AUDITORS
TO THE MEMBERS OF TATA STEEL LIMITED
1. We have audited the attached Balance Sheet of TATA STEEL LIMITED ("the
Company") as at 31 March, 2012, the Statement of Profit and Loss 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 misstatement. 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
that:
(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 Statement of Profit and Loss 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 Statement of Profit and Loss 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 financial statements 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 31
March, 2012;
(ii) in the case of the Statement of Profit and Loss, 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 and taken on
record by the Board of Directors, none of the Directors is disqualified as on 31 March,
2012 from being appointed as a director in terms of Section 274(1)(g) of the Companies
Act, 1956.
For DELOITTE HASKINS & SELLS
Chartered Accountants
(Registration No.117366W)
N. VENKATRAM
Partner
(Membership No. 71387) MUMBAI, 18 May, 2012
Annexure to the Auditors' Report
[Referred to in paragraph (3) of our report of even date]
(i) Having regard to the nature of the Company's business/activities/result, clauses
(x), (xii), (xiii) and (xiv) of CARO are not applicable.
(ii) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of the fixed assets.
(b) Some of 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 explanations 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 has, in our opinion,
not affected the going concern status of the Company.
(iii) In respect of its inventory:
(a) As explained to us, the inventories of finished and semi-finished goods and raw
materials at Works, Mines and Collieries were physically verified during the year by the
Management. In respect to stores and spare parts and stocks at stockyards and with
consignment/conversion agents, the Company has a programme of verification of stocks over
a three year period. In our opinion, having regard to the nature and location of the
stocks, the frequency of verification is reasonable. In case of materials lying with third
parties, certificates confirming stocks have been received for stocks held.
(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 has maintained proper records of its inventories and no material discrepancies
were noticed on physical verification.
(iv) In respect of loans, secured or unsecured, granted by the Company to companies,
firms or other parties covered in the Register under Section 301 of the Companies Act,
1956, according to the information and explanations given to us:
(a) The Company has granted loans aggregating Rs.167.22 crores to one party during the
year. At the year-end, there is no balance outstanding and the maximum amount involved
during the year was Rs. 3,720.38 crores.
(b) The rate of interest and other terms and conditions of such loans are, in our
opinion, prima facie not prejudicial to the interests of the Company.
(c) The receipts of principal amounts and interest have been regular/as per
stipulations.
(d) There were no loans outstanding as at the year-end, and therefore clause (iii) (d)
of paragraph 4 of CARO is not applicable.
The Company has not taken any loans, secured or unsecured, from companies, firms or
other parties covered in the Register maintained under Section 301 of the Companies Act,
1956. Accordingly, clauses (iii) (e) to (iii) (g) of paragraph 4 of CARO are not
applicable.
(v) In our opinion and according to the information and explanations given to us,
having regard to the explanations that some of the items purchased are of special nature
and suitable alternative sources are not readily available for obtaining comparable
quotations, there is an adequate internal control system commensurate with the size of the
Company and the nature of its business with regard to purchases of inventory and fixed
assets and the sale of goods and services. During the course of our audit, we have not
observed any major weakness in such internal control system.
(vi) In respect of contracts or arrangements entered in the Register maintained in
pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and
belief and according to the information and explanations given to us:
(a) The particulars of contracts or arrangements referred to Section 301 that needed to
be entered in the Register maintained under the said Section have been so entered.
(b) Where each of such transaction is in excess of Rs.5 lakhs in respect of any party,
the transactions have been made at prices which are prima facie reasonable having regard
to the prevailing market prices at the relevant time.
(vii) In our opinion and according to the information and explanations given to us, the
Company has complied with the provisions of Sections 58A and 58AA or any other relevant
provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules,
1975 with regard to the deposits accepted from the public. According to the information
and explanations given to us, no order has been passed by the Company Law Board or the
National Company Law Tribunal or the Reserve Bank of India or any Court or any other
Tribunal.
(viii) In our opinion, the Company has an adequate internal audit system commensurate
with the size and the nature of its business.
(ix) We have broadly reviewed the cost records maintained by the Company pursuant to
the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government
under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie
the prescribed cost records have been maintained. We have, however, not made a detailed
examination of the records with a view to determining whether they are accurate or
complete.
(x) According to the information and explanations given to us in respect of statutory
dues:
(a) The Company has generally been regular in depositing undisputed dues, including
Provident Fund, Investor Education and Protection Fund, Income-tax, Sales Tax, Wealth Tax,
Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable
to it with the appropriate authorities. We are informed that the Company intends to obtain
exemption from operations of Employees' State Insurance Act at all locations and necessary
steps have been taken by the Company. We are also informed that actions taken by the
authorities at some locations to bring the employees of the Company under the Employees'
State Insurance Scheme has been contested by the Company and full payment has not been
made of the contributions demanded.
(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax,
Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31
March, 2012 for a period of more than six months from the date they became payable, except
for collection of sales tax which we are informed are refundable to customers because they
have been collected in excess or which have been collected pending receipt of necessary
certificates from the customers.
(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty and Cess which have not been deposited as on 31 March, 2012 on account of
disputes are given below:
(xi) In our opinion and according to the information and explanations given to us, the
Company has not defaulted in the repayment of dues to banks, financial institutions and
debenture holders.
(xii) In our opinion and according to the information and explanations given to us, the
terms and conditions of the guarantees given by the Company for loans taken by others from
banks and financial institutions are not prima facie prejudicial to the interests of the
Company.
(xiii) In our opinion and according to the information and explanations given to us,
the term loans have been applied for the purposes for which they were obtained, other than
temporary deployment pending application.
(xiv) In our opinion and according to the information and explanations given to us and
on an overall examination of the Balance Sheet, we report that funds raised on short-term
basis have not been used during the year for long- term investment.
(xv) According to the information and explanations given to us, the Company has not
made preferential allotment of shares to parties and companies covered in the Register
maintained under Section 301 of the Companies Act, 1956.
(xvi) According to the information and explanations given to us, during the period
covered by our audit report, the Company had issued unsecured debentures which did not
require creation of any charge or security.
(xvii) The Management has disclosed the end use of money raised by public issue during
the previous year, in Note 2 to the financial statements and we have verified the same.
(xviii) To the best of our knowledge and according to the information and explanations
given to us, no fraud by the Company and no material fraud on the Company has been noticed
or reported during the year.
(Registration No. 117366W)
N. VENKATRAM
(Membership No. 71387)