1. We have audited the attached Balance Sheet of TATA MOTORS LIMITED
(the Company) as at March 31, 2010, 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 Standards 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 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 (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 as follows:
(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 Profit and Loss Account 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 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
Companies Act, 1956;
(e) 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:
(i) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2010;
(ii) in the case of the Profit and Loss Account, 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 as on March 31, 2010 taken on record by the Board of
Directors, none of the Directors is disqualified as on March 31, 2010
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) The nature of the Companys business activities during the year are
such that clauses (xiii), and (xiv) of paragraph 4 of the Companies
(Auditors Report) Order, 2003 are not applicable to the Company.
(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) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification
which, in our opinion, provides for physical verification of all the
fixed assets at reasonable intervals. According to the information and
explanation given to us, no material discrepancies were noticed on such
verification;
(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, in our opinion, has not affected the going concern
status of the Company.
(iii) In respect of its inventory:
(a) As explained to us, the stock of finished goods (other than a
significant part of the spare parts held for sale) and work-in-progress
in the Companys custody have been physically verified by the
Management as at the end of the financial year, before the year-end or
after the year-end, and in respect of stocks of stores and spares, the
aforesaid spare parts held for sale, and raw materials in the Companys
custody, there is a perpetual inventory system and a substantial
portion of the stocks have been verified during the year. In our
opinion, the frequency of verification is reasonable. In case of
materials and spare parts held for sale lying with the third parties,
certificates confirming stocks have been received in respect of a
substantial portion of the stocks held during the year or at the year-
end;
(b) In our opinion and according to the information and explanation
given to us, the procedures of physical 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 is maintaining proper records of inventory.
The discrepancies noticed on verification between the physical stocks
and the book records were not material having regard to the size of the
operations of the Company and have been properly dealt with in the
books of account.
(iv) In respect of loans, secured or unsecured, granted by the Company
to companies, firms 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 unsecured loans aggregating Rs. 352.11
crores to three parties covered in the register maintained under
Section 301 of the Companies Act, 1956 (including Rs.109.17 crores
granted during the year to two parties). At the year-end, the
outstanding balances of such loans aggregated Rs. 244.94 crores and
maximum amount outstanding during the year was Rs. 296.68 crores.
(b) the rate of interest and other terms and conditions on such loans
are, in our opinion, prima facie not prejudicial to the interest of the
Company having regard to the market yields and the business
relationship with the Company to whom loans have been granted.
(c) The receipts of principal amounts have been as per stipulations
however there have been delays in receipts of interests.
(d) There are no overdue amounts in respect of principal outstanding.
In respect of overdue interest amounts of more than rupees one lakh
remaining outstanding as at the year-end, the Management has taken
reasonable steps for the recovery of the overdue interest amounts.
In respect of loans, secured or unsecured, taken by the Company from
companies, firms or other parties covered in the Register maintained
under Section 301 of the Companies Act, 1956, according to the
information and explanations given to us:
(e) the Company has taken loans aggregating Rs.16.64 crores from six
parties covered in the Register maintained under Section 301 of the
Companies Act, 1956 (including Rs.2.58 crores from five parties during
the year). At the year-end, the outstanding balance of such loans taken
aggregated Rs.16.64 crores and the maximum amount outstanding during
the year was Rs.16.64 crores.
(f) the rate of interest and other terms and conditions of such loans
taken are, in our opinion, prima facie not prejudicial to the interests
of the Company.
(g) The principal amount is not due for repayment and the Company has
been regular in payment of interest.
(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 do not
exist for obtaining comparable quotations, there exists 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 with regard to 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 rupees five lakhs in
respect of any party, and having regard to our comments in para (v)
above, 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 books of account relating to the
manufacture of motor vehicles 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 and are of the opinion that prima facie, the
prescribed accounts and records have been made and maintained. We have,
however, not made a detailed examination of the records with a view to
determining whether they are accurate or complete. To the best of our
knowledge and according to the information and explanations given to
us, the Central Government has not prescribed maintenance of cost
records for any other products of the Company.
(x) According to the information and explanations given to us in
respect of statutory dues:
(a) The Company has generally been regular in depositing with the
appropriate authorities undisputed dues, including provident fund,
investor education and protection fund, employees state insurance,
income-tax, sales tax, wealth tax, service tax, customs duty, e xcise
duty, cess and other material statutory dues applicable to it. With
regard to the contribution under the Employees Deposit Linked
Insurance Scheme, 1976 (the Scheme), we are informed that the Company
has its own Life Cover Scheme, and consequently, an application has
been made seeking an extension of exemption from contribution to the
Scheme, which is awaited. Further, since the Central Government has
till date not prescribed the amount of cess payable under Section 441A
of the Companies Act, 1956, we are not in a position to comment upon
the regularity or otherwise of the Company in depositing the same.
(b) There were no undisputed amounts payable in respect of provident
fund, investor education and protection fund, employees state
insurance, income-tax, wealth tax, service tax, customs duty, excise
duty, cess and other material statutory dues applicable to the Company
that were in arrears as at March 31, 2010 for a period of more than six
months from the date they became payable.
(c) Details of dues of income-tax, sales tax, wealth tax, service tax,
customs duty, excise duty, cess which have not been deposited as on
March 31, 2010 on account of any disputes are given below:
Name of Nature of the Amount Period to which the
the Statute Dues (Rs. in crores) amount relates
Income Tax
Laws Income Tax 0.22 1997-98
Income Tax 118.54 1985-86, 2002-2003 to
2004-05 and 2006-07
Central Excise
Laws Excise Duty
& Service Tax 172.12 1993-94 to 1994-95,
1999-00
and 2002-03 to 2009-10
Excise Duty &
Service Tax 3.92 2003-04 , 2006-07to 2007-08
and 2009-10
Excise Duty &
Service Tax 0.03 2009-10
Sales Tax Laws Sales Tax 64.52 1983-84 to1990-91,1993-94to
1995-96,1997-98 and 2000-01
Sales Tax 126.43 1987-88 to 1992-93,
1995-1996 to
1996-97, 1999-2000 to 2000-01,
2002-03 to2005-06
Sales Tax 0.20 1996-97, 1998-99, 2001-02
Sales Tax 235.91 1997-98 to 2008-09
Sales Tax 11.98 1979-80,1986-87,1991-92 to
1992-93,1994-95,1996-97 to
2000-01, 2003-04 to 2006-07
Sales Tax 0.62 1988-89 to 1989-90,1991-92 to
1992-93, 1995-96,1997-98,
2005-06 to 2006-07
Sales Tax Laws Sales Tax 2.11 1984-85 to1986-87,1988-89,
1990-91,1995-96,1997-98,
1999-2000,2008-09 to 2009-10
Sales Tax 1.84 1986-87,1990-91 to 1991-92,
1993-94,1996-97,1999-2000 to
2001-02
Name of Forum where
the Statue pending
Income Tax Laws Appellate Tribunal
Commissioner
Central Excise Laws Appellate Tribunal
Commissioner (Appeals)
Additional Commissioner
Sales Tax Laws High Court
Appellate Tribunal
Commissioner (Appeals)
Joint Commissioner
Deputy Commissioner
Additional Commissioner
Sales Tax Laws Assistant Commissioner
Trade Tax Officer
(xi) The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses during the financial
year covered by our audit and the immediately preceding financial year.
(xii) 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.
(xiii) Based on our examination of the records and the information and
explanations given to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiv) In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions. Accordingly, the
provisions of clause (xv) of Paragraph 4 of the Companies (Auditors
Report) Order, 2003 are not applicable to the Company.
(xv) 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.
(xvi) In our opinion and according to the information and explanations
given to us and on an overall examination of the Balance Sheet of the
Company, as at March 31, 2010, we report that short term funds of
Rs.6,697.88 crores have been used during the year for long-term
investment.
Further the Company has explained that steps are being taken to augment
long term funds.
(xvii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and companies covered in the register maintained under Section 301 of
the Companies Act, 1956.
(xviii) According to the information and explanations given to us,
during the period covered by our audit report, the Company has issued
44,000 debentures of Rs.10,00,000 each. The Company has created
security in respect of 42,000 debentures and in respect of 2,000
debentures issued in month of March 2010, the Company is in process of
executing the Debenture Trust deed and creation of security.
(xix) According to the information and explanations given to us, during
the year covered by our audit report, the Company has not raised any
money by public issue.
(xx) 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, May 27, 2010.
