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F-3
ANNEXURE “A”TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph 1(f) under‘Report on Other Legal and Regulatory Requirements’section of our report of even date to the Members of Tata
Motors Limited)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013
(“the Act”)
We have audited the internal financial controls over financial reporting of
TATA MOTORS LIMITED
(“the Company”) as of March 31, 2017 in conjunction with
our audit of the standalone Ind AS financial statements of the Company for the year ended on that date which includes internal financial controls over financial
reporting of the Company’s Joint Operations which are companies incorporated in India.
Management’s Responsibility for Internal Financial Controls
The respective Boards of Directors of the Company and its Joint Operation Companies incorporated in India are responsible for establishing and maintaining
internal financial controls based on the internal control over financial reporting criteria established by the respective companies considering the essential
components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating
effectively for ensuring the orderly and efficient conduct of its business, including adherence to respective company’s policies, the safeguarding of its assets,
the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial
information, as required under the Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Company and its Joint Operation Companies
incorporated in India based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of
the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting
was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and
their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls
over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls
system over financial reporting of the Company and its Joint Operation Companies incorporated in India.
Meaning of Internal Financial Controls Over Financial Reporting
A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial
control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention
or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override
of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls
over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.