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174
Sixty-Seventh Annual Report 2011-2012
NOTESFORMINGPARTOFCONSOLIDATEDFINANCIALSTATEMENTS
1.
Basisof consolidationandsignificant accountingpolicies
(I)
Basis of consolidation:
The consolidated financial statements relate toTataMotors Limited (the Company), its subsidiary companies, joint ventures andassociates.The Company
and its subsidiaries constitute the Group.
(a)
Basisof preparation
The financial statements are prepared under the historical cost convention on an accrual basis of accounting in accordance with the generally accepted
accounting principles, Accounting Standards notified under Section 211 (3C) of the Companies Act, 1956 and the relevant provisions thereof.
(b)
Use of estimates
The preparation of financial statements requires management tomake judgments, estimates and assumptions, that affect the application of accounting
policies and the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of these financial statements and the
reported amounts of revenues and expenses for the years presented. Actual results may differ from these estimates. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and
future periods affected.
(c)
Principlesof consolidation:
The consolidated financial statements have been prepared on the following basis:
i.
The financial statements of the subsidiary companies / joint ventures used in the consolidation are drawn upto the same reporting date as of the
Company i.e. year ended March 31, 2012.
ii.
The financial statements of the Company and its subsidiary companies have been combined on a line-by-line basis by adding together like items
of assets, liabilities, income and expenses. The intra-group balances and intra-group transactions and unrealised profits have been fully eliminated.
iii.
The consolidated financial statements include the share of profit / loss of the associate companies which has been accounted as per the 'Equity
method', and accordingly, the share of profit / loss of each of the associate companies (the loss being restricted to the cost of investment) has
been added to / deducted from the cost of investments.
An associate is an enterprise in which the investor has significant influence and which is neither a Subsidiary nor a joint venture of the investor.
iv.
The financial statements of the joint venture companies have been combined by using proportionate consolidation method and accordingly,
venturer's share of each of the assets, liabilities, income and expenses of jointly controlled entity is reported as separate line items in the
Consolidated Financial Statements.
v.
The excess of cost to the Company of its investments in the subsidiary companies / joint ventures over its share of equity of the subsidiary
companies / joint ventures, at the dates on which the investments in the subsidiary companies / joint ventures are made, is recognised as
'Goodwill' being an asset in the consolidated financial statements. Alternatively, where the share of equity in the subsidiary companies / joint
ventures as on the date of investment is in excess of cost of investment of the Company, it is recognised as 'Capital Reserve' and shown under
the head 'Reserves and Surplus', in the consolidated financial statements.
vi.
Minority interest in the net assets of consolidated subsidiaries consists of the amount of equity attributable to the minority shareholders at the
dates onwhich investments aremade by the Company in the subsidiary companies and further movements in their share in the equity, subsequent
to the dates of investments as stated above.
(d)
The following subsidiary companies are considered in the consolidated financial statements:
%of holdingeither directlyor
throughsubsidiaries
Countryof
As at
As at
incorporation
March 31,
March31,
Sr No.
Nameof thesubsidiarycompany
2012
2011
Direct subsidiaries
1
Tata Daewoo Commercial Vehicle Co. Ltd
South Korea
100
100
2
TML Drivelines Ltd
(formerly known as HV Axles Ltd)
India
100
85
3
HV Transmissions Ltd.
(merged with TML Drivelines Ltd )
India
-
85
4
TALManufacturing Solutions Ltd
India
100
100
5
Sheba Properties Ltd
India
100
100
6
Concorde Motors (India) Ltd
India
100
100
7
Tata Motors Insurance Broking & Advisory Services Ltd
India
100
100
8
TataMotors EuropeanTechnical Centre Plc
UK
100
100
9
TataTechnologies Ltd
India
72.41
83.38
10
TataMotors Finance Ltd
India
100
100
11
TataMarcopoloMotors Ltd
India
51
51
12
TataMotors (Thailand) Ltd
Thailand
90.82
86.78
13
TML Holdings Pte Ltd, Singapore
Singapore
100
100
14
TML Distribution Company Ltd
India
100
100
15
Tata Motors (SA) (Proprietary) Ltd
South Africa
60
60
16
Tata HispanoMotors Carrocera S.A
Spain
100
100
17
Trilix S.r.l
Italy
80
80
18
Tata Precision Industries Pte Ltd
Singapore
78.39
78.39
19
PT Tata Motors Indonesia
(incorporated on December 29, 2011)
Indonesia
100
-