Management Discussion and Analysis

Some significant features of the internal control of systems are:

  1. The Audit Committee of the Board of Directors, comprising of independent directors and functional since August 1988, regularly reviews the audit plans, significant audit findings, adequacy of internal controls, compliance with accounting standards as well as reasons for changes in accounting policies and practices, if any;
  2. Documentation of major business processes and testing thereof including financial closing, computer controls and entity level controls, as part of compliance programme towards SarbanesOxley Act, as required by the listing requirements at New York Stock Exchange;
  3. An ongoing programme, for the reinforcement of the Tata Code of Conduct is prevalent across the organization. The Code covers integrity of financial reporting, ethical conduct, regulatory compliance, conflicts of interest’s review and reporting of concerns.
  4. State-of-the-art Enterprise Resource Planning, supplier relations management and customer relations management connect the Company’s different locations, dealers and vendors for efficient and seamless information exchange. The Company also maintains a comprehensive information security policy and undertakes continuous upgrades to its IT systems;
  5. Detailed business plans for each segment, investment strategies, year-on-year reviews, annual financial and operating plans and monthly monitoring are part of the established practices for all operating and service functions;
  6. A well-established, independent, multi-disciplinary Internal Audit team operates in line with governance best practices. It reviews and reports to management and the Audit Committee about compliance with internal controls and the efficiency and effectiveness of operations as well as the key process risks. The scope and authority of the Internal Audit division is derived from the Internal Audit Charter, duly approved by the Audit Committee; and Anti-fraud programmes including whistle blower mechanisms are operative across the Company

The Board takes responsibility for the overall process of risk management throughout the organization. Through an Enterprise Risk Management programme, the Company’s business units and corporate functions address risks through an institutionalized approach aligned to the Company’s objectives. This is facilitated by internal audit. The Business risk is managed through crossfunctional involvement and communication across businesses. The results of the risk assessment are presented to the senior management. The Risk Management Committee reviews business risk areas covering operational, financial, strategic and regulatory risks.

During FY 2018-19, the Company conducted an assessment of the effectiveness of the Internal Control over Financial Reporting and has determined that the Company’s Internal Control over Financial Reporting for Tata Motors Limited, its subsidiary companies, its joint operation companies, its associates and joint ventures which are companies incorporated in India as at March 31, 2019 is effective.

The Company identified certain control weaknesses in its subsidiary Jaguar Land Rover during FY 2018-19. The management has performed additional procedures and confirmed that there are no material misstatements in the financial statement. However, the Company’s annual report in Form 20-F to be submitted to Securities Exchange Commission, USA is being finalized and hence the final assessment and reporting of internal control over financial reporting, for Jaguar Land Rover is pending.