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
 audit;
 
 (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
 those books;
 
 (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
 such verifcation.
 
 (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
 verifcation.
 
 (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
 crores.
 
 (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
 the Company.
 
 (c) The receipts of principal amounts and interest have been regular/as
 per stipulations.
 
 (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
 (Nature of 
 dues)         is pending                                  involved
                                                           (Rs. in 
                                                           crores)
 
              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,
              Tribunal                                     271.56
 
                             1998-2012
 Central 
 Excise Act
              Commissioner   1988-90, 1993-94 to 2011-2012  28.53
 
              Deputy 
              Commissioner   1985-87, 1998-99                0.18
 
              Assistant 
              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
                             2009-2010
 
                             1980-82, 1984-85, 1987-88, 
                             1989-96,
              Tribunal                                      59.93
 Sales Tax                   1997-2008
 
              Commissioner   1983-95, 1998-99 to 2008-09   245.99
 
                             1975-76, 1977-80, 1981-86,
              Deputy 
              Commissioner                                  62.83
 
                             1995-96 to 2008-09
                             1973-74,1980-81,1983-84 
                             to 1997-99,
              Assistant 
              Commissioner                                  52.22
                             2000-01 to 2009-12
 
 Cess on 
 Royalty,     High Court     1956-94, 1999-2002, 2003-06,
                             2007-2011                       7.66
 education, 
 welfare etc.
 
 (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
 application.
 
 (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
 security.
 
 (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 
 Chartered Accountants 
 
 (Registration No. 117366W)
 
 N. VENKATRAM
 
 Partner
 
 (Membership No. 71387)
 
 MUMBAI, 18 May, 2012