1. We have audited the attached Balance Sheet of TATA STEEL LIMITED
(the Company) as at 31 March, 2012, the Statement of Profit and Loss
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 Company''s 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 Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are firee of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also includes
assessing the accounting 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 (Auditor''s 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:
(a) we have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
(b) 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
(c) the Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this report are in agreement with the
books of account;
(d) in our opinion, the Balance Sheet, the Statement of Profit and Loss
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
Companies Act, 1956;
(e) in our opinion and to the best of our information and according to
the explanations given to us, the said financial statements 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:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March, 2012;
(ii) in the case of the Statement of Profit and Loss, of the Profit of
the Company for the year ended on that date and
(iii) 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 and taken on record by the Board of Directors, none of the
Directors is disqualified as on 31 March, 2012 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 Company''s
business/activities/result, clauses (x), (xii), (xiii) and (xiv) 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 the fixed assets.
(b) Some of the fixed assets were physically verifed during the year by
the Management in accordance with a regular programme of verifcation
which, in our opinion, provides for physical verifcation of all the
fixed assets at reasonable intervals. According to the information and
explanations given to us, no material discrepancies were noticed on
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company and
such disposal has, in our opinion, not affected the going concern
status of the Company.
(iii) In respect of its inventory:
(a) As explained to us, the inventories of finished and semi-finished
goods and raw materials at Works, Mines and Collieries were physically
verifed during the year by the Management. In respect to stores and
spare parts and stocks at stockyards and with consignment/conversion
agents, the Company has a programme of verifcation of stocks over a
three year period. In our opinion, having regard to the nature and
location of the stocks, the firequency of verifcation is reasonable. In
case of materials lying with third parties, Certificates confirming
stocks have been received for stocks held.
(b) In our opinion and according to the information and explanation
given to us, the procedures of physical verifcation 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 maintained proper records of its
inventories and no material discrepancies were noticed on physical
(iv) In respect of loans, secured or unsecured, granted by the Company
to companies, frms or other parties covered in the Register under
Section 301 of the Companies Act, 1956, according to the information
and explanations given to us:
(a) The Company has granted loans aggregating Rs.167.22 crores to one
party during the year. At the year-end, there is no balance outstanding
and the maximum amount involved during the year was Rs. 3,720.38
(b) The rate of interest and other terms and conditions of such loans
are, in our opinion, prima facie not prejudicial to the interests of
(c) The receipts of principal amounts and interest have been regular/as
(d) There were no loans outstanding as at the year-end, and therefore
clause (iii) (d) of paragraph 4 of CARO is not applicable.
The Company has not taken any loans, secured or unsecured, from
companies, frms or other parties covered in the Register maintained
under Section 301 of the Companies Act, 1956. Accordingly, clauses
(iii) (e) to (iii) (g) of paragraph 4 of CARO are not applicable.
(v) In our opinion and according to the information and explanations
given to us, having regard to the explanations that some of the items
purchased are of special nature and suitable alternative sources are
not readily available 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 purchases of
inventory and fixed assets and the sale of goods and services. During
the course of our audit, we have not observed any major weakness in
such internal control system.
(vi) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to Section
301 that needed to be entered in the Register maintained under the said
Section have been so entered.
(b) Where each of such transaction is in excess of Rs.5 lakhs in
respect of any party, the transactions have been made at prices which
are prima facie reasonable having regard to the prevailing market
prices at the relevant time.
(vii) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Sections
58A and 58AA or any other relevant provisions of the Companies Act,
1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard
to the deposits accepted from the public. According to the information
and explanations given to us, no order has been passed by the Company
Law Board or the National Company Law Tribunal or the Reserve Bank of
India or any Court or any other Tribunal.
(viii) In our opinion, the Company has an adequate internal audit
system commensurate with the size and the nature of its business.
(ix) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209(1)(d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the records with a view to determining
whether they are accurate or complete.
(x) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
dues, including Provident Fund, Investor Education and Protection Fund,
Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise
Duty, Cess and other material statutory dues applicable to it with the
appropriate authorities. We are informed that the Company intends to
obtain exemption from operations of Employees'' State Insurance Act at
all locations and necessary steps have been taken by the Company. We
are also informed that actions taken by the authorities at some
locations to bring the employees of the Company under the Employees''
State Insurance Scheme has been contested by the Company and full
payment has not been made of the contributions demanded.
(b) There were no undisputed amounts payable in respect of Income-tax,
Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory
dues in arrears as at 31 March, 2012 for a period of more than six
months from the date they became payable, except for collection of
sales tax which we are informed are refundable to customers because
they have been collected in excess or which have been collected pending
receipt of necessary Certificates from the customers.
(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
Custom Duty, Excise Duty and Cess which have not been deposited as on
31 March, 2012 on account of disputes are given below:
Name of the
Statute Forum where
Dispute Period to which the
amount relates Amount
dues) is pending involved
Supreme Court 1990-91, 1993-94 9.68
Customs Act High Court 2002-03 0.03
Commissioner 1993-94 3.92
Supreme Court 2004-05 235.48
High Court 1988-90, 2000-01, 2003-09 14.54
1990-91, 1992-93, 1996-1997,
Commissioner 1988-90, 1993-94 to 2011-2012 28.53
Commissioner 1985-87, 1998-99 0.18
Commissioner 1982-84 to 2005-06 0.85
Supreme Court 2006 to 2012 25.73
1973-74, 1991-93, 1994-97,
High Court 1999-2000 to 2005-06,
2007-08 to 105.70
1980-82, 1984-85, 1987-88,
Sales Tax 1997-2008
Commissioner 1983-95, 1998-99 to 2008-09 245.99
1975-76, 1977-80, 1981-86,
1995-96 to 2008-09
2000-01 to 2009-12
Royalty, High Court 1956-94, 1999-2002, 2003-06,
(xi) In our opinion and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks, financial institutions and debenture holders.
(xii) 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 loans taken by others from banks and financial institutions
are not prima facie prejudicial to the interests of the Company.
(xiii) In our opinion and according to the information and explanations
given to us, the term loans have been applied for the purposes for
which they were obtained, other than temporary deployment pending
(xiv) 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 funds raised on short-term basis have not been used during
the year for long- term investment.
(xv) According to the information and explanations given to us, the
Company has not made preferential allotment of shares to parties and
companies covered in the Register maintained under Section 301 of the
Companies Act, 1956.
(xvi) According to the information and explanations given to us, during
the period covered by our audit report, the Company had issued
unsecured debentures which did not require creation of any charge or
(xvii) The Management has disclosed the end use of money raised by
public issue during the previous year, in Note 2 to the financial
statements and we have verifed the same.
(xviii) To the best of our knowledge and according to the information
and explanations given to us, no fraud by the Company and no material
fraud on the Company has been noticed or reported during the year.
For DELOITTE HASKINS & SELLS
(Registration No. 117366W)
(Membership No. 71387)
MUMBAI, 18 May, 2012