Tata Chemicals

1.  We have audited the attached Balance Sheet of TATA CHEMICALS
 LIMITED (the Company) as at 31st March, 2009, the Profit and Loss
 Account and the Cash Flow Statement of the Company for the year ended
 on that date, both annexed thereto. These financial statements are the
 responsibility of the Companys Management.  Our responsibility is to
 express an opinion on these financial statements based on our audit.
 
 2.  We conducted our audit in accordance with the auditing standards
 generally accepted in India. Those Stand- ards require that we plan and
 perform the audit to obtain reasonable assurance about whether the
 financial statements are free of material misstatements. An audit
 includes examining, on a test basis, evidence support- ing the amounts
 and the disclosures in the financial statements. An audit also includes
 assessing the account- ing principles used and the significant
 estimates made by the Management, as well as evaluating the overall
 financial statement presentation. We believe that our audit provides a
 reasonable basis for our opinion.
 
 3.  As required by the Companies (Auditors Report) Order, 2003 (CARO)
 issued by the Central Government, in terms of Section 227 (4A) of the
 Companies Act, 1956, we enclose in the Annexure a statement on the
 matters specified in paragraphs 4 and 5 of the said Order.
 
 4.  Further to our comments in the Annexure referred to in paragraph 3
 above, we report that:
 
 (i) we have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purposes of our
 audit;
 
 (ii) in our opinion, proper books of account as required by law have
 been kept by the Company so far as it appears from our examination of
 those books;
 
 (iii) the Balance Sheet, the Profit and Loss Account and the Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account;
 
 (iv) in our opinion, the Balance Sheet, the Profit and Loss Account and
 the Cash Flow Statement dealt with by this report are in compliance
 with the Accounting Standards referred to in Section 211 (3C) of the
 Com- panies Act, 1956;
 
 (v) in our opinion and to the best of our information and according to
 the explanations given to us, the said accounts give the information
 required by the Companies Act, 1956 in the manner so required and give
 a true and fair view in conformity with the accounting principles
 generally accepted in India;
 
 a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2009;
 
 b) in the case of the Profit and Loss Account, of the profit of the
 Company for the year ended on that date and
 
 c) in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 5.  On the basis of the written representations received from the
 directors as on 31 March, 2009 taken on record by the Board of
 Directors, none of the directors is disqualified as on 31st March, 2009
 from being appointed as a director in terms of Section 274 (1) (g) of
 the Companies Act, 1956.
 
 ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our
 report of even date)
 
 (i) Having regard to the nature of the Companys business/activities
 and financial position, sub clauses (xiii) and (xviii) of paragraph 4
 of CARO are not applicable.
 
 (ii) In respect of its fixed assets:
 
 (a) The Company has maintained proper records showing full particulars,
 including quantitative details and situation of fixed assets.
 
 (b) According to the information and explanations given to us, the
 fixed assets were physically verified during the year by the Management
 in accordance with a programme of verification which, in our opinion,
 provides for verification of all the fixed assets at reasonable
 intervals.The discrepancies noticed on physical verification were not
 material and they have been properly dealt with in the books of
 account.
 
 (c) During the year, the Company has not disposed off a substantial
 part of its fixed assets.  (iii) In respect of its inventories:
 
 (a) As explained to us, the stocks of stores and spares, raw materials
 and finished goods have been physi- cally verified during the year by
 the Management at reasonable intervals.
 
 (b) In our opinion and according to the information and explanations
 given to us, the procedures of physi- cal verification of inventories
 followed by the Management were reasonable and adequate in relation to
 the size of the Company and the nature of its business.
 
 (c) In our opinion and according to the information and explanations
 given to us, the Company has main- tained proper records of its
 inventories and no material discrepancies were noticed on physical
 verifica- tion. The discrepancies noticed have been properly dealt with
 in the books of account.
 
 (iv) In respect of the loans, secured and unsecured, granted by the
 Company to companies, firms or other parties covered in the Register
 maintained under Section 301 of the Companies Act, 1956, according to
 the informa- tion and explanations given to us:
 
 (a) During the year, the Company has granted unsecured loans
 aggregating Rs. 65.02 crores (including interest capitalised) to a
 wholly-owned subsidiary. The balance as on 31st March, 2009 and maximum
 amount outstanding during the year, both were Rs. 372.43 crores.
 
 (b) The rate of interest and other terms and conditions on which such
 loans have been granted, are in our opinion prima facie not prejudicial
 to the interests of the Company.
 
 (c) The Company to whom loans have been granted as referred to in (a)
 above, was regular in the payment of principal and interest as per
 agreed terms.
 
 (v) According to information and explanations given to us, the Company
 has not taken any loans, secured or unsecured from companies, firms or
 other parties covered in the Register maintained under Section 301 of
 the Companies Act, 1956.
 
 (vi) In our opinion and according to the information and explanations
 given to us, having regard to the explana- tions that some of the items
 purchased are of special nature and suitable alternative sources do not
 exist for obtaining comparable quotations, there is an adequate
 internal control system commensurate with the size of the Company and
 the nature of its business with regard to the purchases of inventories
 and fixed assets and for the sale of goods and services. During the
 course of our audit, we have not observed any major weakness in such
 internal control system.
 
 (vii) To the best of our knowledge and belief and according to the
 information and explanations given to us, we are of the opinion that
 during the year there are no contracts and arrangements the particulars
 of which needed to be entered into the Register maintained under
 Section 301 of the Companies Act, 1956.
 
 (viii) According to the information and explanations given to us, there
 are no deposit from the public in terms of section 58A of the companies
 Act, 1956.
 
 (ix) In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 (x) We have broadly reviewed the books of account maintained by the
 Company pursuant to the rules made by the Central Government for the
 Maintenance of Cost records under Section 209(1 )(d) of the Companies
 Act, 1956 in respect of certain products manufactured by the Company
 viz., Cement, Caustic Chlorine, Soda Ash, Ammonia, Urea, Diammonium
 Phosphate, Nitrogen Phosphorous Potash, Single Super Phosphate and So-
 dium Tripolyphosphate and are of the opinion that prima facie the
 prescribed accounts and records have been maintained. We have, however,
 not made a detailed examination of records with a view to determining
 whether they are accurate and complete. To the best of our knowledge
 and according to the information and explanations given to us, the
 Central Government has not prescribed the maintenance of cost records
 for any other product of the Company.
 
 (xi) According to the information and explanations given to us, in
 respect of statutory dues:
 
 (a) The Company has been generally regular in depositing with the
 appropriate authorities undisputed statutory dues including Provident
 Fund, Investor Education and Protection Fund, Employees State In-
 surance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty,
 Excise Duty, Cess and other mate- rial statutory dues, applicable to
 it, except to the extent indicated in (b) below.
 
 (b) There were no undisputed amount outstanding as at 31st March, 2009
 for a period of more than six months from the date they became payable
 except income tax (tax deducted at source) amounting to Rs. 4,02,373
 which has been paid subsequently.
 
 (c) Details of Sales Tax, Income Tax, Customs Duty and Excise Duty
 which have not been deposited with the concerned authorities as at 31st
 March, 2009 on account of dispute are given below:
 
 Particulars                    Financial years to
                                which the matter 
                                pertains_
 
 Sales Tax                      2000-01_
 (Central and State)            1991-92, 1994-99
 and Value Added Tax            and 2000-03_
                                1995-99 and 2001-05
 Custom Duty                    1991-92_
                                2001-04_
                                1987-88, 1992-93,
                                2001-02
 Excise Duty                    1974-80, 1981-85 and
                                1994-2000_
                                1985-1988, 1996-97
                                1994-2000, 2004-05
                                and 2006-08
 
 Forum where                    Amount
 dispute is pending             (Rs.in crores)
 
 High Court                        2.04
 Tribunal                         15.96
 Appellate authority               5.95
 upto Commissioners
 level
 Supreme Court                     3.96
 Tribuna                          l6.98
 Appellate authority               0.19
 upto Commissioners
 level
 Supreme Court                     0.31
 Tribunal                          0.05
 Appellate authority              68.27
 upto Commissioners
 level
 
 (xii) The Company does not have accumulated losses and has not incurred
 cash losses during the financial year and in the immediately preceding
 financial year.
 
 (xiii) According to the information and explanations given to us, the
 Company has not defaulted in repayment of dues to banks and financial
 institutions.
 
 (xiv) According to the information and explanations given to us, the
 Company has not granted loans and ad- vances on the basis of security
 by way of pledge of shares, debentures and other securities.
 
 (xv) According to the information and explanations given to us, the
 Company is not dealing or trading in shares, securities, debentures and
 other investments, except for mutual fund units, in which temporary
 surplus funds are invested. In our opinion, proper records have been
 maintained of the transactions and contracts and timely entries have
 been made therein. The units of mutual funds have been held by the
 Company in its own name.
 
 (xvi) In our opinion and according to the information and explanations
 given to us, the terms and conditions of the guarantees given by the
 Company for the loans taken by others from financial institutions are
 not prima facie prejudicial to the interests of the Company.
 
 (xvii) In our opinion and according to the information and explanations
 given to us, the term loans availed by the Company were prima facie
 applied by the Company during the year for the purposes for which they
 were obtained.
 
 (xviii) In our opinion and according to the information and
 explanations given to us, and on an overall examination of the Balance
 Sheet, we report that no funds raised on short-term basis have prima
 facie been utilised during the year for long-term investment.
 
 (xix) According to the information and explanations given to us and the
 records examined by us, securities have been created in respect of the
 debentures issued.
 
 (xx) The Company has not raised any money by way of a public issue
 during the year.
 
 (xxi) To the best of our knowledge and according to the information and
 explanations given to us, no fraud by or on the Company has been
 noticed or reported during the year.
 
 
 For DELOITTE HASKINS & SELLS                      For N. M. RAIJI & CO.
 Chartered Accountants                            Chartered Accountants
 
      NALIN M. SHAH                                    J.M.GANDHI
      Partner                                            Partner
  Membership No. 15860                            Membership No. 37924
 
 MUMBAI, 28th May, 2009