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Tata Motors Ltd.

BSE: 500570 Sector: Auto
NSE: TATAMOTORS ISIN Code: INE155A01022
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OPEN 148.00
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VOLUME 3307721
52-Week high 201.80
52-Week low 63.60
P/E
Mkt Cap.(Rs cr) 45,541
Buy Price 136.25
Buy Qty 1.00
Sell Price 137.40
Sell Qty 2439.00
OPEN 148.00
CLOSE 147.90
VOLUME 3307721
52-Week high 201.80
52-Week low 63.60
P/E
Mkt Cap.(Rs cr) 45,541
Buy Price 136.25
Buy Qty 1.00
Sell Price 137.40
Sell Qty 2439.00

Tata Motors Ltd. (TATAMOTORS) - Auditors Report

Company auditors report

To the Members of Tata Motors Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Tata Motors Limited ('theCompany') which comprise the standalone balance sheet as at March 31 2020 and thestandalone statement of profit and loss (including other comprehensive income) standalonestatement of changes in equity and standalone statement of cash flows for the year thenended and notes to the standalone financial statements including a summary of thesignificant accounting policies and other explanatory information and includes two jointoperations consolidated on a proportionate basis.

In our opinion and to the best of our information and according to the explanationsgiven to us and based on the consideration of report of other auditor on separatefinancial statements of one joint operation as was audited by the other auditor theaforesaid standalone financial statements give the information required by the CompaniesAct 2013 ('Act') in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2020 and loss and other comprehensive income changes in equityand its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence obtained by us along with the consideration of auditreport of the other auditor referred to in "Other Matter" paragraph below issufficient and appropriate to provide a basis for our opinion on the standalone financialstatements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Description of key Audit Matter

Key audit matter How the matter was addressed in our audit
1) Impact of COVID-19 pandemic on Going Concern assessment of the Company
Refer Note 2(c) related to "Going Concern" and Note 2(d)(v) related to "Estimation of uncertainties relating to the global health pandemic from COVID-19" of the standalone financial statements In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
The World Health Organisation in February 2020 declared COVID 19 as a pandemic. Governments around the world including India have been taking significant measures to curb the spread of the virus including imposing mandatory lockdowns and restrictions in activities. Consequently the Company's manufacturing plants and offices also had to be closed down for a considerable period of time including after the year end. • Obtained an understanding of the Company's internal controls over its forecasting process;
• Compared the key assumptions adopted by the Company in preparing the forecasted cash flows with our expectations based on actual cashflows of 2019-20 and our understanding of the changes to the Company's business;
These lockdowns have a significant impact on the overall economic activity in India and in particular on the automotive industry. Accordingly the future cash flow projections used to assess going concern are subject to significant estimation uncertainties. • Assessed the sensitivities and performed stress testing on the forecasted cash flows;
In view of the above we have identified our assessment of the going concern basis of accounting as a key audit matter. • Examined the Company's funding arrangements and evaluated the financing terms and covenants to assess its ability to renew existing loans and/or obtain additional financing if the need arises;
• Assessed the adequacy of the disclosures related to application of the going concern assumption.

2) Impairment of property plant and equipment and intangible assets of passengervehicles cash generating unit

The Company holds intangible assets under development and tests its cash generating units ('CGU') for impairment at least annually. The Company has identified its passenger vehicle business unit as a separate cash generating unit ('CGU'). As at March 31 2020 the Company recognized an impairment loss of Rs 1418.64 crores for this CGU. The carrying value after impairment of the net assets in this CGU is Rs 9120.31 crores. In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence Test of Controls:
The history of losses in the passenger vehicles CGU declining sales volumes and the suspension of manufacturing and sales activity due to mandatory lockdowns towards and after year end consequent to the COVID-19 pandemic has led to the impairment test being subject to significant judgements and estimates applied by management. • We tested the design implementation and operating effectiveness of key controls over the assumptions and inputs used in cash flow forecasts and valuation models.
Test of Details:
Management believes that no further adjustments are required to these estimates. However in view of the highly uncertain economic environment impacting the automotive industry a definitive assessment of the impact is highly dependent upon circumstances as they evolve in future and the actual results may differ from those estimated as at the date of approval of these financial statements. • Involved independent valuation specialist to assist in evaluating the appropriateness of the valuation models used including evaluating whether the comparable companies considered in the fair value less costs to sell (FVLCS) model are appropriate and whether the discount rate applied in the value in use (VIU) model is appropriate;
This annual impairment test is considered to be a key audit matter due to the complexity of the accounting requirements and the significant judgement required in determining the key assumptions including estimates of future sales volumes and prices operating costs terminal value growth rates capital expenditure and the weighted-average cost of capital (discount rate) to be used to estimate the recoverable amount. (Refer note 2(r) and 6(a) of the standalone financial statements) • evaluated the appropriateness of the assumptions applied to key inputs such as sales volumes and prices operating costs long-term growth rates which included comparing these inputs with externally derived data as well as our own assessments based on our knowledge of the Company and the industry;
• performed sensitivity analysis which included assessing the effect of reasonably possible reductions in growth rates and forecast cash flows to evaluate the impact on the impairment loss recognized; and
• evaluated the adequacy of the standalone financial statement disclosures including disclosures of key assumptions judgements and sensitivities.
3) Recognition of product development cost as an intangible asset
Product development costs incurred on new vehicle platforms engines transaxles and new vehicles are recognised as intangible assets only when: In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
• technical feasibility has been established Test of Controls:
• the Company has committed technical and commercial resources to complete the development and use the intangible asset and • Tested the Company's design implementation and operating effectiveness of controls to comply with the recognition criteria set out in Ind AS 38 'Intangible Assets' for projects initiated during the year.
• it is probable the asset will generate future economic benefits.
Test of details:
The costs capitalised during the year include the cost of technical knowhow expenses materials direct labour inspecting and testing charges designing cost software expenses and directly attributable overhead expenditure incurred up to the date the intangible asset is available for use including interest. The recognition of product development cost as an intangible asset is considered to be a key audit matter given the assessment of the recognition criteria set out in Ind AS 38 'Intangible Assets' is made at an early stage of product development and there are inherent challenges with accurately predicting the future economic benefit which must be assessed as 'probable' for capitalisation to commence. There is a risk therefore that development cost may get capitalised where the relevant criteria has not been met. • Evaluated the inputs used for volumes sales margins and capital expenditure in the assessment of future economic benefit;
• Evaluated historical forecasting accuracy for these inputs by comparing the historical forecasts to the actual results for similar projects; • Performed a sensitivity analysis of changes in the forecasts considering the impact of historical forecasting accuracy;
Further the decline in volumes in the current year and the suspension of manufacturing activity due to mandatory lockdowns towards and after year end consequent to the COVID-19 pandemic has significantly increased the estimation uncertainties. • For selected projects examined approvals of the project oversight committee to determine the expected future economic benefits and technical feasibility of the project.
(Refer note 2{o} and note 5 of the standalone financial statements) • For selected projects compared the inputs used in the forecasting of future economic benefit to source documents.

Other Information

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

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

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's and Board of Directors' Responsibility for the Standalone FinancialStatements

The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit/loss and othercomprehensive income changes in equity and cash flows of the Company including its jointoperations in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under section 133 of the Act.The respective Management and Board of Directors of the Company and its joint operationsare responsible for maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding of the assets of the respective company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and the design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring accuracy and completeness of theaccounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error which have been used for the preparation ofthe standalone financial statements by the Management and Directors of the Company asaforesaid.

In preparing the standalone financial statements the respective Management and Boardof Directors of the Company and its joint operations are responsible for assessing theability of each company to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless the Boardof Directors either intends to liquidate the company or to cease operations or has norealistic alternative but to do so.

The respective Board of Directors of the Company and its joint operations is alsoresponsible for overseeing the financial reporting process of each company.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high Level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone financial statementsmade by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors use ofthe going concern basis of accounting in preparation of standalone financial statementsand based on the audit evidence obtained whether a material uncertainty exists relatedto events or conditions that may cast significant doubt on the Company's ability tocontinue as a going concern. If we conclude that a material uncertainty exists we arerequired to draw attention in our auditor's report to the related disclosures in thestandalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company (includingits joint operations) to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

• Obtain sufficient appropriate audit evidence regarding the financial informationof the Company and its joint operations to express an opinion on the standalone financialstatements of which we are the independent auditors. We are responsible for thedirection supervision and performance of the audit of financial information of theCompany and such joint operation. For the other joint operation included in the standalonefinancial statements which has been audited by other auditor such other auditor remainsresponsible for the direction supervision and performance of the audit carried out bythem. We remain solely responsible for our audit opinion. Our responsibilities in thisregard are further described in section titled 'Other Matter' in this audit report.

We believe that the audit evidence obtained by us along with the consideration of auditreport of the other auditor referred to in the Other Matter paragraph below is sufficientand appropriate to provide a basis for our audit opinion on the standalone financialstatements.

We communicate with those charged with governance of the Company and such otherentities included in the standalone financial statements of which we are the independentauditors regarding among other matters the planned scope and timing of the audit andsignificant audit findings including any significant deficiencies in internal controlthat we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Other Matter

We did not audit the financial statements of one joint operation included in thestandalone financial statements of the Company whose financial statements reflect totalassets (before consolidation adjustments) of Rs 6876.67 crores as at March 31 2020total revenue (before consolidation adjustments) of Rs 5610.74 crores and net profitafter tax (before consolidation adjustments) of Rs 286.94 crores and net cash inflows(before consolidation adjustments) amounting to Rs 509.62 crores for the year ended March31 2020 as considered in the standalone financial statements. These financial statementshave been audited by other auditor whose report has been furnished to us by the managementand our opinion on the standalone financial statements in so far as it relates to theamounts and disclosures included in respect of this joint operation and our report interms of sub-section (3) of Section 143 of the Act in so far as it relates to theaforesaid joint operation is based solely on the audit report of the other auditor.

Our opinion on the standalone financial statements and our report on Other Legal andRegulatory Requirements below is not modified in respect of the above matter with respectto our reliance on the 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 bythe Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder for the Company (excluding its joint operations) to the extent applicable.

2. (A) As required by Section 143(3) of the Act based on our audit and on theconsideration of report of the other auditor on separate financial statements of a jointoperation as were audited by the other auditor as noted in the "Other Matter"paragraph we report to the extent applicable that:

a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany and its joint operations so far as it appears from our examination of those booksand the report of the other auditor.

c) The standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with therelevant books of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under section 133 of the Act.

e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors and the report of the statutoryauditors of the joint operations none of the directors of the Company and its jointoperations is disqualified as on March 31 2020 from being appointed as a director interms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and its joint operations which are companiesincorporated in India and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us and basedon the consideration of the report of the other auditor on separate financial statementsof a joint operation as noted in the "Other Matter" paragraph:

i. The standalone financial statements disclose the impact of pending litigations as atMarch 31 2020 on the financial position of the Company and its joint operations - ReferNote 40 to the standalone financial statements;

ii. Provision has been made in the standalone financial statements as required underthe applicable law or Ind AS for material foreseeable losses on long-term contractsincluding derivative contracts - Refer Note 50 (iii) to the standalone financialstatements;

iii. There has been no delay in transferring amounts to the Investor Education andProtection Fund by the Company or its joint operations incorporated in India during theyear ended March 31 2020;

iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these financial statements since they do not pertain to thefinancial year ended March 31 2020.

(C) With respect to the matter to be included in the Auditors' Report under section197(16):

We draw your attention to Note 45 to the standalone financial statements for the yearended March 31 2020 according to which the managerial remuneration paid to the CEO andManaging Director of the Company amounting to Rs 16.48 crores for the financial yearexceeds the prescribed limits under Section 197 read with Schedule V to the Act by Rs11.82 crores. This amount excludes Performance and Long term Incentives which will beaccrued post determination and approval by the Nomination and Remuneration Committee ofthe Company and such amounts will also exceed the prescribed limits. As per theprovisions of the Act the excess remuneration is subject to approval of the shareholderswhich the Company proposes to obtain in the forthcoming Annual General Meeting. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us.

Further with respect to the joint operations included in the standalone financialstatements based on the reports of statutory auditors of such joint operations weunderstand that the joint operations are private limited companies and accordingly mattersto be included in Auditor's report under section 197(16) are not applicable for such jointoperations.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
YEZDI NAGPOREWALLA
Partner
Place: Mumbai Membership No. 049265
Date: June 15 2020 UDIN - 20049265AAAAAP9940

Annexure A to the Independent Auditors' Report - 31 March 2020

With reference to the Annexure referred to in paragraph 1 in Report on Other Legal andRegulatory Requirements of the Independent Auditor's Report to the members of the Companyon the Standalone financial statements for the year ended 31 March 2020 we report that:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets except for certain tools where theCompany is in the process of updating the location.

(b) The Company has a regular program of physical verification of its fixed assets bywhich its fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its fixed assets. According to the information andexplanations given to us no material discrepancies were noticed on such verification offixed assets.

(c) According to the information and explanations given to us the records examined byus and based on the examination of the registered sale deed /transfer deed /conveyancedeed /court orders approving schemes of arrangements /amalgamations provided to us wereport that the title deeds comprising all the immovable properties of land andbuildings which are freehold are held in the name of the Company as at the Balance Sheetdate except for certain title deeds for land and buildings amounting to Rs 829.39 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 Right of Use assets in thestandalone 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 /subsequent to the year end. In our opinion the frequency of such verification isreasonable and adequate in relation to the size of the Company and the nature of itsbusiness. The discrepancies noticed on verification between the physical stocks and thebook records were not material and have been properly dealt with in the books of account.

(iii) According to information and explanations given to us the Company has grantedloans secured or unsecured to companies firms or other parties covered in the Registermaintained under Section 189 of the Companies Act 2013 in respect of which:

a) The terms and conditions of the grant of such loans are in our opinion primafacie not prejudicial to the Company's interest.

b) The schedule of repayment of principal and payment of interest has been stipulatedand repayments or receipts of principal amounts and interest have been regular as perstipulations or as renegotiated except as reported below.

c) The Company has an amount of Rs 1.28 crores overdue towards interest for more thanninety days from a subsidiary company covered in the register maintained under section 189of the Companies Act 2013. As explained to us the Company is considering certain stepsfor recovery of overdue amounts.

(iv) According to the information and explanations given to us the Company hascomplied with provisions of section 185 and 186 of the Companies Act 2013 in respect ofgrant of loans making investments and providing guarantees and securities as applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposits during the year. In respect of unclaimed deposits the Company hascomplied with the provisions of section 73 to 76 of the Act and the rules framedthereunder.

(vi) The maintenance of cost records has been specified by the Central Government underSection 148(1) of the Companies Act 2013 in respect of the products manufactured by theCompany. We have broadly reviewed the books of account maintained by the Company pursuantto the rules prescribed by the Central Government for maintenance of cost records undersection 148(1) of the Companies Act 2013 in respect of manufacture of products and are ofthe opinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including Provident fund Employees' stateinsurance Income tax Duty of customs Goods and services tax and other materialstatutory dues have generally been regularly deposited during the year by the Company withthe appropriate authorities except for Provident fund dues referred to in note 40 to thefinancial statements. We are informed by the Company that the Employee's State InsuranceAct 1948 is applicable only to certain locations of the Company. With regard to thecontribution under the Employee's Deposit Linked Insurance Scheme 1976 (the scheme) theCompany has sought exemption from making contribution to the scheme since it has its ownLife Cover Scheme. The Company has made an application on March 28 2017 seeking anextension of exemption from contribution to the Scheme for a period of 3 years approval ofwhich is awaited. As explained to us the Company does not have dues on account of SalesTax Service Tax Value Added Tax and Duty of Excise.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Employees' state insurance Income tax Duty ofcustoms Goods and services tax and other material statutory dues were in arrears as atMarch 31 2020 for a period of more than six months from the date they became payable. Wedraw attention to note 40 to the financial statements which more fully explains the matterregarding non-payment of provident fund contribution pursuant to Supreme Court judgementdated February 28 2019.

(b) According to the information and explanations given to us there are no dues ofIncome tax Sales tax Service tax Value added tax Goods and services tax Duty ofcustoms and Duty of excise which have not been deposited by the Company with appropriateauthorities 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
107.96 107.96 2003-04 2005-06 to 2011-12 and erstwhile Tata Finance Limited 1997-98 to 1999-2000 Income Tax Appellate Tribunal
227.62 # 121.09 2012-13 to 2015-2016 and erstwhile Tata Motors Drivelines Limited 2015-16 Commissioner of Income Tax Appeals
Central Excise Act 1944 Duty of excise 42.28 0.15 1991 -92 1992-93 1993-94200220032005-062006-072009-1020102011 High Court
553.99 23.47 1991-921992-931994-951996971997-98 and 1999-2000 to 2017-18 The Custom Excise and Service Tax Appellate Tribunal
10.08 0.34 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
161.28 3.82 2004-05 to 2017-18 The Custom Excise and Service Tax Appellate Tribunal
Sales Tax Sales tax 13.18 - 1995-96 Supreme Court
281.50 50.51 1984-85 to 1988-89 1990-91 1992-93 2001-02 to 2005-06 2007-08 to 2016-17. High Court
242.91 26.73 1983-84 1985-86 1989-901998-99 2000-01 and 2004-05 to 2015-16 Sales Tax Tribunal
451.23 26.31 1979-80 1986-87 1989-90 to 2017-18 Appellate Authority upto Commissioner's level
Customs Act 1962 Duty of customs 3.90 3.90 2011-12 Supreme Court
7.49 3.11 2008-09 The Custom Excise and Service Tax Appellate Tribunal

*includes refunds adjusted by the authorities.

# Demand of Rs 106.53 crores has been subsequently deleted pursuant to order undersection 154 of the Income Tax Act 1961 passed on June 8 2020.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans or borrowings to banks and dues todebenture holders. The Company did not have any outstanding dues to any financialinstitution or government during the year.

(ix) In our opinion and according to the information and explanations given to us theCompany has not raised money by way of further public offer (including debt instruments)during the year and the term loans taken by the Company have been applied for the purposefor which they were raised.

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

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V of the Act for the year ended March 31 2020 except forRs 11.82 crores of remuneration paid / provided to its CEO and Managing Director which isin excess of the limits prescribed under Section 197 read with Schedule V of the Act. Thisamount excludes Performance and Long Term Incentives which will be accrued postdetermination and approval by the Nomination and Remuneration Committee of the Companyand such amounts will also exceed the prescribed limits. As per the provisions of theCompanies Act 2013 the excess remuneration is subject to approval of the shareholderswhich the Company proposes to obtain in the forthcoming Annual General Meeting.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company as per the Act. Accordingly paragraph 3(xii) of the Orderis not applicable to the Company.

(xiii) In our opinion and according to the information and explanations given to usall transactions with related parties are in compliance with section 177 and 188 of theAct and the details as required by the applicable accounting standards have beendisclosed in the standalone financial statements.

(xiv) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has made preferential allotment ofequity shares during the year in compliance with the requirements of Section 42 of theAct. Out of the total money raised aggregating Rs 3892 crores Rs 2762 crores has beenutilized till March 31 2020 (also refer note [22(h)] to the standalone financialstatements). Pending utilization the funds aggregating to Rs 1130 crores were used forpurposes other than for which they were raised by temporarily investing in mutual fundsand fixed deposits.

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

(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to register under section 45-IA of the Reserve Bank of India Act1934.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No.: 101248W/W-100022
YEZDI NAGPOREWALLA
Partner
Place: Mumbai Membership No. 049265
Date: 15 June 2020 UDIN - 20049265AAAAAP9940

Annexure B to the Independent Auditors' Report 31 March 2020

Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013

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

Qualified Opinion

We have audited the internal financial controls with reference to financial statementsof Tata Motors Limited ('the Company') as of 31 March 2020 in conjunction with our auditof the standalone financial statements of the Company for the year ended on that datewhich includes internal financial controls with reference to financial statements of theCompany's joint operations which are companies incorporated in India.

In our opinion except for the possible effects of the material weakness describedbelow on the achievement of the objectives of the control criteria the Company and itsjoint operations which are companies incorporated in India have maintained in allmaterial respects adequate internal financial controls with reference to financialstatements and such internal financial controls with reference to financial statementswere operating effectively as at 31 March 2020 based on the internal financial controlswith reference to financial statements criteria established by the Company and its jointoperations considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India (the "Guidance Note').

We have considered the material weakness identified and reported below in determiningthe nature timing and extent of audit tests applied in our audit of the 31 March 2020standalone financial statements of the Company and the material weakness does not affectour opinion on the standalone financial statements of the Company.

Basis for Qualified Opinion

According to the information and explanations given to us and based on our audit amaterial weakness has been identified in the Company's internal financial controls withreference to financial statements as at 31 March 2020 related to preservation ofdocumentary evidence of the input/output parameters used in extracting system generatedreports to validate the controls over the completeness and accuracy of information usedin various process Level and management review controls.

A 'material weakness' is a deficiency or a combination of deficiencies in internalfinancial control with reference to financial statements such that there is a reasonablepossibility that a material misstatement of the company's annual or interim financialstatements will not be prevented or detected on a timely basis.

Management's Responsibility for Internal Financial Controls

The respective Company's management and the Board of Directors are responsible forestablishing and maintaining internal financial controls based on the internal financialcontrols with reference to financial statements criteria established by the respectivecompanies considering the essential components of internal control stated in the GuidanceNote. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to the respectivecompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013(hereinafter referred to as "the Act').

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained and the audit evidence obtained bythe other auditor of a joint operation in terms of their report referred in the OtherMatter paragraph below is sufficient and appropriate to provide a basis for our qualifiedaudit opinion on the internal financial controls with reference to standalone financialstatements.

Meaning of Internal Financial controls with Reference to Financial Statements

A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reLiability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial controls with Reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Other Matter

Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operatingeffectiveness of the internal financial controls with reference to standalone financialstatements in so far as it relates to one joint operation which is a company incorporatedin India is based solely on the corresponding report of the other auditor.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No.: 101248W/W-100022
yezdi nagporewalla
Partner
Place: Mumbai Membership No. 049265
Date: 15 June 2020 UDIN - 20049265AAAAAP9940

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