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TO THE MEMBERS OF TATA MOTORS LIMITED
1. We have audited the attached Balance Sheet of TATA MOTORS LIMITED ("the Company") as at March 31,2012, the Profit and Loss Statement 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 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 (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 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 Statement 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 Statement 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, 2012;
(ii) in the case of the Profit and Loss Statement, 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, 2012 taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2012 from being appointed as a director in terms of Section 274(1) (g) of the Companies Act, 1956.
ANNEXURE TO THE AUDITORS REPORT
(i) The nature of the Company's 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 Company's 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 Company's 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.521.33 Crores to four parties covered in the register maintained under Section 301 of the Companies Act, 1956 (including Rs.86.92 Crores granted during the year to two parties). At the year-end, the outstanding balances of such loans aggregated Rs.579.36 Crores and maximum amount outstanding during the year was Rs. 579.36 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 amount have been as per stipulations. However, there have been delays in receipts of interest.
(d) There are no overdue amounts in respect of principal amount outstanding. In respect of overdue interest amounts of more than rupees one lakh remaining outstanding as at the year-end, except in respect of interest outstanding from a subsidiary company for which the provision has been made, 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 tak