as follows:

The Sales Tax Authorities have raised demand of RS.208.59 crores (RS.403.38 crores as at March 31, 2016 and RS.120.12 crores as at April 1, 2015) towards rejection of certain statutory forms for concessional lower/nil tax rate (Form F and Form C) on technical grounds such as late submission, single form issued against different months / quarters dispatches / sales, etc. and denial of exemption from tax in absence of proof of export for certain years. The Company has contended that the benefit cannot be denied on technicalities, which are being complied with. The matter is pending at various levels.

In some of the states in India, the Sales Tax Authorities have raised disputes totaling up to RS.40.80 crores as at March 31, 2017 (RS.41.10 crores as at March 31, 2016 and RS.41.10 crores as at April 1, 2015), treating the stock transfers of vehicles from the Company’s manufacturing plants to regional sales offices and the transfers between two regional sales offices as sales liable for levy of sales tax. The Company is contesting this issue.

The Sales Tax authorities have denied input tax credit and levied interest and penalty thereon due to varied reasons aggregating to RS.305.46 crores as at March 31, 2017 (RS.330.17 crores as at March 31, 2016 and RS.366.45 crores as at April 1, 2015). The reasons for disallowing credit was mainly due to Taxes not paid by Vendors, incorrect method of calculation of set off as per the department, alleging suppression of sales as per the department etc. The matter is contested in appeal.

Sales tax demand aggregating RS.258.35 crores as at March 31, 2017 (RS.252.66 crores as at March 31, 2016 and RS.258.40 crores as at April 1, 2015) has been raised by Sales Tax Authorities disallowing the concessional rate of 2% on certain purchases of raw materials in case the final product is stock transferred for sale outside the state. The matter is pending with various authorities.

Other Taxes and Dues

Other amounts for which the Company may contingently be liable aggregate to RS.221.14 crores (RS.229.42 crores as at March 31, 2016 and RS.258.09 crores as at April 1, 2015). Following are the cases involving more than RS.20 crores:

The municipal authorities in certain states levy octroi duty (a local indirect tax) on goods brought inside the municipal limits at rates based on the classification of goods. Demands aggregating RS.61.65 crores as at March 31, 2017 (RS.61.65 crores as at March 31, 2016 and RS.61.65 crores as at April 1, 2015) had been raised demanding higher octroi duties on account of classification disputes relating to components purchased for the manufacture of vehicles and retrospective increase in octroi rates relating to past periods. The dispute relating to classification is presently pending before the Supreme Court and the other dispute is pending before the Bombay High Court on remand by the Supreme Court.

As at March 31, 2017, property tax amounting to RS.53.70 crores (RS.50.56 crores as at March 31, 2016 and RS.49.10 crores as at April 1, 2015) has been demanded by the local municipal authorities in respect of vacant land of the Company in the plant in Pimpri, Pune. The Company has filed Special Leave Petition (SLP) before the Supreme Court against an unfavourable decision of the Bombay High Court. The Supreme Court has disposed of the SLP and remanded the matter back to the local municipal corporation for fresh adjudication.

As at March 31, 2017, a penalty of RS.20.31 crores (RS.20.31 crores as at March 31, 2016 and RS.56.21 crores as at April 1, 2015) is likely to be imposed relating to a matter of regularization of construction of certain buildings in respect of which approvals from appropriate authorities are awaited. However, as the buildings were constructed as per the applicable development rules, the Company believes it will be possible to get the waiver of the same.

As at March 31, 2017, Sales tax / VAT amounting to RS.29.95 crores (RS.24.10 crores as at March 31, 2016 and RS.15.10 crores as at April 1, 2015) has been demanded by local authorities on dealers in respect of spare parts used for carrying out warranty repairs. The dispute is pending before the Supreme Court.

Commitments

The Company has entered into various contracts with vendors and contractors for the acquisition of plant and machinery, equipment and various civil contracts of a capital nature amounting to RS.1,493.73 crores at March 31, 2017 (RS.1,953.50 crores as at March 31, 2016 and RS.1,074.51 crores as at April 1, 2015), which are yet to be executed.

The Company has entered into various contracts with vendors and contractors for the acquisition of intangible assets of a capital nature amounting to RS.420.06 crores as at March 31, 2017 (RS.398.25 crores as at March 31, 2016 and RS.382.02 crores as at April 1, 2015), which are yet to be executed.

The Company has contractual obligation towards Purchase Commitment for Rs.Nil (RS.1,603.90 crores as at March 31, 2016 and RS.3,206.79 crores as at April 1, 2015).

5. Capital Management

The Company’s capital management is intended to create value for shareholders by facilitating the meeting of long-term and short-term goals of the Company.

The Company determines the amount of capital required on the basis of annual operating plans and long-term product and other strategic investment plans. The funding requirements are met through equity, non-convertible debentures, senior notes and other long-term/short-term borrowings. The Company’s policy is aimed at combination of short-term and long term borrowings.

The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

Total borrowings includes all long and short-term borrowings as disclosed in notes 23,24 and 26 (a) to the financial statements. Equity comprises all components excluding (profit)/loss on cash flow hedges.

6. Disclosures on financial instruments

This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments.

The details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognized, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2 to the financial statements.

(a) Financial assets and liabilities

The following table presents the carrying amounts and fair value of each category of financial assets and liabilities as at March 31, 2017.

Quoted prices in an active market (Level 1): This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of quoted equity shares, quoted corporate debt instruments and mutual fund investments.

Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities, measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e; as prices) or indirectly (i.e; derived from prices). This level of hierarchy include Company’s over-the-counter (OTC) derivative contracts.

Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets and liabilities measured using inputs that are not based or observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data.

There has been no transfers between level 1, level 2 and level 3 for the years ended March 31, 2017 and 2016.

Costs of certain unquoted equity instruments has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range. These investments in equity instruments are not held for trading. Instead, they are held for medium or long term strategic purpose. Upon the application of Ind AS 109, the group has chosen to designate these investments in equity instruments as at FVTOCI as the directors believes this provides a more meaningful presentation for medium or long term strategic investments, than reflecting changes in fair value immediately in profit or loss.

Derivatives are fair valued using market observable rates and published prices together with forecast cash flow information where applicable.

The short-term financial assets and liabilities are stated at amortized cost which is approximately equal to their fair value.

The fair value of borrowings which have a quoted market price in an active market is based on its market price and for other borrowings the fair value is estimatec by discounting expected future cash flows, using a discount rate equivalent to the risk-free rate of return, adjusted for the credit spread considered by the lenders for instruments of similar maturity.

Management uses its best judgment in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique.

Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of all the amounts that the Company could have realized or paid in sale transactions as of respective dates. As such, the fair value of the financial instruments subsequent to the respective reporting dates may be different from the amounts reported at each year end.

Offsetting

Certain financial assets and financial liabilities are subject to offsetting where there is currently a legally enforceable right to set off recognized amounts and the Company intends to either settle on a net basis, or to realise the asset and settle the liability, simultaneously.

Certain derivative financial assets and financial liabilities are subject to master netting arrangements, whereby in the case of insolvency, derivative financial assets and financial liabilities will be settled on a net basis.

The following table discloses the amounts that have been offset, in arriving at the balance sheet presentation and the amounts that are available for offset only under certain conditions as at March 31, 2017:

(b) Financial risk management

In the course of its business, the Company is exposed primarily to fluctuations in foreign currency exchange rates, interest rates, equity prices, liquidity and credit risk, which may adversely impact the fair value of its financial instruments.

The Company has a risk management policy which not only covers the foreign exchange risks but also other risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management policy is approved by the board of directors. The risk management framework aims to:

- Create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the Company’s business plan.

- Achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.

(c) Market risk

Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

(a) Foreign currency exchange rate risk:

The fluctuation in foreign currency exchange rates may have potential impact on the statement of profit and loss and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency. Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates. The risks primarily relate to fluctuations in U.S. dollar, Euro, GBP and Thai Baht against the functional currencies of the Company.

The Company, as per its risk management policy, uses foreign exchange and other derivative instruments primarily to hedge foreign exchange and interest rate exposure. Any weakening of the functional currency may impact the Company’s exports and cost of borrowings and consequently may increase the cost of financing the Company’s capital expenditures.

The Company evaluates the impact of foreign exchange rate fluctuations by assessing its exposure to exchange rate risks. It hedges a part of these risks by using derivative financial instruments in accordance with its risk management policies.

The foreign exchange rate sensitivity is calculated for each currency by aggregation of the net foreign exchange rate exposure of a currency and a simultaneous parallel foreign exchange rates shift in the foreign exchange rates of each currency by 10%.

(b) Interest rate risk

Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any movement in the reference rates could have an impact on the Company’s cash flows as well as costs.

The Company is subject to variable interest rates on some of its interest bearing liabilities. The Company’s interest rate exposure is mainly related to debt obligations. The Company also uses a mix of interest rate sensitive financial instruments to manage the liquidity and fund requirements for its day to day operations like short-term loans.

As at March 31, 2017 and 2016, financial liability of RS.3,418.97 crores and RS.4,848.39 crores, respectively, was subject to variable interest rates. Increase/decrease of 100 basis points in interest rates at the balance sheet date would result in decrease/increase in profit/(loss) before tax of RS.34.19 crores and RS.48.48 crores for the year ended March 31, 2017 and 2016, respectively.

The model assumes that interest rate changes are instantaneous parallel shifts in the yield curve. Although some assets and liabilities may have similar maturities or periods to re-pricing, these may not react correspondingly to changes in market interest rates. Also, the interest rates on some types of assets and liabilities may fluctuate with changes in market interest rates, while interest rates on other types of assets may change with a lag.

The risk estimates provided assume a parallel shift of 100 basis points interest rate across all yield curves. This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The period end balances are not necessarily representative of the average debt outstanding during the period.

This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

(Note: The impact is indicated on the profit/(loss) before tax basis).

(c) Equity Price risk

Equity Price Risk is related to the change in market reference price of the investments in equity securities.

The fair value of some of the Company’s investments measured at fair value through other comprehensive income exposes the Company to equity price risks. These investments are subject to changes in the market price of securities. The fair value of Company’s investment in quoted equity securities as at March 31, 2017, 2016 and April 1, 2015 was RS.218.18 crores, RS.143.34 crores and RS.143.53 crores, respectively. A 10% change in equity price as at March 31, 2017, 2016 and April 1, 2015 would result in an impact of RS.21.82 crores, RS.14.43 crores and RS.14.35 crores, respectively (Note: The impact is indicated on equity before consequential tax impact, if any).

(ii) Credit risk

Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.

Financial instruments that are subject to concentrations of credit risk, principally consist of investments classified as fair value through profit or loss, trade receivables, loans and advances and derivative financial instruments. None of the financial instruments of the Company result in material concentrations of exposure to credit risks.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk was Rs.5,732.64 crores as at March 31, 2017, RS.5,717.59 crores as at March 31,2016, being the total of the carrying amount of balances with banks, short term deposits with banks, trade receivables, finance receivables, margin money and other financial assets excluding equity investments.

Financial assets that are neither past due nor impaired

None of the Company’s cash equivalents, including time deposits with banks, are past due or impaired. Regarding trade receivables and other receivables, and other loans or receivables that are neither impaired nor past due, there were no indications as at March 31,2017, that defaults in payment obligations will occur.

In addition, exposure to credit risk is also in relation to financial guarantee contracts for which the Company has created a liability for potentional exposures.

(iii) Liquidity risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.

The Company has obtained fund and non-fund based working capital lines from various banks. Further, the Company has access to funds from debt markets through commercial paper programs, non-convertible debentures, senior notes and other debt instruments. The Company invests its surplus funds in bank fixed deposit and liquid and liquid plus schemes of mutual funds, which carry no/low mark to market risks. The Company has also invested 15% of the non-convertible debentures (taken/issued by the Company) falling due for repayment in the next 12 months in bank deposits, to meet the regulatory norms of liquidity requirements.

The Company also constantly monitors funding options available in the debt and capital markets with a view to maintaining financial flexibility.

The table below provides details regarding the contractual maturities of financial liabilities, including estimated interest payments as at March 31,2017:

(iv) Derivative financial instruments and risk management

The Company has entered into variety of foreign currency, interest rates and commodity forward contracts and options to manage its exposure to fluctuations in foreign exchange rates, interest rates and commodity price risk. These financial exposures are managed in accordance with the Company’s risk management policies and procedures. The Company also enters into interest rate swaps and interest rate currency swap agreements, mainly to manage exposure on its fixed rate or variable rate debt. The Company uses interest rate derivatives or currency swaps to hedge exposure to exchange rate fluctuations on principal and interest payments for borrowings denominated in foreign currencies.

Specific transactional risks include risks like liquidity and pricing risks, interest rate and exchange rate fluctuation risks, volatility risks, counterparty risks, settlement risks and gearing risks.

Fair value of derivative financial instruments are determined using valuation techniques based on information derived from observable market data.

The gain/(loss) on due to fluctuation in foreign currency exchange rates on derivative contract, recognized in the statement of profit and loss was RS.85.41 crores and RS.26.51 crores for the years ended March 31, 2017 and 2016, respectively.

The gain/(loss) on commodity derivative contracts, recognized in the statement of profit and loss was RS.9.06 crores and (RS.8.58 crores) for the years ended March 31, 2017 and 2016, respectively.

7. Related-party transactions

The Company’s related parties principally consist of subsidiaries, joint operations, associates and their subsidiaries, Tata Sons Limited., subsidiaries and joint ventures of Tata Sons Limited. The Company routinely enters into transactions with these related parties in the ordinary course of business. The Company enters into transactions for sale and purchase of products and services with its related parties.

The following table summarizes related-party transactions and balances for the year ended/as at March 31, 2017:

8. Employee benefits

Defined Benefit Plan

Pension and post retirement medical plans

The following table sets out the funded and unfunded status and the amounts recognized in the financial statements for the pension and the post retirement medical plans in respect of Tata Motors and joint operations:

9. Additional information

The financial statements include the Company’s proportionate share of assets, liabilities, income and expenditure in its two Joint Operations, namely Tata Cummins Private Limited and Fiat India Automobiles Private Limited. Below are supplementary details of Tata Motors Limited on standalone basis excluding interest in the aforesaid two Joint Operations:

10. Other Notes:

i) Micro, Small and Medium Enterprises Development Act, 2006

The information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. The amount of principal and interest outstanding during the year is given below :

ii) Disclosure on Specified Bank Notes (SBNs)

As required by MCA notification G.S.R. 308 (E) dated March 30, 2017, details in respect of Specified Bank Notes (SBNs) held and transacted during the period from November8, 2016 to December.30, 2016 are given below:

iii) Expenditure incurred on Research and Development by Tata Motors Ltd on standalone basis excluding interest in the joint operations

iv) The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/ accounting standards for material foreseeable losses on such lone term contracts (including derivative contracts) has been made in the books of account.

v) Current year figures are shown in bold prints.


Mar 31, 2016

1. Capital work-in-progress as at March 31, 2014 included building under construction at Singur in West Bengal of Rs.309.88 crores for the purposes of manufacturing automobiles. In October 2008, the Company moved the Nano project from Singur in West Bengal to Sanand in Gujarat. In June 2011, the newly elected Government of West Bengal (State Government) enacted a law cancelling the land lease agreement at Singur, and took over possession of the land. The Company challenged the constitutional validity of the law. In June 2012, the Calcutta High Court declared the law unconstitutional and restored Company''s rights under the land lease agreement. The State Government fi led an appeal in the Supreme Court of India in August 2012, which is pending disposal. Though the Company continues to rigorously press its rights, contentions and claims in the matter, the Company has been advised that the time it may take in disposal of the appeal is uncertain. The Company has also been advised that it has a good case and can strongly defend the appeal, but the questions that arise are issues of constitutional law and thus the result of the appeal cannot be predicted. In these circumstances, in view of the uncertainty on the timing of resolution, following the course of prudence, the management has during the year ended March 31, 2015, made a provision for carrying capital cost of buildings at Singur amounting to Rs.309.88 crores included under the head "works operations and other expenses" excluding other assets (electrical installations etc.) and expenses written off / provided in earlier years, security expenses, lease rent and claim for interest on the whole amount (including Rs.309.88 crores). The Company shall however continue to pursue the case and assert its rights and its claims in the Courts.

2. The Company has joint ventures with (a) Fiat Group Automobiles S.p.A., Italy, Fiat India Automobiles Private Limited (FIAL), for manufacturing passenger cars, engines and transmissions at Ranjangaon in India and (b) Cummins Inc, USA, Tata Cummins Private Limited (TCL), for manufacturing engines in India. The Company has an investment of Rs.1,567.04 crores as at March 31, 2016, representing 50% shareholding in FIAL and Rs.90.00 crores as at March 31,2016 representing 50% shareholding in TCL.

(a) The proportionate share of assets and liabilities as at March 31, 2016 and income and expenditure for the year 2015-2016 of FIAL as per their unaudited financial statement are given below:

3. Other notes

(i) The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/ accounting standards for material foreseeable losses on such long term contracts (including derivative contracts) has been made in the books of account.

(ii) Micro, Small and Medium Enterprise Development Act, 2006

The information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. The amount of principal and interest outstanding during the year is given below :

(iii) Current year figures are shown in bold prints.

(iv) Previous year figures have been regrouped / reclassified wherever necessary to correspond with the current year classification / disclosure.


Mar 31, 2014

(Rs. in crores)

As at As at

1. Contingent liabilities, commitments (to the extent not provided for) March 31, March 31, 2014 2013

Description of claims and assertions where a potential loss is possible, but not probable is reported under note (1) and (2) below:

1 Claims against the Company not acknowledged as debts

(i) Sales tax - Gross 869.50 353.54

- Net of tax 573.96 238.84

(ii) Excise duty - Gross 856.67 867.35

- Net of tax 565.49 585.94

(iii) Others - Gross 250.34 173.90

- Net of tax 157.52 117.48

(iv) IncomeTax in respect of matters pending in appeal /others 92.58 95.20

2 The claims / liabilities in respect of excise duty, sales tax and other matters where the issues were decided in favour of the Company for which the Department is in further appeal 71.42 70.80

3 Other money for which the Company is contingently liable in respect of bills discounted and export sales on deferred credit 348.39 204.30

4 Estimated amount of contracts remaining to be executed on capital account and not provided for 1,629.65 1,526.11

5 Purchase commitments 9,597.72 12,142.44

2. Other notes

(i) Capital Work-in-progress as at March 31,2014 includes building under construction at Singur in West Bengal of Rs.309.88 crores for the purposes of manufacturing automobiles. In October 2008, the Company moved the Nano project from Singur in West Bengal to Sanand in Gujarat. In June 2011, the newly elected Government of West Bengal (State Government) enacted a legislation to cancel land lease agreement. The Company challenged the legal validity of the legislation. In June 2012, the High Court of Calcutta ruled against the validity of the legislation and restored Company''s rights under the land lease agreement. The State Government filed an appeal in the Supreme Court of India, which is pending disposal. Based on management''s assessment no provision is considered necessary to the carrying cost of buildings at Singur.

(ii) The Company has substantially completed the process of divesting its investments in certain foreign subsidiary companies to TML Holding Pte Ltd, Singapore, a wholly owned subsidiary. Conseguently, the year ended March 31, 2014 includes a profit of Rs.1,966.12 crores on such divestment (Rs. Nil for the year ended March 31,2013).

(iii) During FY 2012-13, the Company sold the Forge division at Jamshedpur to its wholly-owned subsidiary, TML Drivelines Ltd on a slump sale basis for a consideration of X110 crores vide an agreement dated March 28,2013.


Mar 31, 2013

1. (i) Related party disclosures for the year ended March 31, 2013

(a) Related party and their relationship

1. Subsidiaries :

Tata Technologies Ltd

TAL Manufacturing Solutions Ltd

TML Drivelines Ltd

Sheba Properties Ltd

Concorde Motors (India) Ltd

Tata Daewoo Commercial Vehicle Co. Ltd

Tata Motors Insurance Broking & Advisory Services Ltd

Tata Motors European Technical Centre PLC

Tata Motors Finance Ltd

Tata Marcopolo Motors Ltd

Tata Motors (Thailand) Ltd

Tata Motors (SA) (Proprietary) Ltd

PT Tata Motors Indonesia

TML Holdings Pte. Ltd, Singapore

TML Distribution Company Ltd

Tata Hispano Motors Carrocera S.A.

Trilix S.r.l

Tata Precision Industries Pte. Ltd

Jaguar Land Rover Automotive PLC

(formerly known as Jaguar Land Rover PLC)

Jaguar Cars Ltd

(formerly known as Jaguar Cars Overseas Holdings Ltd)

Jaguar Land Rover Austria GmbH

Jaguar Belux NV

Jaguar Land Rover Ltd

(formerly kno wn as Jaguar Cars Ltd)

Jaguar Land Rover Japan Ltd

Jaguar Cars South Africa (pty) Ltd

Jaguar Land Rover Exports Ltd (Land Rover Exports Ltd

Business transferred on April 1,2012)

The Daimler Motor Company Ltd

The Jaguar Collection Ltd

Daimler Transport Vehicles Ltd

S S Cars Ltd

The Lanchester Motor Company Ltd

Jaguar Hispania SL

Jaguar Land Rover Deutschland GmbH

Land Rover Ireland Ltd

2. Associates :

Tata AutoComp Systems Ltd

Tata Cummins Ltd

Tata Precision Industries (India) Ltd

Tata Hitachi Construction Machinery Company Ltd

(formerly known as Telco Construction Equipment Co. Ltd)

Jaguar Cars Finance Ltd

Nita Company Ltd

Tata Sons Ltd (Investing Party)

Automobile Corporation of Goa Ltd

Spark44 (JV) Ltd

INCAT International Plc.

Tata Technologies Europe Ltd

INCAT GmbH

Tata Technologies Inc

Tata Technologies de Mexico, S.A. de CV

Tata Technologies (Canada) Inc

Tata Technologies (Thailand) Ltd

Tata Technologies Pte Ltd, Singapore

Miljobil Grenland AS (upto August30,2012)

Tata Hispano Motors Carrocerries Maghreb

Tata Daewoo Commercial Vehicles Sales and Distribution Co. Ltd

Tata Engineering Services (Pte) Ltd

(Liquidated w.e.f July7,2012)

Jaguar Land Rover North America LLC

Land Rover Belux SA/NV

Jaguar Land Rover Nederland BV

Jaguar Land Rover Portugal - Veiculos e Pecas, LDA

Jaguar Land Rover Australia Pty Ltd

Jaguar Land Rover Italia SpA

Land Rover Espana SL

Jaguar Land Rover Korea Co. Ltd

Jaguar Land Rover Automotive Trading (Shanghai) Ltd

Jaguar Land Rover Canada ULC

Jaguar Land Rover France, SAS

Jaguar Land Rover (South Africa) (Pty) Ltd

Jaguar e Land Rover Brazil Importacao e Comercio de Veiculos Ltda

Jaguar Land Rover (Russia) Limited Liability Company

Land Rover Parts Ltd

Jaguar Land Rover (South Africa) Holdings Ltd

Jaguar Land Rover India Ltd

(incorporated w.e.f. October25,2012)

Land Rover (business and assets transferred to

Jaguar Land Rover Ltd except Jaguar Land Rover Automotive

Trading (Shanghai) Co Ltd w.e.f. January 1,2013)

Land Rover Group Ltd

PT Tata Motors Distribusi Indonesia

(incorporated w.e.f. February 11,2013)

3. Joint Ventures :

Fiat India Automobiles Ltd

Tata HAL Technologies Ltd

Suzhou Chery Jaguar Land Rover Trading Co. Ltd (Interim JV)

Chery Jaguar Land Rover Automotive Co. Ltd (Incorporated in November 2012)

4. Key Management Personnel

Mr. P M Telang (upto June 21,2012)

Mr. Karl Slym (from September 13,2012)

Mr. R Pisharody (from June 21,2012)

Mr. S B Borwankar (from June 21,2012)

2. The Company has a joint venture with Fiat Group Automobiles S.p.A., Italy, Fiat India Automobiles Limited (FIAL), for manufacturing passenger cars, engines anc transmissions at Ranjangaon in India. The Company has an investment of Rs. 1,242.04 crores as at March 31, 2013, representing 50% shareholding in FIAL .

The proportionate share of assets and liabilities as at March 31, 2013 and income and expenditure for the year 2012-2013 of FIAL as per their unaudited financial statement are given below :

3. Other notes

(i) Capital work-in-progress as at March 31, 2013 includes building under construction at Singur in West Bengal of Rs. 309.88 crores for the purposes of manufacturing automobiles. In October 2008, the Company moved the Nano project from Singur in West Bengal to Sanand in Gujarat. In June 2011, the Government of West Bengal (State Government) enacted a legislation to cancel land lease agreement. The Company challenged the legal validity of the legislation. In June 2012, the High Court of Calcutta ruled against the validity of the legislation and restored Companys rights under the land lease agreement. The State Government has filed an appeal in the Supreme Court of India, which is pending disposal. Based on managements assessment no provision is considered necessary to the carrying cost of buildings at Singur.

(ii) The Company sold the Forge division at Jamshedpur to its wholly-owned subsidiary, TML Drivelines Ltd on a slump sale basis for a consideration of Rs. 110 crores vide an agreement dated March 28, 2013.

(iii) Micro, Small and Medium Enterprises Development Act, 2006 :

The information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. The amount of principal and interest outstanding during the year is given below :

(iv) Current year figures are shown in bold prints

(v) Previous year figures have been regrouped / reclassified wherever necessary to correspond with the current year classification / disclosure.


Mar 31, 2012

(1) The Company has given a letter of comfort to HDFC Bank against the short term and long term loans aggregating Rs.235 crores given by HDFC Bank to Tata Marcopolo Motors Ltd (TMML). The letter of comfort is restricted to 51% of loan amount i.e. Rs. 120 crores. Also the Company has given an undertaking to HDFC Bank that it will not dilute its stake below 51% during the tenor of the loan.

(2) The Company has given a letter of comfort to Citibank NA towards the short term and long term loans aggregating THB 1,055 million (Rs. 174.19 crores as on March 31, 2012) given by Citibank NA to Tata Motors (Thailand) Ltd (TMTL). The Company has also given letter of comfort to ICICI Bank towards working capital facility aggregating THB 300 million (Rs. 49.53 crores as on March 31,2012) given by ICICI Bank to TMTL. Further the Company has given an undertaking to Citibank NA as well as to ICICI Bank for non- disposal of its shareholding in TMTL below 51% during the tenor of the loan.

(3) The Company has given a letter of comfort to GE Commercial Distribution Finance Europe Ltd for revolving syndicated loan facility to Jaguar Cars Ltd and Land Rover for outstanding balance of GBP 50.20 million (Rs. 409.31 crores as on March 31, 2012). Also the Company has given an undertaking to GE Commercial Distribution Finance Europe Ltd to retain ultimate 100% ownership of Jaguar Cars Ltd and Land Rover at all times during the tenor of the loan.

(4) The Company has given a letter of comfort to Citibank NA against working capital loans extended by the bank to Tata Hispano Motors Carrocera, S.A. (Hispano) aggregating Euro 25 million (Rs. 169.86 crores as on March 31, 2012). The Company has also given a letter of comfort to Banco de Valencia against bill discounting facility extended by the bank to Hispano aggregating Euro 2 million (Rs. 13.59 crores as on March 31, 2012).The Company has also given an undertaking to Citibank NA and Banco de Valencia for non-disposal of its shareholding in Hispano during the tenor of the loan.

(5) The Company has given letter of comfort to certain banks and other lenders against credit facilities extended to Fiat India Automobiles Ltd for Rs 1,600 crores and Euro 130 million (Rs. 883.29 crores as on March 31, 2012). The letter of comfort is restricted to 50% of the value of credit facilities extended i.e. Rs. 1,241.65 crores.

(6) The Company has given a letter of comfort to HDFC Bank amounting to Rs. 1 crore against working capital facility to Tata Motors Insurance Broking and Advisory Services Limited (TMIBASL). Also the Company has given an undertaking to HDFC Bank that it will not dilute its stake below 51% during the tenor of the loan.

(7) Trilix Srl., Turin (Italy) is a limited liability company.

(8) In terms of the Scheme of Amalgamation sanctioned by order dated July 29, 2011 of Hon'ble High Court of Bombay, HV Transmission Ltd has been amalgamated with TML Drivelines Ltd (formerly known as HV Axles Ltd) with effect from April 1, 2011.

9. Contingent liabilities, commitments (to the extent not provided for) :

Description of claims and assertions where a potential loss is possible, but not probable is reported under note (1) and (2) below :

As at As at March 31, March 31,

1 Claims against the Company not acknowledged as debts - 2012 2011

(i) Sales tax - Gross 413.12 1,003.68

- Net of tax 279.08 670.28

(ii) Excise duty - Gross 656.93 492.55

- Net of tax 443.79 328.94

(iii) Others - Gross 157.02 156.92

- Net of tax 106.07 104.80

(iv) Income Tax in respect of matters :

(a) Decided in the Company's favour by Appellate Authorities and for which the Department is in further appeal 2.38 2.38

(b) Pending in appeal / other matters 95.20 105.19

2 The claims / liabilities in respect of excise duty, sales tax and other matters where the issues were decided in favour of the Company for which the Department is in further appeal 69.77 31.28

3 Other money for which the Company is contingently liable -

(i) In respect of bills discounted and export sales on deferred credit 139.21 170.60

(ii) The Company has given guarantees for liability in respect of receivables assigned by way of securitisation 107.80 634.34

(iii) Cash margins / collateral [Note 20, page 152] 90.29 428.82

(iv) In respect of subordinated receivables 9.51 37.16

(v) Others 6.64 13.68

4 Estimated amount of contracts remaining to be executed on capital account and not provided for 1,536.25 1,857.43

5 Purchase commitments 12,527.63 14,699.18

10. Other Notes

(i) The revised Schedule VI has become effective from April 1, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year figures have been regrouped/ reclassified wherever necessary to correspond with the current year classification / disclosure.

(ii) During the year ended March 31, 2012, TML Holding Pte Ltd. (Singapore) (TMLHS), a wholly owned subsidiary of the Company, bought back 91,666,700 equity shares for a consideration of USD 2.2 per share (Rs.108.79 per share), based on an independent valuation of TMLHS. The consideration of Rs. 997.24 crores has been credited to Investment account.

(iii) Capital work-in-progress as at March 31, 2012 includes building under construction at Singur in West Bengal of Rs.309.88 crores for the purposes of manufacturing automobiles. In October 2008, the Company moved the Nano project from Singur in West Bengal to Sanand in Gujarat.The newly elected Government of West Bengal enacted a legislation on June 14, 2011, which was notified on June 20, 2011, to cancel the land lease relating to the project at Singur. The Company has challenged the legal validity of the legislation including the process of compensation in the Courts of Law, the outcome of which is pending as of the date of approval of these financials by the Board of Directors. Based on management's assessment no provision is considered necessary to the carrying cost of buildings at Singur.


Mar 31, 2011

1 I. The Issued and subscribed capital includes :

(a) Ordinary Shares allotted as fully paid up shares for consideration other than cash:

7,53,470 Ordinary Shares allotted to Daimler - Benz AG in consideration of materials supplied to the Company in the financial year 1956-57,

3,00,000 Ordinary Shares allotted to the Shareholders of erstwhile Investa Machine Tools and Engineering Company Limited in terms of the Scheme of Amalgamation sanctioned by the Bombay High Court in the fnancial year 1966-67,

7,59,510 Ordinary Shares allotted to the Shareholders of the erstwhile Central Bank of India in terms of the Scheme of Amalgamation in the fnancial year 1970-71,

1,83,823 Ordinary Shares issued to the Shareholders of the erstwhile Noduron Founders Maharashtra Limited in terms of the merger in the fnancial year 1992-93,

15,24,30,083 Ordinary Shares issued to Financial Institutions and holders of convertible debentures / bonds on conversion of term loans / debentures / bonds,

1,45,04,949 Ordinary Shares issued to the Shareholders of the erstwhile Tata Finance Limited in terms of the merger in the fnancial year 2005- 06.

(b) 11,12,92,760 Ordinary Shares issued as fully paid up Bonus Shares by utilising Securities Premium Account, Capital Reserve, Capital Redemption Reserve, Amalgamation Reserve, contribution for Capital Expenditure Account and General Reserve.

(c) 2,55,02,678 (as at March 31, 2010 2,55,02,622) Ordinary Shares allotted against the exercise of equivalent number of warrants pertaining to the rights issue of 2001 at Rs.120/- per share.

(d) 7,60,78,654 (as at March 31, 2010 5,25,08,228) Ordinary Shares issued upon conversions of Foreign Currency Convertible Notes (FCCNs). Details are as follows:

(i) 1% FCCN due 2008 :

1,83,98,095 (as at March 31, 2010 : 1,83,98,095) Ordinary Shares issued against 99,940 (as at March 31, 2010 : 99,940) Notes.

(ii) 0% FCCN due 2009 :

74,66,867 (as at March 31, 2010 : 74,66,867) Ordinary Shares issued against 97,590 (as at March 31, 2010 : 97,590) Notes.

(iii) 1% FCCN due 2011 :

2,29,50,915 (as at March 31, 2010 : 1,88,16,152) Ordinary Shares issued against 2,99,102 (as at March 31, 2010 : 2,29,634) Notes.

(iv) 0% FCCN due 2011

78,39,043 (as at March 31, 2010 : 78,27,114) Ordinary Shares issued against 1,074 (as at March 31, 2010 : 1,071) Notes.

(v) 4% FCCN due 2014 :

1,94,23,734 (as at March 31, 2010 : Nil) Ordinary Shares issued against 2,576 (as at March 31, 2010 : Nil) Notes.

(e) 6,42,77,215 (as at March 31, 2010 : 6,42,76,883) Ordinary Shares atRs. 340 per share and 6,42,77,215 (as at March 31, 2010 : 6,42,76,883) A Ordinary Shares atRs. 305 per share were allotted on exercising of options pertaining to Rights issue of 2008.

(f) 2,99,04,306 Global Depository Shares (GDS) each representing one share at a price of US$ 12.54 per GDS, aggregating US$ 375 million (Rs. 1794.19 crores), issued in the year 2009-2010.

(g) During the year, the Company has issued 8,320,300 Ordinary Shares at a price ofRs. 1,074 per Ordinary Share and 32,165,000 A Ordinary Shares at a price ofRs. 764 per A Ordinary Share through Qualifed Institutional Placement (QIP).

II. The entitlements to 99,310 (as at March 31, 2010 : 1,49,534) Ordinary Shares and 54,832 (as at March 31, 2010: 99,790) A Ordinary Shares are subject matter of various suits fled in the courts / forums by third parties for which fnal order is awaited and hence kept in abeyance.

The application for 49,836 Ordinary Shares and 44,626 A Ordinary Shares have been received, to be issued out of shares kept in abeyance as on March 31, 2011, for which allotment is pending.

2 Secured Loans :

(i) Nature of Security (on loans including interest accrued thereon) :

(a) Rated, Listed, Secured, Credit Enhanced, 2% Coupon, Premium Redemption Non-Convertible Debentures amounting toRs. 3,400 crores are secured by a second charge in favour of Vijaya Bank , Debenture Trustee and frst ranking parri passu charge in favour of State Bank of India as Security trustee on behalf of the Guarantors, by way of English mortgage of the Companys lands, freehold and leasehold, together with all buildings, constructions and immovable and movable properties situated at Chinchwad, Pimpri, Chikhali and Maval in Pune District and plant and machinery and other movable assets situated at Pantnagar in the State of Uttarakhand and at Jamshedpur in the state of Jharkhand.

(b) Rated, Listed, Secured, 9.95% Coupon, Non-Convertible Debentures amounting to Rs. 200 crores is being secured by frst ranking charge by way of an English mortgage of the Companys freehold land together with immovable properties, plant and machinery and other movable assets (excluding stock and book debts) situated at Sanand in the State of Gujarat.

(c) Rated, Listed, Secured, 10.25% Coupon, Non-Convertible Debentures amounting to Rs. 500 crores is being secured by frst ranking charge by way of an English mortgage of the Companys freehold land together with immovable properties, plant and machinery and other movable assets (excluding stock and book debts) situated at Sanand in the State of Gujarat.

(d) Loans, Cash Credits, Overdrafts and Buyers line of credit from Banks are secured by hypothecation of existing current assets of the Company viz. stock of raw materials, stock in process, semi-fnished goods, stores and spares not relating to plant and machinery (consumable stores and spares), bills receivable and book debts including receivable from Hire Purchase / Leasing and all other moveable current assets except cash and bank balances, loans and advances of the Company both present and future.

4. Future instalments receivable in respect of vehicle loans [Schedule 10 (A), page 80] includes Rs. 452.13 crores (as at March 31, 2010 Rs. 595.71 crores) in respect of instalments that have become due but have not been recovered. Out of these Rs. 337.85 crores (as at March 31, 2010 Rs. 351.50 crores) are due for over six months. T here is an aggregate provision of Rs. 245.77 crores (as at March 31, 2010 Rs. 269.29 crores) made in respect of overdue instalments.

6 i) Related party disclosures for the year ended March 31, 2011

a) Related Party and their relationship

1. Subsidiaries :

Tata Technologies Ltd INCAT International Plc.

TAL Manufacturing Solutions Ltd Tata Technologies Europe Ltd

H V Axles Ltd INCAT SAS (liquidated w.e.f. April 30, 2010)

H V Transmissions Ltd INCAT GmbH

Sheba Properties Ltd Tata Technologies Inc

Concorde Motors (India) Ltd Tata Technologies de Mexico, S.A. de CV

Tata Daewoo Commercial Vehicle Co. Ltd Tata Technologies (Canada) Inc

Tata Motors Insurance Broking & Advisory Services Ltd Tata Technologies (Thailand) Ltd

Tata Motors European Technical Centre Plc Tata Technologies Pte Ltd

Tata Motors Finance Ltd Miljobil Grenland AS

Tata Marcopolo Motors Ltd Tata Hispano Motors Carrocerries Maghreb

Tata Motors (Thailand) Ltd (Formerly known as Carrocerries Hispano Maghreb, Morocco)

Tata Motors (SA) (Proprietary) Ltd Tata Daewoo Commercial Vehicles Sales and Distribution Co. Ltd

TML Holdings Pte. Ltd, Singapore (Incorporated on April 9, 2010)

TML Distribution Company Ltd Tata Engineering Services (Pte) Ltd (from February 15, 2011)

Tata Hispano Motors Carrocera S.A. Jaguar Land Rover North America LLC

Trilix S.r.l (w.e.f September 29, 2010) Land Rover Belux SA/NV

Tata Precision Industries Pte. Ltd Land Rover Ireland Ltd

(w.e.f February 15, 2011) Jaguar Land Rover Nederland BV

JaguarLandRover Ltd Jaguar Land Rover Portugal - Veiculos e Pecas, LDA

Jaguar Cars Overseas Holdings Ltd Jaguar Land Rover Australia Pty Ltd

Jaguar Land Rover Austria GmbH Land Rover Exports Ltd

Jaguar Belux NV Land Rover Italia SpA

Jaguar Cars Ltd Land Rover Espana SL

Jaguar Land Rover Japan Ltd Land Rover Deutschland GmbH

Jaguar Cars South Africa (pty) Ltd Jaguar Land Rover Mexico SA de CV (upto July 12, 2010)

Jaguar Italia SpA Jaguar Land Rover Korea Co. Ltd

Jaguar Cars Exports Ltd Jaguar Land Rover Automotive Trading (Shanghai) Co. Ltd

The Daimler Motor Company Ltd Jaguar Land Rover Canada ULC

The Jaguar Collection Ltd Jaguar Land Rover France, SAS

Daimler Transport Vehicles Ltd Jaguar Land Rover (South Africa) (Pty) Limited

S.S. Cars Ltd Jaguar Land Rover Brazil LLC

The Lanchester Motor Company Ltd Limited Liability Company "Jaguar Land Rover" (Russia)

Jaguar Hispania Sociedad Land Rover Parts Ltd

Jaguar Deutschland GmbH Land Rover Parts US LLC

Land Rover

Land Rover Group Ltd

2. Associates :

Tata AutoComp Systems Ltd Nita Company Ltd

Tata Cummins Ltd Tata Sons Ltd (Investing Party)

Tata Precision Industries Pte. Ltd (upto February 14, 2011) Automobile Corporation of Goa Ltd

(subsidiary from February 15, 2011) Telco Construction Equipment Co. Ltd

Tata Precision Industries (India) Ltd Jaguar Cars Finance Ltd

(w.e.f. February 15, 2011)

3. Joint Ventures :

Fiat India Automobiles Ltd TATA HAL Technologies Ltd

4. Key Management Personnel

Mr. Carl-Peter Forster (w.e.f. April 1, 2010) Mr. P M Telang


Mar 31, 2010

1 I. The Issued and subscribed capital includes :

(a) Ordinary Shares allotted as fully paid up shares for consideration other than cash:

- 7,53,470 Ordinary Shares allotted to Daimler – Benz AG in consideration of materials supplied to the Company in the financial year 1956-57,

- 3,00,000 Ordinary Shares allotted to the Shareholders of erstwhile Investa Machine Tools and Engineering Company Limited in terms of the Scheme of Amalgamation sanctioned by the Bombay High Court in the financial year 1966-67,

- 7,59,510 Ordinary Shares allotted to the Shareholders of the erstwhile Central Bank of India in terms of the Scheme of Amalgamation in the financial year 1970-71,

- 1,83,823 Ordinary Shares issued to the Shareholders of the erstwhile Noduron Founders Maharashtra Limited in terms of the merger in the financial year 1992-93,

- 15,24,30,083 Ordinary Shares issued to Financial Institutions and holders of convertible debentures / bonds on conversion of term loans / debentures / bonds,

- 1,45,04,949 Ordinary Shares issued to the Shareholders of the erstwhile Tata Finance Limited in terms of the merger in the financial year 2005-06.

(b) 11,12,92,760 Ordinary Shares issued as fully paid up Bonus Shares by utilising Securities Premium Account, Capital Reserve, Capital Redemption Reserve, Amalgamation Reserve, contribution for Capital Expenditure Account and General Reserve.

(c) 2,55,02,622 (as at March 31, 2009 2,55,02,402) Ordinary Shares allotted against the exercise of equivalent number of warrants pertaining to the rights issue of 2001 at Rs.120/- per share.

(d) 5,25,08,228 (as at March 31, 2009 2,58,64,962) Ordinary Shares issued upon conversions of Foreign Currency Convertible Notes (FCCNs). Details are as follows:

(i) 1% FCCN due 2008

1,83,98,095 (as at March 31, 2009 : 1,83,98,095) Ordinary Shares issued against 99,940 (as at March 31, 2009 : 99,940) Notes. The balance 60 notes have been redeemed during the year 2008-09.

(ii) 0% FCCN due 2009

74,66,867 (as at March 31, 2009 : 74,66,867) Ordinary Shares issued against 97,590 (as at March 31, 2009 : 97,590) Notes. The balance 2,410 notes have been redeemed during the year 2009-10.

(iii) 1% FCCN due 2011

1,88,16,152 (as at March 31, 2009 : Nil) Ordinary Shares issued against 2,29,634 (as at March 31, 2009 : Nil) Notes.

(iv) 0% FCCN due 2011

78,27,114 (as at March 31, 2009 : Nil) Ordinary Shares issued against 1,071 (as at March 31, 2009 : Nil) Notes.

(e) 6,42,76,883 (as at March 31, 2009 : 6,42,76,164) Ordinary Shares at Rs. 340 per share and 6,42,76,883 (as at March 31, 2009 : 6,42,76,164) ‘A’ Ordinary Shares at Rs. 305 per share were allotted on exercising of options pertaining to Rights issue of 2008.

(f) The Company has issued 2,99,04,306 Global Depository Shares (GDS) each representing one share at a price of US$ 12.54 per GDS, aggregating US$ 375 million (Rs. 1794.19 crores).

II. The entitlements to 1,49,534 (as at March 31, 2009 : 1,50,473) Ordinary Shares and 99,790 (as at March 31, 2009: 1,00,509) ‘A’ Ordinary Shares are subject matter of various suits filed in the courts / forums by third parties for which final order is awaited and hence kept in abeyance.

2 Secured Loans :

(i) Nature of Security (on loans including interest accrued thereon) :

(a) Rated, Listed, Secured, Credit Enhanced, 2% Coupon, Premium Redemption Non-Convertible Debentures are secured by a second charge in favour of Vijaya Bank , Debenture Trustee and first ranking parri passu charge in favour of State Bank of India as Security trustee on behalf of the Guarantors, by way of English mortgage of the Company’s lands, freehold and leasehold, together with all buildings, constructions and immovable and movable properties situated at Chinchwad, Pimpri, Chikhali and Maval in Pune District and plant and machinery and other movable assets situated at Pantnagar in the State of Uttarakhand.

(b) Rated, Listed, Secured, 9.95% Coupon, Non-Convertible Debentures is being secured by a parri passu charge by way of an English mortgage of the Company’s freehold land together with immovable properties, plant and machinery and other movable assets situated at Sanand in the State of Gujarat.

(c) Loans, Cash Credits, Overdrafts and Buyers line of credit from Banks are secured by hypothecation of existing current assets of the Company viz. stock of raw materials, stock in process, semi-finished goods, stores and spares not relating to plant and machinery (consumable stores and spares), bills receivable and book debts including receivable from Hire Purchase / Leasing and all other moveable current assets except cash and bank balances, loans and advances of the Company both present and future.

(A) Notes to Balance Sheet (contd.)

3 i) Related party disclosures for the year ended March 31, 2010

a) Related Party and their relationship

1. Subsidiaries :

Tata Technologies Ltd

TAL Manufacturing Solutions Ltd

H V Axles Ltd

H V Transmissions Ltd

Sheba Properties Ltd

Concorde Motors (India) Ltd

Telco Construction Equipment Co. Ltd (till March 29, 2010)

Tata Daewoo Commercial Vehicle Co. Ltd

Tata Motors Insurance Broking & Advisory Services Ltd

Tata Motors European Technical Centre Plc

Tata Motors Finance Ltd

Tata Marcopolo Motors Ltd

Tata Motors (Thailand) Ltd

Tata Motors (SA) (Proprietary) Ltd

TML Holdings Pte. Ltd, Singapore

TML Distribution Company Ltd

Tata Hispano Motors Carrocera S.A. (from October 16, 2009)

(formerly known as Hispano Carrocera, S.A.)

JaguarLandRover Ltd

Jaguar Cars Overseas Holdings Ltd

Jaguar Land Rover Austria GmbH

Jaguar Belux NV

Jaguar Cars Limited

Jaguar Land Rover Japan Limited

Jaguar Cars South Africa (pty) Ltd

Jaguar Italia SpA

Jaguar Cars Exports Ltd

The Daimler Motor Company Ltd

The Jaguar Collection Ltd

Daimler Transport Vehicles Ltd

S.S. Cars Ltd

The Lanchester Motor Company Ltd

Jaguar Hispania Sociedad

Jaguar Deutschland GmbH

Land Rover

Land Rover Group Ltd

Jaguar Land Rover North America LLC

Land Rover Belux SA/NV

Land Rover Ireland Ltd

Jaguar Land Rover Nederland BV (formerly known as Land Rover Nederland BV)

INCAT International Plc.

Tata Technologies Europe Limited

INCAT SAS

INCAT GmbH

INCAT Holdings B.V. (liquidated w.e.f. April 11, 2009)

Lemmerpoort B.V (under Bankruptcy proceedings)

INCAT K.K (liquidated w.e.f. July 31, 2009)

Tata Technologies Inc (formerly known as INCAT Systems Inc)

Tata Technologies de Mexico, S.A. de CV

(formerly known as Integrated Systems Technologies de Mexico, S.A. de C.V.)

Tata Technologies (Canada) Inc (formerly known as INCAT Solutions of Canada Inc)

Tata Technologies (Thailand) Limited (formerly known as INCAT (Thailand) Ltd)

Tata Technologies Pte Ltd, Singapore

Miljobil Grenland AS

Miljobil Innovasjan AS (merged with Miljobil Grenland AS w.e.f. October 12, 2009)

Carrosseries Hispano Maghreb, Morocco (from October 16, 2009)

Serviplem S.A (upto March 29, 2010)

Eurl Lebrero France (upto March 29, 2010)

Inner Mongolia North Baryval Engineering Special Vehicle

Corporation Ltd (upto March 29, 2010)

Comoplesa Lebrero S.A (upto March 29, 2010)

Baryval Assistencia Tecnica S.L (upto March 29, 2010)

Jaguar Land Rover Portugal - Veiculos e Pecas, LDA

Jaguar Land Rover Australia Pty Ltd

Land Rover Exports Ltd

Land Rover Italia SpA

Land Rover Espana SL

Land Rover Deutschland GmbH

Jaguar & Land Rover Asia Pacific Company Limited (liquidated w.e.f. October 12, 2009)

Jaguar Land Rover Mexico SA de CV

Jaguar Land Rover Korea Co. Ltd

Jaguar Land Rover Automotive Trading (Shanghai) Co. Ltd

Jaguar Land Rover Canada ULC

Jaguar Land Rover France, SAS

Jaguar Land Rover (South Africa) (Pty) Limited

Jaguar Land Rover Brazil LLC (from April 1, 2009)

Limited Liability Company “Jaguar Land Rover” (Russia) (from April 1, 2009)

Land Rover Parts Ltd (from April 2, 2009)

Land Rover Parts US LLC (from June 19, 2009)

2. Associates :

Tata AutoComp Systems Ltd

Tata Cummins Ltd

Tata Precision Industries Pte. Ltd

Nita Company Ltd

Tata Sons Ltd (Investing Party)

Automobile Corporation of Goa Ltd

Tata Hispano Motors Carrocera S.A. (upto October 15, 2009)

(formerly known as Hispano Carrocera, S.A.) (subsidiary from October 15, 2009)

Telco Construction Equipment Co. Ltd (from March 30, 2010)

(subsidiary upto March 29, 2010)

Telcon Ecoroad Resurfaces Pvt. Ltd (upto March 29, 2010)

Jaguar Cars Finance Ltd

4. Joint Ventures :

Fiat India Automobiles Ltd TATA HAL Technologies Ltd

4. Key Management Personnel

Mr. Ravi Kant (upto June 1, 2009)

Mr. P M Telang

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