TO THE MEMBERS OF
TATA MOTORS LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of TATA MOTORS LIMITED("the Company"), which comprise the Balance Sheet as at March 31, 2014, theStatement of Profit and Loss and the Cash Flow Statement for the year then ended, and asummary of the significant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
The Companys Management is responsible for the preparation of these financialstatements that give a true and fair view of the financial position, financial performanceand cash flows of the Company in accordance with the Accounting Standards notified underthe Companies Act, 1956 ("the Act") (which continue to be applicable in respectof Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 datedSeptember 13, 2013 of the Ministry of Corporate Affairs) and in accordance with theaccounting principles generally accepted in India. This responsibility includes thedesign, implementation and maintenance of internal control relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditors judgment, including the assessment of the risks of material misstatement ofthe financial statements, whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the Companys preparation and fairpresentation of the financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the Companys internal control. An audit also includes evaluatingthe appropriateness of the accounting policies used and the reasonableness of theaccounting estimates made by the Management, as well as evaluating the overallpresentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
In our opinion and to the best of our information and according to the explanationsgiven to us, the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
(a) in the case of the Balance Sheet, of the state of Affairs of the Company as atMarch 31, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit of the Company forthe year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows of the Company for theyear ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2003 ("theOrder") issued by the Central Government in terms of Section 227(4A) of the Act, wegive in the Annexure a statement on the matters specified in paragraphs 4 and 5 of theOrder.
2. As required by Section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the best of ourknowledge 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 theCompany 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 Statementdealt 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 CashFlow Statement comply with the Accounting Standards notified under the Act (which continueto be applicable in respect of Section 133 of the Companies Act, 2013 in terms of GeneralCircular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs).
(e) On the basis of the written representations received from the directors as on March31, 2014 taken on record by the Board of Directors, none of the directors is disqualifiedas on March 31, 2014 from being appointed as a director in terms of Section 274(1)(g) ofthe Act.
| ||For DELOITTE HASKINS & SELLS LLP |
| ||Chartered Accountants |
| ||(Firms Registration No. 117366W/W-100018) |
| ||B. P. SHROFF |
| ||Partner |
|MUMBAI, May 29, 2014 ||(Membership No. 34382) |
ANNEXURE TO THE INDEPENDENT AUDITORS REPORT
(Referred to in paragraph 1 under "Report on Other Legal and RegulatoryRequirements" section of our report of even date to the Members of Tata MotorsLimited)
(i) Having regard to the nature of the Companys business / activities / resultsduring the year, clauses (xiii) and (xiv) of paragraph 4 of the Order are not applicableto the Company.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars, includingquantitative details and situation of fixed assets;
(b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification which, in our opinion, provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanation given to us, no material discrepancies were noticed on suchverification;
(c) The fixed assets disposed off during the year, in our opinion, do not constitute asubstantial 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 inventories:
(a) As explained to us, the stock of finished goods and work-in-progress in theCompanys custody have been physically verified by the Management as at the end ofthe financial year, before the year-end or after the year-end, other than a significantpart of the spare parts held for sale, and raw materials in the Companys custody forboth of which, there is a perpetual inventory system and a substantial portion of thestocks have been verified during the year. In our opinion, the frequency of verificationis reasonable. In case of materials and spare parts held for sale lying with the thirdparties, certificates confirming stocks have been received periodically for stocks heldduring the year and for a substantial portion of such stocks held at the year-end;
(b) In our opinion and according to the information and explanations given to us, theprocedures of physical verification of inventories followed by the Management werereasonable and adequate in relation to the size of the Company and the nature of itsbusiness;
(c) In our opinion and according to the information and explanations given to us, theCompany has maintained proper records of its inventories and no material discrepancieswere noticed on physical verification.
(iv) In respect of loans, secured or unsecured, granted by the Company to companies,firms or other parties covered in the Register maintained under Section 301 of theCompanies Act, 1956, according to the information and explanations given to us:
(a) The Company has granted unsecured loans aggregating Rs.146.28 crores to two partiesduring the year. At the year-end, the outstanding balances of such loans grantedaggregated Rs.562.69 crores (number of parties - three) and the maximum amount involvedduring the year was Rs. 875.18 crores (number of parties - four).
(b) The rate of interest and other terms and conditions of such loans are, in ouropinion, prima facie not prejudicial to the interests of the Company having regardto the business relationship with the companies to whom loans have been granted.
(c) The receipts of principal amounts have been as per stipulations. However, there aredelays in receipt of interest.
(d) In respect of overdue interest amounts of over Rs. 1 lakh remaining outstanding asat the year-end, as explained to us, Management has taken reasonable steps for recovery ofthe interest amount.
In respect of loans, secured or unsecured, taken by the Company from companies, firmsor other parties covered in the Register maintained under Section 301 of the CompaniesAct, 1956, according to the information and explanations given to us:
The Company has not taken any loans from such parties during the year accordinglyclauses (iii) (b) to (iii) (d) of Paragraph 4 of the Companies (Auditors Report)Order, 2003 are not applicable to the Company.
(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 natureand suitable alternative sources are not readily available for obtaining comparablequotations, there is an adequate internal control system commensurate with the size of theCompany and the nature of its business with regard to purchases of inventory and fixedassets and the sale of goods and services. During the course of our audit, we have notobserved any major weakness in such internal control system.
(vi) In respect of contracts or arrangements entered in the Register maintained inpursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge andbelief and according to the information and explanations given to us:
(a) The particulars of contracts or arrangements referred to in Section 301 that neededto be entered in the Register maintained under the said Section have been so entered.
(b) Where each of such transaction (excluding loans reported under paragraph (iv)above) is in excess of Rs. 5 lakhs in respect of any party, having regard to our commentsin paragraph (v) above, the transactions have been made at prices which are prima faciereasonable having regard to the prevailing market prices at the relevant time, other thancertain purchases which are of a special nature for which comparable quotations are notavailable and in respect of which we are, therefore, unable to comment if the transactionshave been carried out at prices having regard to the prevailing market prices at therelevant time.
(vii) In our opinion and according to the information and explanations given to us, theCompany has complied with the provisions of Sections 58A, 58AA or any other relevantprovisions 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 informationand explanations given to us, no order has been passed by the Company Law Board or theNational Company Law Tribunal or the Reserve Bank of India or any Court or any otherTribunal.
(viii) In our opinion, the Company has an adequate internal audit system commensuratewith the size and the nature of its business.
(ix) We have broadly reviewed the cost records maintained by the Company pursuant tothe Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Governmentunder Section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that primafacie, the prescribed cost records have been made and maintained. We have, however,not made a detailed examination of the cost records with a view to determine whether theyare accurate or complete.
(x) According to the information and explanations given to us in respect of statutorydues:
(a) The Company has generally been regular in depositing undisputed statutory dues,including Provident Fund, Investor Education and Protection Fund, Employees StateInsurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cessand other material statutory dues applicable to it with the appropriate authorities. Weare informed by the Company that the Employees States Insurance Act, 1948 isapplicable only to certain locations of the Company. With regard to the contribution underthe Employees Deposit Linked Insurance Scheme, 1976 (the Scheme), we are informedthat the Company has its own Life Cover Scheme, and consequently, an application has beenmade seeking an extension of exemption from contribution to the Scheme, which is awaited.
(b) There were no undisputed amounts payable in respect of Provident Fund, InvestorEducation and Protection Fund, Employees State Insurance, Income-tax, Sales Tax,Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory duesin arrears as at March 31, 2014 for a period of more than six months from the date theybecame payable.
(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Dutyand Cess which have not been deposited as on March 31, 2014 on account of disputes aregiven below:
|Name of Statute ||Nature of Dues ||Forum where Dispute is Pending ||Period to which the Amount Relates ||Amount Involved (Rs. in crores) |
|Income-tax Act, 1961 ||Income-tax ||Commissioner (Appeals) ||2004-05,2005-06,2008-09,2009-10,2010-11 || |
| ||Income-tax ||Appellate Tribunal ||2009-10 ||2.74 |
|Central Excise Laws ||Excise Duty & Service Tax ||Tribunal ||1993-94, 2002-03, 2004-05 to 2013-14 ||1,886.01 |
| ||Excise Duty & Service Tax ||Commissioner (Appeals) ||1984-85, 1995-96, 2003-04, 2009-10 to 2013-14 ||5.37 |
|Sales Tax Laws ||Sales Tax ||Supreme Court ||1995-96 ||13.01 |
| ||Sales Tax ||High Court ||1984-85 to 1988-89, 1990-91, 1993-94, 1994-95, 1997-98, 1999-00, 2001-02 to 2004-05 ||159.24 |
| ||Sales Tax ||Tribunal ||1983-84, 1988-89, 1989-90, 1992-93, 1995-96, 1998- 99, 2000-01, 2002-03 to 2004-05, 2007-08, 2010-11 ||14.84 |
| ||Sales Tax ||Commissioner (Appeals) ||1996-97, 1998-99, 2001-02 ||0.20 |
| ||Sales Tax ||Joint Commissioner ||1997-98, 1999-00 to 2012-13 ||449.13 |
| ||Sales Tax ||Additional Commissioner ||1989-90, 1997-98, 2001-02 to 2013-14 ||100.06 |
| ||Sales Tax ||Deputy Commissioner ||1979-80, 1986-87, 1988-89, 1991-92, 1992-93, 1994- 95, 1995-96, 2000-01 to 2001-02, 2003-04, 2005-06, 2007-08 to 2009-10, 2013-14 ||6.22 |
| ||Sales Tax ||Assistant Commissioner ||1990-91, 1995-96, 1997-98, 1999-00, 2008-09, 2010- 11, 2011-12 ||3.95 |
| ||Sales Tax ||Trade Tax Officer ||1989-90, 1995-96 to 2001-02, 2006-07 ||1.97 |
|Custom Laws ||Custom Duty ||Tribunal ||1998-99, 2008-09, 2011-12 ||4.46 |
(xi) The Company does not have any accumulated losses at the end of the financial yearand the Company has not incurred cash losses during the financial year covered by ouraudit and in the immediately preceding financial year.
(xii) In our opinion and according to the information and explanations given to us, theCompany has not defaulted in the repayment of dues to financial institutions, banks anddebenture holders.
(xiii) Based on our examination of the records and the information and explanationsgiven to us, the Company has not granted any loans and advances on the basis of securityby way of pledge of shares, debentures and other securities.
(xiv) According to the information and explanations given to us, the Company has notgiven guarantees for loans taken by others from banks or financial institutions.
(xv) In our opinion and according to the information and explanations given to us, theterm loans have been applied by the Company during the year for the purposes for whichthey were obtained.
(xvi) In our opinion and according to the information and explanations given to us, andon an overall examination of the Balance Sheet of the Company, we report that funds raisedon short-term basis aggregating Rs. 11,521.20 crores have been used for long-terminvestments. Further the Company has explained that steps are being taken to augment longterm funds.
(xvii) During the year the Company has not made any preferential allotment of shares toparties and companies covered in the Register maintained under Section 301 of theCompanies Act, 1956.
(xviii) During the period covered by our audit report, the Company has not issued anysecured debentures.
(xix) According to the information and explanations given to us, during the yearcovered 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 explanationsgiven to us, no fraud by the Company and no material fraud on the Company has been noticedor reported during the year.
| ||For DELOITTE HASKINS & SELLS LLP |
| ||Chartered Accountants |
| ||(Firm Registration No. 117366W/W-100018) |
| ||B. P. SHROFF |
| ||Partner |
| ||(Membership No. 34382) |
|MUMBAI, May 29, 2014 || |