1. We have audited the attached Balance Sheet of TATA MOTORS LIMITED
(the Company) as at March 31, 2011, the Proft and Loss Account and
the Cash Flow Statement of the Company for the year ended on that date,
both annexed thereto. T hese fnancial statements are the responsibility
of the Companys Management. Our responsibility is to express an
opinion on these fnancial 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
fnancial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the fnancial statements. An audit also includes
assessing the accounting principles used and the signifcant estimates
made by the Management, as well as evaluating the overall fnancial
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 specifed 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 l aw have
been kept by the Company so far as it appears from our examination of
those books;
(c) the Balance Sheet, the Proft 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 Proft and Loss Account and
the Cash Flow Statement dealt with by this report are in c ompliance
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 afairs of the
Company as at March 31, 2011;
(ii) in the case of the Proft and Loss Account, of the proft of the
Company for the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash fows 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, 2011 taken on record by the Board of
Directors, none of the Directors is disqualifed as on March 31, 2011
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 fxed assets:
(a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fxed assets;
(b) The fxed 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 fxed
assets at reasonable intervals. According to the information and
explanation given to us, no material discrepancies were noticed on such
verifcation;
(c) The fxed assets disposed of during the year, in our opinion, do not
constitute a substantial part of the fxed assets of the Company and
such disposal, in our opinion, has not afected the going concern status
of the Company.
(iii) In respect of its inventory:
(a) As explained to us, the stock of fnished goods (other than a
signifcant part of the spare parts held for sale) and work-in-progress
in the Companys custody have been physically verifed by the Management
as at the end of the fnancial 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 verifed during the year. In our opinion, the frequency
of verifcation is reasonable. In case of materials and spare parts held
for sale lying with the third parties, certifcates confrming 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 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 is maintaining proper records of inventory.
The discrepancies noticed on verifcation 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, 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 unsecured loans aggregating Rs.415.24 Crores
to four parties covered in the register maintained under Section 301 of
the Companies Act, 1956 (including Rs.174.24 Crores granted during the
year to four parties). At the year-end, the outstanding balances of
such loans aggregated Rs.434.41 Crores and maximum amount outstanding
during the year was Rs. 434.41 Crores.
(b) the rate of interest and other terms and conditions of 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, frms 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 l oans aggregating Rs.11.52 Crores from six
parties c overed in the Register maintained under Section 301 of the
Companies Act, 1956 (including Rs.1 Crore from one party during the
year). At the year-end, the outstanding balance of such loans taken
aggregated Rs.11.52 Crores and the maximum amount outstanding during the
year was Rs.18.04 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
fxed 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 fve 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 product 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, excise
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, 2011 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 and cess which have not been deposited as on
March 31, 2011 on account of any disputes are given below:
Name of the
Statute Nature of the Dues Amount
(Rs. in crores)
Income Tax Laws Income Tax 27.94
Income Tax 38.92
Central Excise Laws Excise Duty & Service Tax 0.49
Excise Duty & Service Tax 481.22
Excise Duty & Service Tax 7.96
Excise Duty & Service Tax 0.18
Sales Tax Laws Sales Tax 13.01
Sales Tax 574.86
Sales Tax 21.61
Sales Tax 0.20
Sales Tax 216.79
Sales Tax 16.31
Sales Tax 128.57
Sales Tax 0.07
Sales Tax 1.84
Name of the Period to which
Statue the amount relates Forum where pending
Income Tax Laws 1997-98, 2002-03 and
2005-06 Appellate Tribunal
1984-85, 1985-86, 1986-87,
2004-05, Commissioner
2005-06, 2006-07, 2007-08
and 2008-09
Central Excise Laws 2010-11 High Court
1993-94 to 1994-95,1999-00,
2002-03 Appellate Tribunal
2004-05 to 2010-11
1984-85, 1994-95 to 1995-96,
2003-04, Commissioner (Appeals)
2006-07 to 2007-08 and
2009-10 to 2010-11
2007-08, 2008-09 Additional Commissioner
Sales Tax Laws 1995-96 Supreme Court
1984-85 to 1990-91,1993-94
to 2007-08 High Court
1988-89 to 1989-90, 1992-93,
1995-1996 to1996-97, Appellate Tribunal
1999-2000 to 2000-01,
2004-05 to 2006-07
1996-97, 1998-99, 2001-02 Commissioner (Appeals)
1997-98 to 2008-09 Joint Commissioner
1979-80, 1986-87, 1992-93,
1994-95, 1996-97 Deputy Commissioner
1998-99 to 2000-01,
2003-04 to 2008-09
1988-89 to 1989-90, 1995-96,
1997-98, Additional Commissioner
2005-06 to 2010-11
1986-87, 1988-89, 1990-91,
1995-96, Assistant Commissioner
1997-98, 1999-2000
1986-87, 1990-91 to 1991-92,
1993-94, Trade Tax Officer
1996-97, 1999-2000 to 2001-02
(xi) The Company does not have any accumulated losses at the end of the
fnancial year and has not incurred c ash losses during the fnancial
year covered by our audit and the immediately preceding fnancial 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, fnancial 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 fnancial 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, 2011, we report that funds raised on short
term basis of Rs. 4,797.78 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
5,000 debentures of Rs.10 lakhs each. The Company has created security in
respect of 5,000 debentures issued in the current year and in respect
of 2,000 debentures issued in month of March 2010.
(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 26, 2011
