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Tata Motors Ltd.

BSE: 500570 Sector: Auto
NSE: TATAMOTORS ISIN Code: INE155A01022
BSE 00:00 | 24 Apr 2020 Tata Motors Ltd
NSE 05:30 | 01 Jan 1970 Tata Motors Ltd

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OPEN 75.30
PREVIOUS CLOSE 75.65
VOLUME 2248898
52-Week high 239.10
52-Week low 63.60
P/E
Mkt Cap.(Rs cr) 24,616
Buy Price 74.15
Buy Qty 970.00
Sell Price 74.15
Sell Qty 1885.00
OPEN 75.30
CLOSE 75.65
VOLUME 2248898
52-Week high 239.10
52-Week low 63.60
P/E
Mkt Cap.(Rs cr) 24,616
Buy Price 74.15
Buy Qty 970.00
Sell Price 74.15
Sell Qty 1885.00

Tata Motors Ltd. (TATAMOTORS) - Auditors Report


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Company auditors report

To the Members of Tata Motors Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements ofTata Motors Limited ("the Company") which comprise the standalone balance sheetas at 31 March 2019 and the standalone statement of profit and loss (including othercomprehensive income) standalone statement of changes in equity and standalone statementof cash flows for the year then ended and notes to the standalone financial statementsincluding a summary of the significant accounting policies and other explanatoryinformation and includes two joint operations consolidated on a proportionate basis.

In our opinion and to the best of our information and according to theexplanations given to us and based on the consideration of report of other auditor onseparate financial statements of one joint operation as was audited by the other auditorthe aforesaid standalone financial statements give the information required by theCompanies Act 2013 ("Act") in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2019 and profit and other comprehensiveincome changes in equity and cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs arefurther described in the Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

Description of Key Audit Matter

A. Impairment testing of long-life property plant and equipment andintangible assets of passenger vehicles cash generating unit

The Company has identified passenger vehicle segment as a separate cashgenerating unit ('CGU'). The history of losses in the passenger vehicle business led theCompany to perform an impairment assessment as at 31 March 2019.

The annual impairment testing of passenger vehicle CGU involvessignificant judgements and estimates in assessing the recoverable value. The recoverablevalue is considered to be the higher of the Company's assessment of the value in use (VIU)and fair value less cost of disposal (FVLCD).

There is a risk over the Company's assessment and measurement ofimpairment due to:

• VIU: uncertainties involved in forecasting of cash flowsincluding key assumptions such as future sales volumes prices margins overheads growthrates and weighted average cost of capital.

• FVLCD: uncertainties involved in identifying appropriatecomparable companies estimating their market multiple and estimating the depreciatedreplacement cost of fixed assets.

(Refer note 2{p} of the standalone financial statements)

How the matter was addressed in the audit

The audit procedures included:

- Identification: Obtained an understanding of

Company's evaluation of identification of passenger vehicles segment asa cash generating unit;

- Controls: Tested management review controls on the assumptionsincluding underlying cash flow forecasts and impact of macro-economic factors on theforecasts. Tested management's review of the discounted cash flow calculations performedto support the impairment assessment including benchmarking of key assumptions (discountrates growth rate) and assessment of sensitivities;

- Completeness and accuracy of the VIU model:

Obtained valuation computation performed by the Company for itsimpairment assessment and agreed the mathematical accuracy of the VIU by recalculating thecash flow build up;

- Cash flow forecast assumptions: Involved independent valuationspecialists to assist in the evaluation of the assumptions (discount rate which includedcomparing the weighted average cost of capital with sector averages for the relevantmarkets in which the CGU operates and long-term growth rate) and challenged the keyassumptions and judgements within the build - up of the cash flow forecast (such as futuresales volumes and prices margins overheads etc.) and methodologies used by the Companyand its experts;

- Sensitivity analysis: Assessed the sensitivity of the outcome ofimpairment assessment to changes in key assumptions such as volumes and margins;

- FVLCD assumptions: Compared the market multiple used in the FVLCD tocomparative companies and to market data sources with the assistance of specialists.

Description of Key Audit Matter

B. Capitalisation of product development cost

Product development costs incurred on new vehicle platforms enginestransaxles and new vehicles are recognised as intangible assets only when technicalfeasibility has been established the Company has committed technical and commercialresources to complete the development and use the intangible asset and it is probable thatthe asset will generate future economic benefits.

The costs capitalised during the year include the cost of technicalknow-how expenses materials direct labour inspecting and testing charges designingcost software expenses and directly attributable overhead expenditure incurred up to thedate the intangible asset is available for use including interest capitalised.

The capitalisation of product development cost is considered to be akey audit matter given that the assessment of the capitalisation criteria set out in IndAS 38 'Intangible Assets' is made at an early stage of product development and there areinherent challenges with accurately predicting the future economic benefit which must beassessed as 'probable' for capitalisation to commence. There is a risk therefore thatdevelopment cost may get capitalised where the relevant criteria has not been met.

(Refer note 2{m} and note 5 of the standalone financial statements)

How the matter was addressed in the audit

The audit procedures included:

- Controls: Tested the Company's design and implementation andoperating effectiveness of controls around initiation of capitalisation of the productdevelopment cost including:

• management review controls over calculations of the futureeconomic benefit of the projects;

• observed management's validation of relevant data elements andbenchmarking the assumptions;

• evaluating management's assessment of whether costs recordedmeet the capitalisation criteria;

• observed management's assessment of sensitivity of the impact ofthe changes in key assumptions;

• discussed with senior management and

challenged management assumptions including key inputs such as volumesexpected revenues and associated costs on projects which have lower headroom.

- Test of details: On selected sample of amounts capitalised wetested:

• costs incurred towards projects;

• inspected the technical team's approvals for initiation ofcapitalisation;

• reviewed the central cost allocation for the year and determinedcosts capitalised are 'directly attributable' including the interest capitalised.

Other Information

The Company's management and Board of Directors are responsible for theother information. The other information comprises the information included in theCompany's annual report but does not include the financial statements and our auditors'report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

Management's Responsibility for the Standalone Financial Statements

The Company's management and Board of Directors are responsible for thematters stated in section 134(5) of the Act with respect to the preparation of thesestandalone financial statements that give a true and fair view of the state of affairsprofit/loss and other comprehensive income changes in equity and cash flows of theCompany including its joint operations in accordance with the accounting principlesgenerally accepted

in India including the Indian Accounting Standards (Ind AS) specifiedunder section 133 of the Act. The respective Board of Directors of the Company and itsjoint operations are responsible for maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand its joint operations and for preventing and detecting frauds and other irregularities;the selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the standalone financial statements that give a true and fair view and arefree from material misstatement whether due to fraud or error which have been used forthe preparation of the standalone financial statements by the Directors of the Company asaforesaid.

In preparing the standalone financial statements the respectivemanagement and Board of Directors of the Company and its joint operations are responsiblefor assessing the ability of each company to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the company or to ceaseoperations or has no realistic alternative but to do so.

The respective Board of Directors of the Company and its jointoperations is responsible for overseeing the financial reporting process of each company.

Auditors' Responsibilities for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls with reference to financialstatements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting in preparation of standalone financial statement and based onthe audit evidence obtained whether a material uncertainty exists related to events orconditions that may cast significant doubt on the appropriateness of this assumption. Ifwe conclude that a material uncertainty exists we are required to draw attention in ourauditor's report to the related disclosures in the standalone financial statements or ifsuch disclosures are inadequate to modify our opinion. Our conclusions are based on theaudit evidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company (including its joint operations) to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding thefinancial information of such entities or business activities within the Company and itsjoint operations to express an opinion on the standalone financial statements of which weare the independent auditors. We are responsible for the direction supervision andperformance of the audit of financial information of such entities. For the other entitiesincluded in the standalone financial statements which have been audited by other auditorsuch other auditor remains responsible for the direction supervision and performance ofthe audit carried out by them. We remain solely responsible for our audit opinion. Ourresponsibilities in this regard are further described in section titled 'Other Matter' inthis audit report.

We believe that the audit evidence obtained by us along with theconsideration of audit report of the other auditor referred to in the Other Matterparagraph below is sufficient and appropriate to provide a basis for our audit opinion onthe standalone financial statements.

We communicate with those charged with governance of the Company andsuch other entities included in the standalone financial statements of which we are theindependent auditors regarding among other matters the planned scope and timing of theaudit and significant audit findings including any significant deficiencies in internalcontrol that we identify during our audit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Other Matter

We did not audit the financial statements of one joint operationincluded in the standalone financial statements whose annual financial statements reflecttotal assets of Rs 6345.87 crores as at 31 March 2019 total revenue of Rs 6782.43crores and net cash flows amounting to Rs 75.02 crores for the year ended 31 March 2019as considered on a proportionate basis in the standalone financial statements. Theseannual financial statements have been audited by other auditor whose report has beenfurnished to us by the management and our opinion on the standalone financial statementsto the extent they have been derived from such annual financial statements is basedsolely on the report of the other auditor. Our opinion on the standalone financialstatements is not modified in respect of the above matter with respect to our reliance onthe work done and the report of the other auditor.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016("the Order") issued by the Central Government in terms of section 143 (11) ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order for the Company (excluding its joint operations) to theextent applicable.

2. (A) As required by Section 143(3) of the Act based on our audit andon the consideration of report of the other auditor on separate financial statements of ajoint operation as were audited by the other auditor as noted in the "OtherMatter" paragraph we report to the extent applicable that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company and its joint operations so far as it appears from our examination ofthose books and the report of the other auditor.

c) The standalone balance sheet the standalone statement of profit andloss (including other comprehensive income) the standalone statement of changes in equityand the standalone statement of cash flows dealt with by this Report are in agreement withthe relevant books of account

d) In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under section 133 of the Act.

e) On the basis of the written representations received from thedirectors as on 31 March 2019 taken on record by the Board of Directors and the report ofthe statutory auditors of the joint operations none of the directors of the Company andits joint operations is disqualified as on 31 March 2019 from being appointed as adirector in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls withreference to financial statements of the Company and its joint operations which arecompanies incorporated in India and the operating effectiveness of such controls refer toour separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors'Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous and based on the consideration of the report of the other auditor on separate financialstatements of a joint operation as noted in the "Other Matter" paragraph:

i. The standalone financial statements disclose the impact of pendinglitigations as at 31 March 2019 on the financial position of the Company and its jointoperations. Refer note 39 to the standalone financial statements;

ii. Provision has been made in the standalone financial statements asrequired under the applicable law or Ind AS for material foreseeable losses on long-termcontracts including derivative contracts. Refer note 49 (iv) to the standalone financialstatements;

iii. There has been no delay in transferring amounts to the InvestorEducation and Protection Fund by the Company or its joint operations incorporated in Indiaduring the year ended 31 March 2019.

iv. The disclosures in the standalone financial statements regardingholdings as well as dealings in specified bank notes during the period from 8 November2016 to 30 December 2016 have not been made in these financial statements since they donot pertain to the financial year ended 31 March 2019.

( C) With respect to the matter to be included in the Auditors' Reportunder section 197(16):

In our opinion and according to the information and explanations givento us and based on the reports of the statutory auditors of such joint operationsincorporated in India which were not audited by us the remuneration paid during thecurrent year by the Company and joint operations to its directors is in accordance withthe provisions of Section 197 of the Act as applicable. The remuneration paid to anydirector by the Company and joint operations is not in excess of the limit laid down underSection 197 of the Act. The Ministry of Corporate Affairs has not prescribed other detailsunder Section 197(16) which are required to be commented upon by us.

For B S R & Co. LLP

Chartered Accountants Firm's Registration No: 101248W/W-100022

Yezdi Nagporewalla
Place : Mumbai Partner
Date : 20 May 2019 Membership No: 049265

Annexure A to the Independent Auditors' Report - 31 March 2019

With reference to the Annexure referred to in paragraph 1 in Report onOther Legal and Regulatory Requirements of the Independent Auditor's Report to the membersof the Company on the Standalone financial statements for the year ended 31 March 2019 wereport that:

(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets except forcertain tools where the Company is in the process of updating the location.

(b) The Company has a regular program of physical verification of itsfixed assets by which its fixed assets are verified in a phased manner over a period ofthree years. In our opinion this periodicity of physical verification is reasonablehaving regard to the size of the Company and the nature of its fixed assets. During theyear the Company has physically verified a substantial portion of the fixed assets as perthe program and has represented that the balance will be verified next year. According tothe information and explanations given to us no material discrepancies were noticed onverification of fixed assets.

( c) According to the information and explanations given to us therecords examined by us and based on the examination of the registered sale deed /transferdeed /conveyance deed /court orders approving schemes of arrangements /amalgamationsprovided to us we report that the title deeds comprising all the immovable propertiesof land and buildings which are freehold are held in the name of the Company as at theBalance Sheet date except for certain title deeds for land amounting to Rs 525.80 croreswhich are yet to be transferred in the name of the Company. In respect of immovableproperties that have been taken on lease and disclosed as property plant and equipment inthe standalone financial statements the lease agreements are in the name of the Companywhere the Company is the lessee in the agreement.

(ii) The inventory including inventory lying with third parties exceptgoods-in-transit has been physically verified by the management during the year. In ouropinion the frequency of such verification is reasonable and adequate in relation to thesize of the Company and the nature of its business. The discrepancies noticed onverification between the physical stocks and the book records were not material and havebeen properly dealt with in the books of account.

(iii) According to information and explanations given to us theCompany has granted loans secured or unsecured to companies firms or other partiescovered in the Register maintained under Section 189 of the Companies Act 2013 inrespect of which:

(a) The terms and conditions of the grant of such loans are in ouropinion prima facie not prejudicial to the Company's interest.

(b) The schedule of repayment of principal and payment of interest hasbeen stipulated and repayments or receipts of principal amounts and interest have beenregular as per stipulations.

( c) There is no amount overdue for more than 90 days at the BalanceSheet date.

(iv) According to the information and explanations given to us theCompany has complied with provisions of section 185 and 186 of the Companies Act 2013 inrespect of grant of loans making investments and providing guarantees and securities asapplicable.

(v) According to the information and explanations given to us theCompany has not accepted any deposits during the year. In respect of unclaimed depositsthe Company has complied with the provisions of section 73 to 76 of the Act and the rulesframed thereunder.

(vi) The maintenance of cost records has been specified by the CentralGovernment under Section 148(1) of the Companies Act 2013 in respect of the productsmanufactured by the Company. We have broadly reviewed the books of account maintained bythe Company pursuant to the rules prescribed by the Central Government for maintenance ofcost records under section 148(1) of the Companies Act 2013 in respect of manufacture ofproducts and are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained. However we have not made a detailed examination of the costrecords with a view to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to

us and on the basis of our examination of the records of the Companyamounts deducted / accrued in the books of account in respect of undisputed statutory duesincluding Provident fund Employees' state insurance Income tax Duty of customs Goodsand services tax and other material statutory dues have generally been regularly depositedduring the year by the Company with the appropriate authorities except for Provident funddues referred to in note 39 to the financial statements. We are informed by the Companythat the Employee's State Insurance Act 1948 is applicable only to certain locations ofthe Company. With regard to the contribution under the Employee's Deposit Linked InsuranceScheme 1976 (the scheme) the Company has sought exemption from making contribution tothe scheme since it has its own Life Cover Scheme. The Company has made application onMarch 28 2017 seeking an extension of exemption from contribution to the Scheme for aperiod of 3 years which is awaited. As explained to us the Company does not have dues onaccount of Sales Tax Service Tax Value Added Tax and Duty of Excise.

According to the information and explanations given to us noundisputed amounts payable in respect of Provident fund Employees' state insuranceIncome tax Duty of customs Goods and services tax and other material statutory dues werein arrears as at 31 March 2019 for a period of more than six months from the date theybecame payable. We draw attention to note 39 to the financial statements which more fullyexplains the matter regarding non-payment of provident fund contribution pursuant toSupreme Court judgement dated 28 February 2019.

(b) According to the information and explanations given to us thereare no dues of Income tax Sales tax Service tax Value added tax Goods and servicestax Duty of customs and Duty of excise which have not been deposited by the Company withappropriate authorities on account of any disputes except for the following:

Name of the statute Nature of dues Amount (Rs Crores) Amount paid under protest* (Rs Crores) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income tax 2.78 2.78 1982-83 1991-92 and 1995-96 High Court
147.27 147.27 2003-04 2005-06 to 2011-12 and erstwhile Tata Finance Limited 1997-98 to 1999-2000 Income Tax Appellate Tribunal
121.12 121.09 2012-13 to 2014-2015 and erstwhile Tata Motors Drivelines Limited 2015-16 Commissioner of Income Tax Appeals
Central Excise Act 1944 Duty of excise 133.00 45.52 1991-92 to 1993-94 2002-03 2005-06 to 2010-11 High Court
1439.53 25.51 1991-92 1992-93 1994-95 1996-97 1997-98 1999-2000 to 2017-18 The Custom Excise and Service Tax Appellate Tribunal
40.19 1.73 1984-85 1999-2000 to 2017-18 Appellate Authority upto Commissioner's level
Finance Act 1994 Service tax 1086.69 10.79 2004-05 to 2013-14 High Court
76.14 4.64 2003-04 2006-07 to 2008-09 201011 2013-14 2014-15 2017-18 The Custom Excise and Service Tax Appellate Tribunal
7.43 0.15 2004-05 to 2009-10 2011-12 2013-14 to 2017-18 Appellate Authority upto Commissioner's level
Sales Tax Sales tax 13.18 - 1995-96 Supreme Court
301.93 70.95 1984-85 to 1988-89 1990-91 1992-93 2001-02 to 2005-06 2007-08 to 2016-17. High Court
92.22 14.07 1983-84 1985-86 1989-90 1998-99 2000-01 2004-05 to 2015-16 Sales Tax Tribunal
545.03 28.62 1979-80 1986-87 1989-90 to 2018-19 Appellate Authority upto Commissioner's level
Customs Act 1962 Duty of 3.90 3.90 2011-12 Supreme Court
customs 7.49 3.11 2008-09 The Custom Excise and Service Tax Appellate Tribunal

* includes refunds adjusted by the authorities.

(viii) In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in repayment of loans or borrowings to banksand dues to debenture holders. The Company did not have any outstanding dues to anyfinancial institution or government during the year.

(ix) In our opinion and according to the information and explanationsgiven to us the Company has not raised money by way of further public offer (includingdebt instruments) during the year and the term loans taken by the Company have beenapplied for the purpose for which they were raised.

(x) According to the information and explanations given to us no fraudby the Company and no material fraud on the Company by its officers or employees has beennoticed or reported during the course of our audit.

(xi) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has paid / providedfor managerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V of the Act for the year ended 31 March2019.

(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi Company as per the Act. Accordingly paragraph3(xii) of the Order is not applicable to the Company.

(xiii) In our opinion and according to the information and explanationsgiven to us all transactions with related parties are in compliance with section 177 and188 of the Act and the details as required by the applicable accounting standards havebeen disclosed in the standalone financial statements.

(xiv) According to the information and explanations given to us theCompany has not made any preferential allotment or private placement of shares or fully orpartially convertible debentures during the year. Accordingly paragraph 3(xiv) of theOrder is not applicable to the Company.

(xv) According to the information and explanations given to us theCompany has not entered into any non-cash transactions with directors or persons connectedwith them during the year. Accordingly paragraph 3(xv) of the Order is not applicable tothe Company.

(xvi) In our opinion and according to the information and explanationsgiven to us the Company is not required to register under section 45-IA of the ReserveBank of India Act 1934.

For B S R & Co. LLP

Chartered Accountants Firm's Registration No: 101248W/W-100022

Yezdi Nagporewalla
Place : Mumbai Partner
Date : 20 May 2019 Membership No: 049265

Annexure B to the Independent Auditors' Report - 31 March 2019

Report on the internal financial controls with reference to theaforesaid standalone financial statements under Clause (i) of Sub-section 3 of Section 143of the Companies Act 2013

(Referred to in paragraph 2(A)(f) under 'Report on Other Legal andRegulatory Requirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference tofinancial statements of Tata Motors Limited ("the Company") as of 31 March 2019in conjunction with our audit of the standalone financial statements of the Company forthe year ended on that date which includes internal financial controls with reference tofinancial statements of the Company's joint operations which are companies incorporated inIndia.

In our opinion the Company and its joint operations which arecompanies incorporated in India have in all material respects adequate internalfinancial controls with reference to financial statements and such internal financialcontrols were operating effectively as at 31 March 2019 based on the internal financialcontrols with reference to financial statements criteria established by the Company andits joint operations considering the essential components of internal control stated inthe Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issuedby the Institute of Chartered Accountants of India (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The respective Company's management and the Board of Directors areresponsible for establishing and maintaining internal financial controls based on theinternal financial controls with reference to financial statements criteria established bythe respective companies considering the essential components of internal control statedin the Guidance Note. These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence to therespective company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies Act 2013 (hereinafter referred to as "the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls with reference to financial statements based on our audit. We conductedour audit in accordance with the Guidance Note and the Standards on Auditing prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls with reference to financial statements. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlswith reference to financial statements were established and maintained and whether suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error.

We believe that the audit evidence we have obtained and the auditevidence obtained by the other auditor of a joint operation in terms of their reportreferred in the Other Matter paragraph below is sufficient and appropriate to provide abasis for our audit opinion on the internal financial controls with reference tostandalone financial statements.

Meaning of Internal Financial controls with Reference to FinancialStatements

A company's internal financial controls with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial controls with reference to financial statements include those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.

Inherent Limitations of Internal Financial controls with Reference toFinancial Statements

Because of the inherent limitations of internal financial controls withreference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Other Matter

Our aforesaid report under Section 143(3)(i) of the Act on the adequacyand operating effectiveness of the internal financial controls with reference tostandalone financial statements in so far as it relates to one joint operation which is acompany incorporated in India is based solely on the corresponding report of the otherauditor.

For B S R & Co. LLP

Chartered Accountants Firm's Registration No: 101248W/W-100022

Yezdi Nagporewalla
Place : Mumbai Partner
Date : 20 May 2019 Membership No: 049265


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