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 arrangements 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.
For the purposes of Income-tax, the current tax expense of the Company (excluding its Joint Operation which has been
considered for the full year) is considered basis nine months period effective tax rate, starting from July 1, 2025 as there
was nil operations prior to the demerger.
The Organisation for Economic Co-operation and Development (OECD) has published the model rules for global
minimum tax (pillar two model rules). As per the provisions of Pillar Two legislation, the Group's Ultimate parent entity
(UPE) has consolidated revenues exceeding the threshold prescribed under the OECD framework. Pillar Two legislation
has been enacted, or substantively enacted, in certain jurisdictions where the Group operates. Based on the current
assessment of the financial statement of constituent entities, there is no impact from the application of the Pillar Two
rules on its financial statements.
Note - Government incentives includes J80 crores as at March 31, 2026 (H148 crores as at March 31, 2025 (Refer note 30
(c) below) 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 the
amount equivalent to 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.
Revenue is recognised on a bill-and-hold basis where vehicles, for example, are sold to the customer but are
retained in the Company's possession at a vehicle holding compound on behalf of the customer ahead of being
physically transferred to them at a future time. In such arrangements it is ensured that the customer has obtained
the ultimate control of the product.
The consideration received in respect of transport arrangements for delivering of vehicles to the customers are
recognised net of their costs 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 is 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 Company recognizes compensation expenses 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 the
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
Tata Motors Limited Share-based Long Term Incentive Scheme (TMLSLTI Scheme)
The Scheme has been formulated pursuant to clause 9 of the Scheme of Arrangement, with respect to PSUs granted
under "Demerged Company Incentive Schemes" (as defined hereinafter) to the Eligible Employees, consequent
upon the Demerger.
Each such Eligible Employee (irrespective of whether they are Remaining Employee or Transfer-ring Employee, as the
case may be) under the Demerged Company Incentive Schemes (i.e. Share-based Long Term Incentive Scheme 2021 and
2024) and for every One Demerged Company Performance Shares Units ("PSUs") outstanding as on the Record date in
the Demerged Company, such eligible Remaining Employee and Transferring Employee shall be granted and/or vested
One Resulting Company PSUs (whether vested or not) under the TMLSLTI Scheme, on the terms and conditions which
would be similar to the Demerged Company Incentive Schemes.
(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).
(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.
The post-retirement medicare scheme is applicable to employees existing as at December 31, 2023.
(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.
Past service cost arising from plan amendments or curtailments is recognized as an expense in the Statement
of Profit and Loss in the period in which the amendment or curtailment occurs. The amount is measured
as the change in the present value of the defined benefit obligation for employee service rendered in prior
periods and is determined based on actuarial valuation. Past service cost is recognized immediately and
is not deferred.
(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.
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.
Notes:
i) Fair value loss on certain quoted investments reduced the net assets value of TMF Holdings Ltd. This has resulted in
provision for impairment of investment in subsidiary of J2,313 crores for the year ended March 31, 2026.
ii) These are stamp duty amounts estimated to be payable to various local authorities to effect transfer of registration of
land acquired under the Scheme (Refer note 50)
iii) On November 21, 2025, the Government of India notified the four Labour Codes - the Code on Wages, 2019, the
Industrial Relations Code,2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working
Conditions Code, 2020 - consolidating 29 existing labour laws. The Ministry of Labour & Employment published draft
Central Rules and FAQs to enable assessment of the financial impact due to changes in regulations. The Company
has evaluated and disclosed the incremental impact of these changes using the best information currently available,
consistent with the guidance provided by the Institute of Chartered Accountants of India. Considering the materiality
and regulatory-driven, non-recurring nature of this impact, the Company has presented such incremental impact as
"Statutory impact of new Labour Codes" in the statement of profit and loss for the year ended March 31, 2026. The
incremental impact consisting of gratuity of J259 crores and long-term compensated absences of J104 crores primarily
arises due to change in wage definition. The Company continues to monitor the finalisation of Central / State Rules and
clarifications from the Government on other aspects of the Labour Code and would provide appropriate accounting
effect on the basis of such developments as needed.
iv) As there was no positive movement towards the conclusion of the surrender process of the pension fund, Tata Motors
Limited ("the Company" or "TML") filed a Writ Petition with Hon'ble Delhi High Court ("Court") for seeking directions to
EPFO to immediately start administering TML's Pension Fund. 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 ("Minutes") were filed in the Court on May 1, 2025. In
compliance with the Minutes, the Company through its Pension Trust has transferred to EPFO the pension fund liability
as per valuation done by EPFO as of March 31, 2024, amounting to H1,175 crores. The Government of India vide its
letter dated June 30, 2025, has conveyed the grant of provisional sanction to the Company to comply as an un-exempted
establishment w.e.f. July 1, 2025. The Company has started depositing the monthly pension contributions for the month
of July 2025 and onwards in the statutory pension fund EPFO. Further, the facility on the Unified Portal of EPFO has
been provided to the Company for the migration of members' data to EPFO's database. Accordingly, the process of data
upload is going on.
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 J18 crores have been made for pension on
higher salary during the year ended March 31,2026. EPFO, however, redirected a few of such Joint Applications to the
Company's Pension Trust. The trade unions have also filed Writ Petition for expediting the transfer of pension fund
corpus and accepting the Joint Applications of the employees.
An agreement was reached with EPFO in April 2025, and in compliance whereof (i) the Company transferred H1,175
crores to EPFO; (ii) Ministry granted provisional sanction to Company to comply as un-exempted establishment w.e.f.
July 1, 2025, (iii) the Company submitted the undertaking and Bank guarantee of H239 crores with EPFO; and (iv) the
Company started data migration to EPFO's portal. EPFO will complete the compliance audit, third party audit and actuarial
valuation. Further steps will be taken by the EPFO for publication of the notification for cancellation of exemption.
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, 2026, there are contingent liabilities towards matters and/or disputes pending in appeal amounting to J136
crores (H165 crores as at March 31, 2025).
Customs, Excise Duty and Service Tax
As at March 31, 2026, there are pending litigation for various matters relating to customs, excise duty and service taxes
involving demands, including interest and penalties, of J138 crores (H136 crores as at March 31, 2025). These demands
challenged the classification adopted on certain goods by the Company and denied the Company's claims of CENVAT credit
on inward supplies.
Sales Tax/VAT
The total sales tax demands (including interest and penalty), that are being contested by the Company amount to J237 crores
as at March 31, 2026 (H248 crores as at March 31, 2025). The details of the demands for more than H100 crores are as follows:
The Sales Tax Authorities have raised demand of J101 crores as at March 31, 2026 (H123 crores as at March 31, 2025) 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.
Other Taxes and Dues
Other amounts for which the Company may contingently be liable aggregate to J621 crores as at March 31, 2026 (H581 crores
as at March 31, 2025). Following are the cases involving more than H100 crores.
As at March 31, 2026, property tax on vacant land amounting to J140 crores (H119 crores as at March 31, 2025) has been
demanded by the local municipal authorities in respect of vacant land of the Company in its plant and its residential land at
Pimpri. The initial demand was 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, 2026, the Company has contingent liability of J435 crores (H416 crores as at March 31, 2025) 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(iv) for pension.
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 J659 crores as at March 31, 2026 (H770 crores as at
March 31, 2025), 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 J84 crores as at March 31, 2026 (H128 crores as at
March 31, 2025), which are yet to be executed.
40 Earnings per Share ("EPS")
(a) Accounting policy
Basic earnings per share has been computed by dividing net income by the weighted average number of shares
outstanding during the year. Partly paid up shares are included as fully paid equivalents according to the fraction paid
up. Diluted earnings per share has been computed using the weighted average number of shares and dilutive potential
shares, except where the result would be antidilutive.
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 22 and 23 to the financial statements.
Equity comprises all components excluding (profit)/loss on cash flow hedges.
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 profit and loss: Financial assets are measured at fair value through profit and
loss (FVTPL) 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 derecognised 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 ultimately recognised in profit or loss as
the hedged item affects profit or loss (for example through cost of goods sold). For forecast transactions, any cumulative
gain or loss on the hedging instrument recognised in equity is retained there until the forecast transaction occurs.
If the forecast transaction is no longer expected to occur, the net cumulative gain or loss recognised in equity is
immediately transferred to the statement of Profit and Loss for the year.
(b) 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.
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. We
have used Comparable Companies Quoted Multiple Method to determine the fair value for the investments.
There has been no transfers between level 1, level 2 and level 3 for the year/period ended March 31, 2026 and
March 31, 2025.
The investments includes certain unquoted equity instruments which are held for medium or long-term strategic
purpose and are not held for trading. Upon the application of Ind AS 109, the Company has chosen to designate these
investments in equity instruments as at FVTOCI as the management believe that this provides a more meaningful
presentation for medium or long-term strategic investments, than reflecting changes in fair value in profit or loss.
Derivatives are fair valued using market observable rates and published prices together with forecast cash flow
information where applicable.
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, 2026:
(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, 2026:
1.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 increase/decrease in the Company's net profit/(loss) and equity before tax by
approximately J45 crores and J32 crores for financial assets and financial liabilities respectively for the year
ended March 31, 2026.
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 increase/decrease in the Company's net profit/(loss) and equity before tax by
approximately H35 crores and H144 crores for financial assets and financial liabilities respectively for the year
ended March 31, 2025.
(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, 2026 and 2025, financial liabilities of J Nil and H1,085 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 J Nil and H11 crores for the year ended March 31, 2026 and
2025, 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, 2026 is
J 132 crores (Listed on October 13, 2025). A 10% change in equity price as of March 31, 2026 would result in
a pre- tax impact of J 13 crores.
(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 is J14,561 crores and H12,073 crores as at March 31, 2026 and 2025, 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, 2026, and March 31, 2025, that defaults in payment
obligations will occur.
(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. Furthermore, 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.
As described in Note 24, the Company also participates in a supplier finance arrangement with the principal purpose
of facilitating efficient payment processing of supplier invoices and providing the willing suppliers early payment
terms compared with the related invoice payment due date. The arrangement allows the Group to centralise
payments of trade payables to the bank rather than paying each supplier individually.
From the Company's perspective, the arrangement does not significantly extend payment terms beyond the normal
terms agreed with other suppliers that are not participating; however, the arrangement does provide participating
suppliers with the benefit of early payment. Additionally, the Company does not incur any additional interest
towards the bank on the amounts due to the suppliers. The Company therefore includes the amounts subject to
the arrangement within trade payables because the nature and function of these payables remains the same as
those of other trade payables (see Note 24).
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, 2026:
(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 (gain)/loss due to fluctuation in foreign currency exchange rates on derivative contracts, recognised in the
income statement was J(29) crores and H(19) crores for the years ended March 31, 2026 and 2025, respectively.
(v) Commodity Price 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 J69 crores
and H4 crores for the years ended March 31, 2026 and from June 23, 2024 to March 31, 2025, respectively.
43 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.
Key management personnel:
As mentioned in the note 50, the CV undertaking was transferred to the Company w.e.f. October 1, 2025 and accordingly
Mr. Girish Wagh has been appointed as Managing Director and Chief Executive Officer and Mr. Ramanan GV has been
appointed as Chief Financial Officer w.e.f. October 1, 2025.
i. Total debts includes non current and current borrowings
ii. Equity = Equity share capital Other equity
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.
ix. Ratios for the comparable period are for approx. 9 months (June 23, 2024 to March 31, 2025), and hence, not strictly
comparable with the ratios for the year ended March 31, 2026.
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 H422 crores in various tranches, viz. April 30, 2025, May 6, 2025, May
29, 2025, June 20, 2025, June 26, 2025, July 21, 2025, July 30, 2025, August 28, 2025, September 24, 2025, October 16,
2025, November 24, 2025, December 18, 2025, January 21, 2026 and February 25, 2026, in its wholly owned subsidiary
TML Smart City Mobility Solutions Ltd ("TSCMSL").
Out of the aforementioned amounts TSCMSL advanced or loaned or invested H112 crores in TML Smart City Mobility
Solutions (J&K) Pvt. Ltd., its wholly owned subsidiary (ultimate beneficiary) in various tranches viz April 30, 2025 - H2
crores, May 9, 2025 - H3 crores, May 30, 2025 - H7 crores, June 23, 2025 - H8 crores, June 26, 2025 - H4 crores, July 4, 2025
- H6 crores, July 31, 2025 - H35 crores, August 31, 2025 - H4 crores, September 24, 2025 - H6 crores, October 17, 2025 - H7
crores, November 25, 2025 - H10 crores, December 19, 2025 - H9 crores, January 21, 2026 - H7 crores and February 26,
2026 - H4 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
year/period ended March 31, 2026 and March 31, 2025.
50 Composite Scheme of Arrangement :
A) The Board of Directors has, at its meeting held on August 1, 2024, approved a Composite Scheme of Arrangement
amongst Tata Motors Passenger Vehicles Ltd (Formerly Tata Motors Ltd) ("TMPVL"), Tata Motors Ltd (Formerly TML
Commercial Vehicles Ltd) (the "Company") and Tata Motors Passenger Vehicles Ltd and their respective shareholders
under Section 230-232 of the Companies Act, 2013 which inter alia provides for:
- demerger, transfer and vesting of the commercial vehicles business of TMPVL (Formerly Tata Motors Ltd) along
with related investments ("demerged undertaking") to the Company on a going concern basis; and
- amalgamation of Tata Motors Passenger Vehicles Ltd with TMPVL (Formerly Tata Motors Ltd) with an objective of
consolidating the passenger vehicles business.
The Scheme has received approval from NCLT and is effective from October 1, 2025, with an appointed date of July 1, 2025.
B) The Company has given effect to the Scheme in accordance with the accounting treatment specified in the Scheme and
as per applicable accounting standards (Ind AS) as under:
- Recorded the assets, liabilities, general reserve, retained earnings and equity instruments through Other
Comprehensive Income, Cost of Hedging Reserve and Hedging Reserve (forming part of "Other components of
Equity" in the Statement of Changes in Equity) at their respective carrying values of the demerged undertaking, as
appearing in the books of the TMPVL,
- Assets and liabilities were determined using the carrying value of specifically identifiable items transferred and
an asset ratio for non specifically identifiable items. The ratio equals identifiable assets transferred divided by
identifiable assets retained,
a) Retained earnings is primarily attributable to the profits generated by the Commercial Vehicle business during the
period from April 1, 2021 to June 30, 2025 and hence have been considered as part of Retained earnings to be
transferred to the Company pursuant to the Scheme.
b) Deferred tax assets on Unabsorbed Depreciation and Brought Forward Losses, as per the books of accounts of the
Demerged entity as at March 31, 2025 have been allocated to the Company in accordance with the asset ratio.
c) The General Reserve reflected in the financial statements has been allocated based on the assets ratio as
defined in the scheme.
d) The capital reserve is the difference between book value of the assets and liabilities of the Demerged Undertaking
after allocating the amount towards the face value of the Equity shares issued and other appropriate reserves.
D) The Company was incorporated on June 23, 2024 and the Financial Statements of the Company is restated from July 1,
2024 to give the effect to the above-mentioned Composite Scheme of Arrangement. The figures for the comparative
period are represented pursuant to the scheme and are unaudited. Further, the comparative figures for the period from
June 23, 2024 to March 31, 2025 are not comparable to the figures for year ended March 31, 2026.
51 Other notes:
(i) Current period figures are shown in bold prints.
(ii) 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 :
(iii) The equity shares of the company got listed and admitted to trading on BSE Limited ("BSE") and National Stock Exchange
of India Limited ("NSE") on November 12, 2025.
(iv) On July 30, 2025, the Company and Iveco Group N.V. ("Iveco"), announced reaching an agreement to create a commercial
vehicles group through all-cash voluntary tender offer for Iveco common shares. The completion of the offer, expected to
be completed during 2nd quarter of FY27, is conditional, inter alia, on regulatory approvals and certain other conditions.
The offer represents a total consideration of approximately H41,691 crores (€3.8 billion) as at March 31, 2026 for Iveco,
excluding Iveco's defence business and the net proceeds from the defence business separation. The Company is in
process of taking the necessary regulatory approval.
The Company has given a letter of comfort and provided guarantees to MUFG Bank Limited, Hong Kong (acting as a
facility agent for the lenders) for H41,691 crores (€3.8 billion) as on March 31, 2026 against credit facility given to TML
CV Holdings BV, towards acquisition of IVECO Group N.V. , after requisite approvals for the same.
(v) Extended Producer Responsibility ("EPR") for End of Life of Vehicles for OEMs was notified in January 2025, w.e.f. April 1,
2025. EPR calls for OEMs to buy certificates from Registered Vehicle Scrapping Facility ("RVSFs") equivalent to 8% for the
first 5 years and goes up to 18% by 2039 of steel used in its vehicles 15 years back in case of Commercial Vehicles. Central
Pollution Control Board ("CPCB") is in the process of giving clarity of the EPR policy including a) Cost of the certificate b)
Clear methodology for calculating steel content/liability targets for OEMs c) Process for transaction between OEMs and
RVSFs and thus the cost of meeting the obligations under EPR cannot be reliably estimated as at March 31, 2026.
Further, Extended Producer Responsibility ("EPR") for waste batteries management was notified in August 2022
as amended from time to time. Said rules call for Producers, as defined under the rules, for environmental sound
management of waste batteries. Company shall be able to meet the obligations under the said rules either through its
suppliers or through other facilities/arrangements.
(vi) The Board of Directors has, at its meeting held on January 29, 2026, approved (subject to other requisite approvals) a
Composite Scheme of Amalgamation involving the merger of the wholly owned subsidiary TMF Holdings Limited and
wholly owned step down subsidiary TMF Business Services Limited with Tata Motors Limited (Formerly TML Commercial
Vehicles Limited). The Company is in process of taking the necessary regulatory approval.
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