Tata Motors AR

Statutory Reports

Corporate Overview

Financial Statements

F-80

(Consolidated)

72nd Annual Report 2016-17

Background and operations

Tata Motors Limited and its subsidiaries, collectively referred to as (“the Company” or “Tata Motors”), designs, manufactures and sells a wide range

of automotive vehicles. The Company provides financing for the vehicles sold by dealers of the Company in certain markets. The Company also

manufactures engines for industrial and marine applications, aggregates such as axles and transmissions for commercial vehicles and factory

automation equipment, and provides information technology services.

Tata Motors Limited is a public limited Company incorporated and domiciled in India and has its registered office in Mumbai, India. As at March 31,

2017, Tata Sons Limited, together with its subsidiaries owns 31.32% of the Ordinary shares and 0.09% of ‘A’ Ordinary shares of the Company, and has

the ability to significantly influence the Company’s operation.

The Company’s subsidiaries include the Jaguar Land Rover business (referred to as JLR or Jaguar Land Rover).

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

Significant accounting policies

Statement of compliance

In accordance with the notification issued by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (referred

to as “Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from April 1, 2016. Previous period figures

have been restated to Ind AS. In accordance with Ind AS 101 First-time Adoption of Indian Accounting Standard, the Company has presented a

reconciliation from the presentation of financial statements under Accounting Standards notified under the Companies (Accounting Standards)

Rules, 2006 (“Previous GAAP”) to Ind AS of Shareholders’equity as at March 31, 2016 and April 1, 2015 and of the total comprehensive income for

the year ended March 31, 2016.

These financial statements have been prepared in accordance with Ind AS as notified under the Companies (Indian Accounting Standards) Rules,

2015 read with Section 133 of the Companies Act, 2013 (“the Act”).

Basis of preparation

The consolidated financial statements have been prepared on historical cost basis except for certain financial instruments measured at fair value at the

end of each reporting period as explained in the accounting policies below.

Basis of consolidation

Subsidiaries

The consolidated financial statements include Tata Motors Limited and its subsidiaries. Subsidiaries are entities controlled by the Company.

Control exists when the Company (a) has power over the investee, (b) it is exposed, or has rights, to variable returns from its involvement with

the investee and (c) has the ability to affect those returns through its power over the investee. The Company reassesses whether or not it controls

an investee if facts and circumstances indicate that there are changes to one or more of the three elements listed above. In assessing control,

potential voting rights that currently are exercisable are taken into account. The results of subsidiaries acquired or disposed off during the year are

included in the consolidated financial statements from the effective date of acquisition and up to the effective date of disposal, as appropriate.

Inter-company transactions and balances including unrealized profits are eliminated in full on consolidation.

Non-controlling interests in the net assets (excluding goodwill) of consolidated subsidiaries are identified separately from the Company’s equity.

The interest of non-controlling shareholders may be initially measured either at fair value or at the non-controlling interests’ proportionate

share of the fair value of the acquiree’s identifiable net assets. The choice of measurement basis is made on an acquisition-by-acquisition basis.

Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-

controlling interests’ share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if it

results in the non-controlling interest having a deficit balance.

Changes in the Company’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying

amount of the Company’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the

subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid

or received is recognized directly in equity and attributed to owners of the Company.

When the Company loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair

value of consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill),

and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognized in other comprehensive income in relation to

the subsidiary are accounted for (i.e., reclassified to profit or loss) in the same manner as would be required if the relevant assets or liabilities were

disposed off. The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on

initial recognition for subsequent accounting under Ind AS 109 Financial Instruments: Recognition and Measurement or, when applicable, the

cost on initial recognition of an investment in an associate or jointly controlled entity.

NOTES FORMING PART OF CONSOLIDATED FINANCIAL STATEMENTS