27 Provisions

(a) Accounting policy

A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the
obligation. When the effect of the time value of money is material, provisions are determined by discounting the
expected future cash flows using a pre-tax rate that reflects current market assessments of the time value of money
and the risks specific to the liability.

Product warranty expenses

The estimated liability for product warranties is recognised when products are sold or when new warranty programmes
are initiated. These estimates are established using historical information on the nature, frequency and average cost
of warranty claims and management estimates regarding possible future warranty claims, customer goodwill and
recall complaints. The timing of outflows will vary depending on when warranty claim will arise, being typically up to
six years. The Company also has back-to-back contractual arrangement with its suppliers in the event that a vehicle
fault is proven to be a supplier's fault.

The Company's calculation methodology uses detailed historical data corrected for experience as information becomes
available as well as individual campaign assumptions (such as scope, uptake rates and repair costs). The calculated
provisions are compared to current spend rates to assess balances versus expected future obligations. This can lead
to changes in the carrying value of provisions as assumptions are updated over the life of each warranty to reflect
where actual experience differs to past experience, for example due to higher inflation or timing of claims impacting

disbursement curve analysis. However, there are no individual assumptions that can be reasonably expected to move
over the next financial year to such a degree that it would result in a material adjustment to the warranty provision.

The Company notes that changes in the automotive environment presents its own significant challenges, particularly
due to the lack of maturity and historical data available at this time to help inform estimates for future warranty
claims, as well as any associated recoveries from suppliers due to such claims. The related provisions are made with
the Company's best estimate at this time to settle such obligations in the future but will be required to be continually
refined as sufficient, real-world data becomes available.

The discount on the warranty provision is calculated using a risk-free discount rate as the risks specific to the liability,
such as inflation, are included in the base calculation.

Estimates of the future costs of warranty actions are subject to numerous uncertainties, including the enactment
of new laws and regulations, the number of vehicles affected by a service or recall action and the nature or final
cost of the corrective action. Due to the uncertainty and potential volatility of the inputs to these assumptions, it is
reasonably possible that the actual cost expenditure over an extended period of time could be materially different to
the estimate in a range of amounts that cannot be reasonably estimated.

Estimates are made of the expected reimbursement claim based upon historical levels of recoveries from supplier,
adjusted for inflation and applied to the population of vehicles under warranty as on Balance Sheet date. Supplier
reimbursements are recognised as separate asset "Recoverable from Suppliers" under Other financial assets. (Refer
Notes 11 and 12).

28 Income taxes

(a) Accounting policy

Income tax expense comprises current tax and deferred tax. Income tax expense is recognised in the statement of
Profit and Loss except when they relate to items that are recognised outside of profit and loss (whether in other
comprehensive income or directly in equity), in which case tax is also recognised outside profit and loss. Current
income taxes are determined based on respective taxable income of each taxable entity.

Deferred tax assets and liabilities are recognised for the future tax consequences of temporary differences between
the carrying values of assets and liabilities and their respective tax bases, and unutilised business loss and depreciation
carry-forwards and tax credits. Such deferred tax assets and liabilities are computed separately for each taxable
entity. Deferred tax assets are recognised to the extent it is probable that future taxable income will be available
against which the deductible temporary differences, unused tax losses, depreciation carry-forwards and unused tax
credits could be utilised. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced
to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset
to be recovered.

Deferred tax assets and liabilities are measured based on the tax rates that are expected to apply in the period
when the asset is realised or the liability is settled, based on the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date. Current and deferred tax assets and liabilities are offset when there
is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income
taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on
a net basis. The extent to which deferred tax assets can be recognised is based on an assessment of the probability
that future taxable income will be available against which the deductible temporary differences and tax loss carry¬
forwards can be utilised.

Deferred tax liabilities on taxable temporary differences arising from interests in joint operation are not recognised
if the Company is able to control the timing of the reversal and it is probable that the temporary difference will not
reverse in the foreseeable future.

(b) Government incentives includes ^208 crores as at March 31, 2025 (^186 crores as at March 31, 2024) 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.

31 Revenue recognition
(a) Accounting policy

The Company generates revenue principally from-

i) Sale of products - commercial vehicles and vehicle parts.

The Company recognises revenues from sale of products measured at the amount of transaction price (net of
variable consideration), when it satisfies its performance obligation at a point in time which is when products
are delivered to dealers or when delivered to a carrier for export sales, which is when control including risks
and rewards and title of ownership pass to the customer, collectability of the resulting receivables is reasonably
assured and when there are no longer any unfulfilled obligation. The transaction price of goods sold is net of
variable consideration on account of various discounts and schemes offered by the Company as part of the
contract. The Company operates predominantly on cash and carry basis.

The Company offers sales incentives in the form of variable marketing expense to customers, which vary
depending on the timing and customer of any subsequent sale of the vehicle. This sales incentive is accounted for
as a revenue reduction and is constrained to a level that is highly probable not to reverse the amount of revenue
recognised when any associated uncertainty is subsequently resolved. The Company estimates the expected
sales incentive by market and considers uncertainties including competitor pricing, ageing of retailer stock and
local market conditions.

The consideration received in respect of transport arrangements for delivering of vehicles to the customers are
recognised net of their costs within revenues in the income statement.

ii) Sale of services - maintenance service and extended warranties for commercial vehicles.

Income from sale of maintenance services and extended warranties are recognised as income over the relevant
period of service or extended warranty.

When the Company sells products that are bundled with maintenance service or extended period of warranty,
such services are treated as a separate performance obligation only if the service or warranty is in excess of the
standard offerings to the customer. In such cases, the transaction price allocated towards such maintenance
service or extended period of warranty based on relative standalone selling price and is recognised as a contract
liability until the service obligation has been met. The price that is regularly charged for an item when sold
separately is the best evidence of its standalone selling price. In the absence of such evidence, the primary
method used to estimate standalone selling price is the expected cost plus a margin, under which the Company
estimates the cost of satisfying the performance obligation and then adds an appropriate margin based on
similar services.

The Company operates certain customer loyalty programs under which customer is entitled to reward points
on the spend towards Company's products. The reward points earned by customers can be redeemed to claim
discounts on future purchase of certain products or services. Transaction price allocated towards reward points
granted to customers is recognised as a deferred income liability and transferred to income when customers
redeem their reward points.

Sales of services include certain performance obligations that are satisfied over a period of time. Any amount
received in advance in respect of such performance obligations that are satisfied over a period of time is recorded
as a contract liability and recorded as revenue when service is rendered to customers.

Refund liabilities comprise of obligation towards customers to pay for discounts and sales incentives.

32 Other income

(a) Accounting policy

Government Grants and Incentives

Other income includes export and other recurring and non-recurring incentives from Government (referred as
"incentives"). Government grants are recognised when there is a reasonable assurance that the Company will comply
with the relevant conditions and the grant will be received. Government grants are recognised in the statement
of profit and loss, either on a systematic basis when the Company recognises, as expenses, the related costs that
the grants are intended to compensate or, immediately if the costs have already been incurred. Government grants
related to assets are deferred and amortised over the useful life of the asset. Government grants related to income
are presented as an offset against the related expenditure, and government grants that are awarded as incentives
with no ongoing performance obligations to the Company are recognised as income in the period in which the grant
is received.

*The amount of ^27 crores and ^28 crores (net of recovery from subsidiaries) has accrued for the year ended March 31,
2025 and 2024, respectively towards share based payments.

(A) Share based payments
Accounting policy

The Company recognises compensation expense relating to share based payments in accordance with Ind AS 102
Share-based Payment. Stock options granted by the Company to its employees are accounted as equity settled
options. Accordingly, the estimated fair value of options granted that is determined on the date of grant, is charged
to statement of Profit and Loss on a straight line basis over the vesting period of options which is the requisite service
period, with a corresponding increase in equity.

Equity-settled share option plan

(i) Tata Motors Limited Employees Stock Option Scheme 2018

During the year ended March 31, 2025, 862,318 shares were exercised and allotted under Employee Stock Option
Scheme 2018 at an exercise price of ^345/- per share. The Share price of options during the exercise period was
ranging from ^923 to ^1,047.

(ii) Share-based Long Term Incentive Scheme 2021

The Company has granted Performance Stock Units ("PSUs") and Employee Stock Options ("ESOs") to its
employees under the Tata Motors Limited Share-based Long Term Incentive Scheme 2021 ("TML SLTI Scheme
2021" or "Scheme").

As per the scheme, the number of shares that will vest is conditional upon certain performance measures
determined by Nomination and Remuneration Committee (NRC). The performance is measured over vesting
period of the options granted. 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 ^338/- for ESOs and ^2/- for PSUs. Option
granted will vest after three years from date of grant. Number of shares that will vest range from 0.5 to 1.2 per
option granted depending on performance measures.

Expected volatility during the expected term of the options is based on historical volatility of the observed
market prices of the Company's publicly-traded equity shares during a period equivalent to the expected term
of the options.

Weighted average equity share price during the exercise period was ^888 per ordinary share.

(iii) Share-based Long Term Incentive Scheme 2024

The Company has granted Performance Stock Units ("PSUs") to its employees under the Tata Motors Limited Share-
based Long Term Incentive Scheme 2024 ("TML SLTI Scheme 2024" or "Scheme").

As per the scheme, the number of shares that will vest is conditional upon certain performance measures determined
by Nomination and Remuneration Committee (NRC). The performance is measured over vesting period of the options
granted. 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 ^2/- for PSUs. Option granted will vest after three years from date of grant.
Number of shares that will vest range from 0.5 to 1.2 per option granted depending on performance measures.

(B) Employee benefits
(a) Accounting policy

(i) Gratuity

Tata Motors Limited and its Joint operation have an obligation towards gratuity, a defined benefit retirement
plan covering eligible employees. The plan provides for a lump-sum payment to vested employees at
retirement, death while in employment or on termination of employment of an amount equivalent to 15 to
30 days salary payable for each completed year of service. Vesting occurs upon completion of five years of
service. Tata Motors Limited makes annual contributions to gratuity funds established as trusts. Tata Motors
Limited account for the liability for gratuity benefits payable in the future based on an actuarial valuation.

(ii) Bhavishya kalyan yojana (BKY)

Bhavishya Kalyan Yojana is an unfunded defined benefit plan for employees of Tata Motors Limited. The
benefits of the plan include pension in certain cases, payable up to the date of normal superannuation had
the employee been in service, to an eligible employee at the time of death or permanent disablement, while
in service, either as a result of an injury or as certified by the appropriate authority. The monthly payment
to dependents of the deceased/disabled employee under the plan equals 50% of the salary drawn at the
time of death or accident or a specified amount, whichever is greater. Tata Motors Limited account for the
liability for BKY benefits payable in the future based on an actuarial valuation.

(iii) Provident fund and family pension

In accordance with Indian law, eligible employees of Tata Motors Limited and joint operations are entitled
to receive benefits in respect of provident fund, a defined contribution plan, in which both employees
and the Company make monthly contributions at a specified percentage of the covered employees' salary
(currently 12% of employees' salary). The contributions, as specified under the law, were made to the
provident fund and pension fund set up as an irrevocable trust or to respective Regional Provident Fund
Commissioner and the Central Provident Fund under the State Pension scheme. The interest rate, payable
to the members of the trust, was not to be lower than the statutory rate of interest declared by the Central
Government under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall,
if any, was made good by the Company. The embedded interest rate guarantee is considered to be defined
benefit for the joint operation as Provident Fund is managed by trust.

(iv) Post-retirement medicare scheme

Under this unfunded scheme, employees of Tata Motors Limited receive medical benefits subject to certain
limits on amounts of benefits, periods after retirement and types of benefits, depending on their grade and
location at the time of retirement. Employees separated from the Company as part of an Early Separation
Scheme, on medical grounds or due to permanent disablement are also covered under the scheme. Tata
Motors Limited account for the liability for post-retirement medical scheme based on an actuarial valuation.

(v) Compensated absences

The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees
are entitled to accumulate leave subject to certain limits, for future encashment. The liability is provided
based on the number of days of unutilised leave at each balance sheet date on the basis of an independent
actuarial valuation.

(vi) Remeasurement gains and losses

Remeasurement comprising actuarial gains and losses, the effect of the asset ceiling and the return on assets
(excluding interest) relating to retirement benefit plans, are recognised directly in other comprehensive
income in the period in which they arise. Remeasurement recorded in other comprehensive income is not
reclassified to statement of Profit and Loss.

Actuarial gains and losses relating to long-term employee benefits are recognised in the statement of Profit
and Loss in the period in which they arise.

(vii) Measurement date

The measurement date of retirement plans is March 31.

The present value of the defined benefit liability and the related current service cost and past service cost
are measured using projected unit credit method.

The present value of the post-employment benefit obligations depends on a number of factors, it is
determined on an actuarial basis using a number of assumptions. The assumptions used in determining the
net cost/(income) for pensions include the discount rate, inflation and mortality assumptions. Any changes
in these assumptions will impact upon the carrying amount of post-employment benefit obligations. Key
assumptions and sensitivities for post employment benefit obligations are disclosed in note below.

Note:

(i) Tata Motors Limited (the "Company") in October 2019 had by way of an application, addressed to the Employee
Provident Fund Organization ("EPFO"), offered to surrender its exempted Pension fund. Subsequently, the Company
incurred losses for three consecutive years (during FY 2019-20, 2020-21 & 2021-22), thereby calling for an automatic
cancellation/ withdrawal of pension fund exemption. On November 4, 2022, the Hon'ble Supreme Court ruled that
those who were members of a statutory pension fund as on September 1, 2014, can exercise a joint option with their
employer to contribute to their Pension fund beyond the statutory limit and be eligible to draw a higher pension
calculated based on last 5 years average salary. The Company accepted and approved the applications filed by its
employees for joint option to contribute on higher salary on the EPFO's portal.

As per the actuarial valuation, an additional provision of ^165 crores have been made for pension on higher salary
during the year ended March 31, 2025. EPFO, however, redirected a few of such Joint Applications to the Company's
Pension Trust. Considering this, along with the fact that there was no positive movement towards the conclusion of
the surrender process of the pension fund, the Company filed a Writ Petition with Hon'ble Delhi High Court ("Court")
for seeking directions to EPFO to immediately start administering TML's Pension Fund. The trade unions have also
filed another Writ Petition for expediting the transfer of pension fund corpus and accepting the Joint Applications of
the employees.

EPFO in December 2024, sent a recommendation to the Government of India for cancellation of the Company's
pension exemption, subject to fulfilment of certain conditions. The parties had series of meetings to channelize the
migration of members data to EPFO's unified portal, prominently the joint meetings in April 2025, of which the duly
signed minutes were filed in the Court on May 1, 2025. It has been agreed in the said minutes that EPFO will provide a
facility on the Unified Portal for the Company to migrate the members' data on EPFO's portal. The Company will start
contribution in statutory pension fund w.e.f. wage month of July 2025. Pension Trust will transfer the liability towards
normal pension valuation carried by EPFO. The Court took the above minutes on its records and fixed the matter on
July 23, 2025 for implementation of same as per timelines agreed in the minutes.

(ii) During the year ended March 31, 2024, the Company partially sold its stake (21.3%) represented by 8,64,36,184
equity shares in Tata Technologies Limited (TTL) for total consideration of ^3,812 crores, which resulted in profit of
^ 3,748 crores.

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. Also, the below amount excludes consequential interest and penalty, if any.

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, 2025, there are contingent liabilities towards matters and/or disputes pending in appeal amounting to
^174 crores (^164 crores as at March 31, 2024).

Customs, Excise Duty and Service Tax

As at March 31, 2025, there are pending litigation for various matters relating to customs, excise duty and service taxes
involving demands, including interest and penalties, of ^409 crores (^348 crores as at March 31, 2024). 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.

Sales Tax/VAT

The total sales tax demands (including interest and penalty), that are being contested by the Company amount to ^437
crores as at March 31, 2025 (^847 crores as at March 31, 2024). The details of the demands for more than ^100 crores are
as follows:

The Sales Tax Authorities have raised demand of ^123 crores as at March 31, 2025 (^227 crores as at March 31, 2024)
towards rejection of certain statutory forms for concessional lower/nil tax rate 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 ^196 crores as at March 31, 2025 (^250 crores as at March 31, 2024). 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.

Other Taxes and Dues

Other amounts for which the Company may contingently be liable aggregate to ^715 crores as at March 31, 2025 (^637
crores as at March 31, 2024). Following are the cases involving more than ^100 crores.

As at March 31, 2025, property tax amounting to ^176 crores (^169 crores as at March 31, 2024) has been demanded by
the local municipal authorities in respect of vacant land of the Company in the plant in Pimpri (including residential land),
Chinchwad and Chikhali. The Company had filed Special Leave Petition (SLP) before the Hon'ble Supreme Court of India
against an unfavorable decision of the Bombay High Court. The Hon'ble Supreme Court of India had disposed of the SLP
and remanded the matter back to the local municipal corporation for fresh adjudication. After fresh hearing, the municipal
authority again passed the same order as it had passed earlier, which the Company has challenged before the Civil Court.
The Civil Court has passed an injunction order restraining the municipal authority from taking any action of recovery.

As at March 31, 2025, the Company has contingent liability of ^416 crores (^ 340 crores as at March 31, 2024) towards
Temporary Registration Fee and short payment of Road Tax to the office of District Transport Officer, Government of
Jharkhand basis demand for earlier years. The Company believes it has a good case on merits to contest the matter and
hence it has been disclosed as contingent liability.

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. Also refer note 38(i) for pension.

Commitments

During the year ended March 31, 2024, the Company has acquired 26.79% stake in Freight Commerce Solutions Private
Limited (Freight Tiger) for a consideration of ^150 crores. Freight Tiger is a digital platform that provides end-to-end
logistics value chain solutions for cargo movement in the country. The Securities Subscription Agreement (SSA) signed with
Freight Tiger also includes a provision enabling the Company to further invest ^100 crores over the next two years, at the
then prevailing market value.

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 ^770 crores as at March 31, 2025 (^590 crores
as at March 31, 2024), 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 ^128 crores as at March 31, 2025
(^82 crores as at March 31, 2024), which are yet to be executed.

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.

42 Financial instruments
(a) Accounting policy

i) Recognition:

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial
instruments are initially recognised when the Company becomes a party to the contractual provisions of
the instrument.

Initial measurement

Financial instruments are initially recognised at its fair value. Transaction costs directly attributable to the
acquisition or issue of financial instruments are recognised in determining the carrying amount, if it is not
classified as at fair value through profit or loss. However, trade receivables that do not contain a significant
financing component are measured at transaction price. Transaction costs of financial instruments carried at fair
value through profit or loss are expensed in the statement of profit and loss.

Subsequently, financial instruments are measured according to the category in which they are classified.
Classification and measurement - financial assets

Classification of financial assets is based on the business model in which the instruments are held as well as the
characteristics of their contractual cash flows. The business model is based on management's intentions and
past pattern of transactions. Financial assets with embedded derivatives are considered in their entirety when
determining whether their cash flows are solely payment of principal and interest. The Company reclassifies
financial assets when and only when its business model for managing those assets changes.

Financial assets are classified into three categories

Financial assets at amortised cost: Financial assets having contractual terms that give rise on specified dates
to cash flows that are solely payments of principal and interest on the principal outstanding and that are held
within a business model whose objective is to hold such assets in order to collect such contractual cash flows
are classified in this category. Subsequently, these are measured at amortised cost using the effective interest
method less any impairment losses.

Equity investments at fair value through other comprehensive income (Equity instruments): These include
financial assets that are equity instruments and are designated as such upon initial recognition irrevocably.

Subsequently, these are measured at fair value and changes therein are recognised directly in other comprehensive
income, net of applicable income taxes.

Dividends from these equity investments are recognised in the statement of Profit and Loss when the right to
receive payment has been established. When the equity investment is derecognised, the cumulative gain or loss
in equity is transferred to retained earnings.

Financial assets at fair value through other comprehensive income (Debt instruments): Financial assets having
contractual terms that give rise on specified dates, to cash flows that are solely payments of principal and
interest on the principal outstanding and that are held within a business model whose objective is to hold such
assets in order to collect such contractual cash flows as well as to sell the financial asset, are classified in this
category. Subsequently, these are measured at fair value, with unrealised gains or losses being recognised in
other comprehensive income apart from any expected credit losses or foreign exchange gains or losses, which
are recognised in profit or loss.

Financial assets at fair value through profit and loss: Financial assets are measured at fair value through profit
and loss unless it is measured at amortised cost or at fair value through other comprehensive income on initial
recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair
value through profit and loss are immediately recognised in profit and loss.

Classification and measurement - financial liabilities:

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as
at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition.
Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense,
are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the
effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or
loss. Any gain or loss on derecognition is also recognised in profit or loss.

Financial guarantee contracts: These are initially measured at their fair values and, are subsequently measured
at the higher of the amount of loss allowance determined or the amount initially recognised less, the cumulative
amount of income recognised.

Other financial liabilities: These are measured at amortised cost using the effective interest method.

Equity instruments:

An equity instrument is any contract that evidences residual interests in the assets of the Company after
deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received,
net of direct issue costs.

ii) Determination of fair value:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, regardless of whether that price is directly observable or
estimated using another valuation technique.

The fair value of a financial instrument on initial recognition is normally the transaction price (fair value of the
consideration given or received).

In estimating the fair value of an asset or liability, the Company takes into account the characteristics of the asset
or liability if market participants would take those characteristics into account when pricing the asset or liability
at the measurement date.

Subsequent to initial recognition, the Company determines the fair value of financial instruments that are quoted
in active markets using the quoted bid prices (financial assets held) or quoted ask prices (financial liabilities
held) and using valuation techniques for other instruments. Valuation techniques include discounted cash flow
method and other valuation methods.

iii) Derecognition of financial assets and financial liabilities:

The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset
expires or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to

another entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership
and continues to control the transferred asset, the Company recognises its retained interest in the asset and an
associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards
of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also
recognises a collateralised borrowing for the proceeds received. Any gain or loss arising on derecognition is
recognised in profit or loss. When a financial instrument is derecognised, the cumulative gain or loss in equity
is transferred to the statement of profit and loss unless it was an equity instrument electively held at fair value
through other comprehensive income. In this case, any cumulative gain or loss in equity is transferred to retained
earnings. Financial assets are written off when there is no reasonable expectation of recovery. The Company
reviews the facts and circumstances around each asset before making a determination. Financial assets that are
written off could still be subject to enforcement activities.

Financial liabilities are decrecognised when these are extinguished, that is when the obligation is discharged,
cancelled or has expired.

iv) Impairment of financial assets:

The Company recognises a loss allowance for expected credit losses on a financial asset that is at amortised
cost or at fair value through other comprehensive income. Expected credit losses are forward looking and are
measured in a way that is unbiased and represents a probability-weighted amount, takes into account the time
value of money (values are discounted using the applicable effective interest rate) and uses reasonable and
supportable information.

v) Hedge accounting:

The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency
fluctuations relating to highly probable forecast transactions. The Company designates these forward contracts
in a cash flow hedging relationship by applying the hedge accounting principles. The Company also uses interest
rate swaps to hedge its variability in cash flows from interest payments arising from floating rate liabilities i.e.
when interests are paid according to benchmark market interest rates.

Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair
value, and changes therein are generally recognised in profit or loss.

At inception of the hedge relationship, the Company documents the economic relationship between the hedging
instrument and the hedged item, including whether changes in the cash flows of the hedging instrument are
expected to offset changes in the cash flows of the hedged item. The Company documents its risk management
objective and strategy for undertaking its hedging transactions. The Company designates only the intrinsic value
of foreign exchange options in the hedging relationship. The Company designates amounts excluding foreign
currency basis spread in the hedging relationship for both foreign exchange forward contracts and cross- currency
interest rate swaps. Changes in the fair value of the derivative contracts that are designated and effective as
hedges of future cash flows are recognised in the cash flow hedge reserve within other comprehensive income
(net of tax), and any ineffective portion is recognised immediately in the statement of profit and loss.

Amounts accumulated in equity are reclassified to the statement of Profit and Loss or Balance Sheet in the
periods in which the forecasted transactions occurs.

For forwards and options, forward premium and the time value are not considered part of the hedge. These are
treated as cost of hedge and the changes in fair value attributable to forward premium is recognised in the other
comprehensive income along with the changes in fair value determined to be effective portion of the hedge.
Effective portion of fair value changes of interest rate swaps that are designated as hedges against interest rate
risk arising from floating rate debt are recognised in other comprehensive income.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or
no longer qualifies for hedge accounting. Amounts accumulated in equity are reclassified to the statement of
profit and loss in the periods in which the forecast transactions affect profit or loss or as an adjustment to a non¬
financial item (e.g. inventory) when that item is recognised on the balance sheet. These deferred amounts are

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.

Other short-term financial assets and liabilities are stated at amortised 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
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 period end.

(b) 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 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, 2025:

(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, 2025:
² Others mainly include currencies such as the Euro, Chinese yuan, South african rand, Singapore Dollar,
Thai bahts and Bangladesh taka.

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) and equity before tax by
approximately ^44 crores and ^392 crores for financial assets and financial liabilities respectively for the
year ended March 31, 2024.

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

(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, 2025 and 2024, financial liabilities of ^1,175 crores and ^3,783 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 before tax of ^12 crores and ^38 crores for the year ended March 31, 2025
and 2024, 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 before tax.)

(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, 2025 and 2024
was ^848 crores and ^856 crores, respectively. A 10% change in equity price as of March 31, 2025 and 2024
would result in a pre- tax impact of ^85 crores and ^86 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 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 ^13,395 crores and ^13,378 crores as at March 31, 2025 and 2024, 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, 2025, and March 31, 2024, 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 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 also constantly monitors funding options available in the debt and capital markets with a view to
maintaining financial flexibility.

The table below provides undiscounted contractual maturities of financial liabilities, including estimated interest
payments as at March 31, 2025:

(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. In all cases the Company uses a hedge ratio of 1:1.

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 fair value of derivative financial instruments is as follows:

(v) Commodity Risk

The Company is exposed to commodity price risk arising from the purchase of certain raw materials such as
aluminium, copper, platinum and palladium. This risk is mitigated through the use of derivative contracts and
fixed-price contracts with suppliers. The derivative contracts are not hedge accounted under Ind AS 109 but are
instead measured at fair value through profit or loss.

The (gain)/loss on commodity derivative contracts, recognised in the statement of profit and loss was ^(38)
crores and ^58 crores for the years ended March 31, 2025 and 2024, respectively.

iii. Repayment of borrowings includes repayment of long-term borrowings, proceeds from short-term borrowings,
repayment of short-term borrowings and net change in other short-term borrowings (with maturity up to three
months).

iv. Working capital = Current assets (excluding Assets classified as held for sale) - Current liabilities (excluding current
maturities of Iong term debt, interest accrued on borrowings and liabilities directly associated with assets classified
as held for sale).

v. Raw material consumed includes Cost of materials consumed, Purchases of products for sale and Changes in
inventories of finished goods, work-in-progress and products for sale.

vi. Inventory includes Raw materials and components, Work-in-progress, Finished goods, Stores and spare parts,
Consumable tools and Goods-in-transit - Raw materials and components.

vii. Capital employed includes Shareholders' Equity, non current and current borrowings.

viii. Includes Cost of material consumed and Purchases of products for sale.

49 Other statutory information :

I. The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property.

II. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the
statutory period.

III. The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.

IV. The Company has not advanced or loaned or invested funds to any person(s) or entity(is), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall: (a) directly or indirectly lend or invest in other
persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or (b)
provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries, except as mentioned below:

The Company has advanced or loaned or invested ^847 crores in various tranches, viz. May 22, 2024, June 26, 2024,
July 22, 2024, August 29, 2024, September 24, 2024, September 27, 2024, October 28, 2024, November 25, 2024,
December 26, 2024, January 28, 2025, February 24, 2025, February 27, 2025, March 6, 2025, March 24, 2025 and
March 25, 2025, in its wholly owned subsidiary TML Smart City Mobility Solutions Ltd ("TSCMSL").

Out of the aforementioned amounts TSCMSL advanced or loaned or invested ^192 crores in TML Smart City Solutions
(J&K) Pvt Ltd, its wholly owned subsidiary (ultimate beneficiary) in various tranches viz May 22, 2024 - ^6 crores, June
26, 2024 - ^9 crores, June 28, 2024 - ^2 crores, July 12, 2024 - ^3 crores, July 24, 2024 - ^3 crores, August 30, 2024 - ^3
crores, September 25, 2024 - ^4 crores, October 28, 2024 - ^5 crores, November 25, 2024 - ^20 crores, December 26,

2024 - ^9 crores, January 8, 2025 - ^8 crores, February 25, 2025 - ^30 crores, February 27, 2025 - ^4 crores, March 20,

2025 - ^5 crores and March 25, 2025 - ^81 crores. Further, out of the aforementioned amount TSCMSL advanced or
loaned or invested ^105 crores in TML CV Mobility Solutions Ltd, its fellow subsidiary (ultimate beneficiary) in various
tranches viz September 27, 2024 - ^35 crores, October 28, 2024 - ^26 crores, November 25, 2024 - ^24 crores, January
8, 2025 - ^7 crores, February 27, 2025 - ^7 crores and March 20, 2025 - ^6 crores.

The transactions mentioned above are not in violation of Prevention of Money-Laundering Act, 2002 and are complied
with the provisions of Foreign Exchange Management Act, 1999 and Companies Act, 2013.

V. The Company has not received any fund from any person(s) or entity(is), including foreign entities (Funding Party) with
the understanding (whether recorded in writing or otherwise) that the Company shall: (a) directly or indirectly lend or
invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate
Beneficiaries) or (b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

VI. The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered
or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or
survey or any other relevant provisions of the Income Tax Act, 1961).

VII. The Company is not declared as willful defaulter by any bank or financial institution (as defined under the Companies
Act, 2013) or consortium thereof or other lender in accordance with the guidelines on willful defaulters issued by the
Reserve Bank of India.

VIII. The Company has complied with the number of layers for its holding in downstream companies prescribed under
clause (87) of section 2 of the Companies Act, 2013 read with the Companies (Restriction on number of Layers)
Rules, 2017.

IX. The Company has not revalued any of its Property, Plant and Equipment (including Right-of-Use Assets) during the
years ended March 31, 2025 and March 31, 2024.

50 Other notes :

(i) Details of dues to 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 amounts of principal and interest outstanding during the year are given below :

(ii) 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.

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

(iv) The Board of Directors has, at its meeting held on August 1, 2024, approved (subject to the requisite and other
approvals) a Composite Scheme of Arrangement involving the demerger of its Commercial Vehicle ("CV") business
undertaking into TML Commercial Vehicles Limited (newly incorporated entity) and the merger of Tata Motors
Passenger Vehicles Limited with the existing listed company thereby resulting in two separate listed companies for
the CV and Passenger Vehicle businesses. The Scheme of Arrangement has been filed with Hon'ble National Company
Law Tribunal for approval.

See accompanying notes to financial statements

In terms of our report attached For and on behalf of the Board

For B S R & Co. LLP N CHANDRASEKARAN [DIN: 00121863] P B BALAJI

Chartered Accountants Chairman Group Chief Financial Officer

Firm's Registration No: 101248W/W-100022

VIJAY MATHUR GIRISH WAGH [DIN: 03119361] MALOY KUMAR GUPTA [ACS: 24123]

Partner Executive Director Company Secretary

Membership No.: 046476

UDIN: 25046476BMOWLY1411

Place: Mumbai Place: Mumbai

Date: May 13, 2025 Date: May 13, 2025