You are on page 1of 45

What are the different Methods of venture capital?

Methods of venture capital financing : 1. Equity participation . 2. Conventional loan. 3. Conditional loan. 4. Income notes. Equity participation:Venture Capital Firm participate in equity through direct purchase of shares but their stake does not exceed 49%. these shares are sold either to the promoter at negotiated price under buy back agreement or to the public in the secondary market at a profit. Conventional loan:Under this form of assisstance, a lower fixed rate of interest is charged till the assissted units become commercially operational, after which the loan carries normal or higher rate of interest. The loan has to be repaid according to a predetermined schedule of repayment as per terms of loan agreement. Contional loan:Under this form of finance , an interest free loan is provided during the implementation period but it has to pay royalty on sales. The loan as to be paid according to a pre determined schedule as soon as the company is able to generate sales and income . Income notes:Its is the combination of conventional and conditional loans. But interest and royalty are payable at much lower rates than in case of conditional loans. The venture capital firms are incoporated in india and they are promoted either by all financial institution like IDBI, ICICI, IFCI, State level ffinancial institutions, public sector bank .

The present venture capital players can be broadly classified into the following four categoris:1. Companies promoted by all india finanicial institutions. 2. Companies promoted by state financial institution. 3. Companies promotd by banks. 4. Companies in private sector

1. Companies promoted by all india FIs:-

Venture capital division od IDBI. Risk capital and technology finance coporation Ltd.(RCTC)(subsidiary of IFCI). Technologydevelopment and information company of india Ltd.(TDICI), (promoted by ICICI &UTI). 2. Companies promoted by state FI:-

Gujarat venture finance Ltd.(promoted by GUC). Andhra pradesh industrial development corporation venture capital Ltd. (promoted by APIDC). 3. Companies promoted by banks:-

Can bank venture fund (promoted by canfina and canara bank ). SBI venture capital fund (promoted by SBI caps). Indian investment fund (promoted by Grindlays Bank). Infrastucture Leasing (promoted by Centrel Bank if India). 4. Companies in private sector:-

Indus venture capital fund (promoted by mafatlals and hindustan lever). Credit capital venture fund (india)ltd. 20th century venture capital corporation ltd. Venture capital fund promoted by V.B Desai & co.

What are the beneifts of credit rating?


1. Low cost information. 2. Quick investment decision . 3. Independent investment decision . 4. Investors protection. Low cost of information:-

Credit rating is a source of low cost information to investors. The collection, processing and analysis of relevant information is done by a specialised agency which a group of investor can trust. Quick investment decision:-

In the present day complex world rating enable investors to take quickest possible decisions based on associated rating. Independent investment decision :-

For rated instruments, investors need not depend upon the advice of financial intermediaries. As the rating symbol suggests the credit worthinesss of the instrument and indicates the degree of risk involved in it, the investors can make direct investment decisions.

Investors protection:-

Hiring of credit agency implies that the management of the company is ready7 to show its operations for independent scruting. So , the investors who are not provided with confidential information can have overall assessment based on ratingd. The creditible and

abjective rating agency can provide increased disclosure, better accounting standard and improved investor protection.

MOST IMPORTANT TOPIC


MUTUAL FUNDS
SPONSOR / TRUSTEE

RESEARCH AND DEVELOPMENT

AMC
REGISTRAR TRANFER AGENT WARRANTS DIV. DECLARE & OTHER SERVICES PROVIDER.

SMALL INVESTORS POOL

From the above diagram it is clear that Mutual Fund is melt for the small investors. It is based on response of Mutual Funds. The sponsor or the trustee is the top most authority. The AMC (Asset Management Company) is the portfolio manager who undertakes the entire research and developmental activity of equity markets. Most of the time it is felt that the AMC is the care

taker and portfolio manager of the funds of the small investor. AMC charges specific % on total fund managed.(maximum 2.5% up to 1.25% minimum). Some basic function of Indian mutual funds: AMFI association of mutual fund of Indian is the guiding authority for India slowly guiding become the controlling authority in future. Indian mutual fund industry has invested around 9lacs Crore in the capital market. Reliance and the group allowance in controlling over 1, 10,000 cr. of mutual fund industry. ICICI, HDFC, TEMPLETANT etc. or some of the leading mutual fund who have net worth to the turns of 90,000 cr. Indian mutual fund industry had been growing year after year but computation had been also growing. Specialize in mutual fund have been encourage and then there are so many mutual who are specialized them self. In the area of infrastructure, software, FMCG, Consumer durable etc. Mutual funds have combination of share and bonds. Normally 60% invested on shares and bonds

INFOSYS LIMITED (FORMERLY INFOSYS TECHNOLOGIES LIMITED) ANNUAL REPORT 2011-2012 AUDITORS` REPORT To The Members of Infosys Limited (formerly Infosys Technologies Limited) Report on the Financial Statements: We have audited the accompanying financial statements of Infosys Limited (`the Company`) which comprise the Balance Sheet as at 31 March 2012, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information. Management`s Responsibility for the Financial Statements: Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor`s Responsibility: Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor`s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company`s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained appropriate to provide a basis for our audit opinion. Opinion: In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: is sufficient and

(i) In the case of the Balance Sheet, of the state Company as at 31 March 2012;

of

affairs

of

the

(ii) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and (iii) In the case of the Cash Flow Statement, of the cash flows year ended on that date. Report on Other Legal and Regulatory Requirements: 1. As required by the Companies Order"), as amended, issued by the sub-section (4A) of section 227 statement on the matters specified (Auditor`s Report) Order, 2003 ("the Central Government of India in terms of of the Act, we give in the Annexure a in paragraphs 4 and 5 of the Order. for the

2. As required by section 227(3) of the Act, 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 purpose of our audit; b. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; c. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account; d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956; and e. On the basis of written representations received from the directors as on 31 March 2012, 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 clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. For B S R & Co. Chartered Accountants Firm`s registration number: 101248W Natrajh Ramakrishna Partner Membership number: 32815 Place: Bangalore Date : 13th April, 2012. ANNEXURE TO THE AUDITORS` REPORT The Annexure referred to in our report to the members of Infosys Limited (`the Company`) (formerly Infosys Technologies Limited) for the year ended 31 March 2012. We report that: (i)(a) The Company has maintained proper records showing full including quantitative details and situation of fixed assets. particulars,

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the

nature of its assets. (c) Fixed assets disposed off during the year were not therefore, do not affect the going concern assumption. substantial, and

(ii) The Company is a service company, primarily rendering information technology services. Accordingly, it does not hold any physical inventories. Thus, paragraph 4(ii) of the Order is not applicable. (iii)(a) The Company has granted a loan to a body corporate covered in the register maintained under section 301 of the Companies Act, 1956 (`the Act`). The maximum amount outstanding during the year was Rs. 269,565,993 and the year-end balance of such loan amounted to Rs. 1,239,007. Other than the above, the Company has not granted any loans, secured or unsecured, to companies, firms or parties covered in the register maintained under section 301 of the Act. (b) In our opinion, the rate of interest and other terms and conditions on which the loan has been granted to the body corporate listed in the register maintained under Section 301 of the Act are not, prima facie, prejudicial to the interest of the Company. (c) In the case of the loan granted to the body corporate listed in the register maintained under section 301 of the Act, the borrower has been regular in the payment of the interest as stipulated. The terms of arrangement do not stipulate any repayment schedule and the loan is repayable on demand. Accordingly, paragraph 4(iii)(c) of the Order is not applicable to the Company in respect of repayment of the principal amount. (d) There are no overdue amounts of more than rupees one lakh in respect of the loan granted to a body corporate listed in the register maintained under section 301 of the Act. (e) The Company has not taken any loans, secured or unsecured from companies, firms or parties covered in the register maintained under section 301 of the Act. Accordingly, paragraphs 4(iii)(e) to 4(iii)(g) of the Order are not applicable. (iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and sale of services. The activities of the Company do not involve purchase of inventory and the sale of goods. We have not observed any major weakness in the internal control system during the course of the audit. (v)(a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section. (b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (v)(a) above and exceeding the value of Rs 5 lakh with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time. (vi) The Company has not accepted any deposits from the public. (vii) In our opinion, the Company has an internal audit system commensurate with the size and the nature of its business. (viii) The Central Government of India has not prescribed the maintenance

of cost records under Section 209(1)(d) of the Act for any of the rendered by the Company.

services

(ix)(a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income-tax, Sales-tax, Wealth tax, Service tax and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Employees` State Insurance, Customs duty and Excise duty. According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Income-tax, Sales-tax, Wealth tax, Service tax and other material statutory dues were in arrears as at 31 March 2012 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us, there are no material dues of Wealth tax and Cess which have not been deposited with the appropriate authorities on account of any dispute. However, according to information and explanations given to us, the following dues of Income tax, Sales tax, and Service tax, have not been deposited by the Company on account of disputes: Name of the statute Nature of dues Amount (in Rs.) Period to which the amount relates Assessment year 2006-2007 Assessment year 2009-2010 July 2004 to October 2005 January 2005 to March 2009 February 2007 to March 2009 April 2009 to March 2010 April 2006 to March 2007 Forum where dispute is pending CIT (Appeals), Bangalore CIT (Appeals), Bangalore CESTAT, Bangalore CESTATBangalore CESTATBangalore Commissioner, Bangalore Sales tax appellate Tribunal, Andhra Pradesh High Court of Andhra Pradesh High Court of Karnataka demanded

Income Tax Act, 1961 Income Tax Act, 1961 Service tax Service tax Service tax

Interest on Income tax demanded Demand under section 156 Service tax demanded Service tax demanded Service tax and penalty demanded Service tax demanded Inter-state sales demanded Sales tax demanded Sales tax, interest and

5,084,704

73,025,295# 57,563,973# 25,784,864# 231,520,178

Service tax APVAT Act, 2005

41,972,658 417,650

APVAT Act, 2005 KVAT Act, 2003

3,112,450# 245,343,982*#

April 2007 to March 2008 April 2005 to March 2009

MVAT Act, 2002

penalty Excess refund along with interest demanded. Irregular availment of CENVAT credit

1,320,455#

January 2006 to December 2007

Deputy commissioner sales tax, Pune

CENVAT Rules, 2004

111,413,495#

October 2004 to March 2009

CESTAT, Credit Bangalore

* Net of amounts paid under protest. # a stay deposited. order has been received against the amount disputed and not

(x) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year. (xi) The Company did not have any outstanding dues to institution, banks or debenture holders during the year. any financial of

(xii) The Company has not granted any loans and advances on the basis security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund/ nidhi/ mutual benefit fund/ society. (xiv) According to the information and explanations given to us, Company is not dealing or trading in shares, securities, debentures other investments. the and

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. (xvi) The Company did not have any term loans outstanding during the year. (xvii) The Company has not raised any funds on short-term basis. (xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act. (xix) The Company did not have any outstanding debentures during the year. (xx) The Company has not raised any money by public issues during the year. (xxi) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit. For B S R & Co. Chartered Accountants Firm`s registration number: 101248W Natrajh Ramakrishna Partner Membership number: 32815

Place: Bangalore Date : 13th April, 2012.

Auditor's Report (Indian Hotels Company)

Year End : Mar

1. We have audited the attached Balance Sheet of THE INDIAN HOTELS COMPANY LIMITED (the Company) as at March 31, 2010, the Profit and Loss Account 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 Companys 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 misstatements. 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 (Auditors 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 as follows: (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 Profit and Loss Account 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 Profit and Loss Account 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 accounts 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 March 31, 2010; (ii) in the case of the Profit and Loss Account, 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 as on 31st March, 2010, taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956. ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our report of even date) (i) Having regard to the nature of the Companys business/activities/result/transactions, etc. clauses (viii), (x), (xiii) and (xiv) of paragraph 4 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. The fixed asset records of the Taj Mahal Palace & Tower, Mumbai have not been updated, as pursuant to the terrorist attack in November 2008, the Unit is in the process of restoration of its property, which is covered by a reinstatement policy. The records, we are informed, will be updated only after the insurance claim for reinstatement has been settled. (b) Physical verification of fixed assets has been carried out by the Management at most of the Units in accordance with a programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. We have been informed that the reconciliation of assets verified with the fixed assets register is still in progress at some of the Units. Discrepancies, if any, arising out of verification and reconciliation are yet to be determined. (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 were physically verified during

the year by the Management at reasonable intervals. (b) In our opinion and according to the information and explanations 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) According to the information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the Register under Section 301 of the Companies Act, 1956. (v) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for 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) There were no transactions in excess of Rs. 5 lakhs each in respect of any party during the year. (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 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 of the Company and the nature of its business. (ix) 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, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues with the appropriate authorities.

(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 31st March, 2010 for a period of more than six months from the date they became payable. (c) Details of dues of Sales Tax and Service Tax which have not been deposited as on 31st March, 2010 on account of disputes are given below: Name of Statute Nature of Dues Sales Tax Amount (Rs.in crores) 0.25 7.72 of various states 0.07 0.03 0.10 0.27 0.23 0.75 0.05 2000-2001/ 2002-2003 2004-05 1992-95 1995-96 1996-98 2001-2002/ 2005-2007 2004-05 Period to which the amount relates 1997-98 2000-03

Central Sales Tax Act, 1956 and Sales Tax Act

Name of Statue Central Sales Tax Act, 1956 ans Sales Tax Act of various states

Forum where dispute is pending Maharashtra Sales Tax Tibunal Joint Commissioner of Sales Tax Additional Commissioner of Sales Tax (Appeals) Deputy Commissioner of Sales Tax (Appeals) Tribunal Appellate Board Appellate & Revision Board

Deputy Commissioner of Commercial Taxes Assistant Commissioner of Sales Tax (Appeals) Name of Statute Nature of Dues Service Tax Amount (Rs.in crores) 0.05 0.33 0.59 1.10 Total Name of the Statue Finance Act 1944 11.54 Forum where dispute is pending Assistant Commissioner of Service Tax (Appeals) Joint Commissioner of Service Tax (Appeals) Central Excise Service Tax Appellate Tribunal Service Tax Department, New Delhi (x) 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. (xi) In our opinion and according to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. (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 Period to which the amount relates 2000-05 2003-06 2002-04 2002-07

Finance Act, 1994

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 any preferential allotment of shares to parties and companies/firms 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 3,000 2% Secured Non-Convertible debentures of Rs. 10 lakhs each. The Company is in the process of creating security for these debentures within the prescribed time frame. (xvii) We have verified the end use of money raised by the Rights Issue of simultaneous but unlinked issue of Equity Shares and Non Convertible Debentures as disclosed in Note 3 of Schedule 14 Notes to the Balance Sheet and the Profit and Loss Account. (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. For DELOITTE HASKINS & SELLS Chartered Accountants (Registration No. 117366W) Nalin M. Shah Partner (Membership No.15860) MUMBAI, 26th May, 2010 For N. M. RAIJI & CO. Chartered Accountants (Registration No. 108296W) Vinay D. Balse Partner (Membership No. 39434)

AUDITOR'S REPORT : The Shareholders of Abirami Financial Services (India) Limited. We have examined the attached Balance Sheet of ABIRAMI FINANCIAL SERVICES (INDIA) LIMITED as at 31st March 2012 and the annexed Profit and Loss Account for the year ended on that date. 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.

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 misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit includes assessing the accounting principles used and 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.

As required by the Companies Auditor's Report Order, 2003 issued by the Company Law Board in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in the said order.

Further to the comments in the annexure referred to paragraph 3 above, we report that:

1. 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. 2. In our opinion, the Company has kept proper books of account as required by law so far as it appears from our examination of such books. 3. The Balance Sheet and the Profit and Loss Account dealt with by this report are in agreement with the books of account. 4. As per the information and explanations given to us and on the basis of the written representation received from Directors, we report that none of the directors of the company

are prima facie disqualified from being appointed as directors of the Company as at 31st March 2011, in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956. 5. The said profit and loss account and the balance sheet comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956. 6. In our opinion and to the best of our information and according to the explanations furnished to us, the accounts read with the notes thereon give the information required by the Companies Act, 1956 in the manner so required, give a true and fair view in conformity with the accounting principles generally accepted in India.

31

In the case of Balance Sheet of the state of affairs of the Company as at March, 2012 In the case of the Profit and Loss Account, Profit for the year ended on that date.

ANNEXURE TO PARA 3 OF THE COMPANIES AUDITOR'S REPORT ORDER, 2003

1. (a) The Company has maintained proper records of fixed assets showing full particulars including quantitative details and location.

(b) The Company has a regular programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. In accordance with this programme, fixed assets have been physically verified by the management during the year and no material discrepancies have been identified on such verification. (c) The Company has not during the year disposed off a substantial part of its Fixed Assets.

2. (a) The Company, being Non-Banking Financial Company, does not have any inventory. 3. (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the register maintained under section 301 of the Act.

4. In our opinion, the company has an internal control system commensurate with the size of the company and the nature of its business for purchase of inventory and fixed assets and for the sale of goods and services. 5. a) The particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required and these transactions have been entered in the prevailing market rates. 6. The company has not accepted any deposits from the public during the year of audit to which provisions of section 58A and 58 AA of The Companies Act, 1956 are applicable. 7. The company has an internal audit system commensurate with its size and the nature of its business. 8. According to the information and explanation given to us maintenance of cost records are not applicable to the company. 9. (a) According to the information and explanation given to us the company is regular in depositing undisputed statutory dues including income tax, Sales tax, etc to the appropriate authorities. 10. As the Company has not incurred any cash loss this clause is not applicable to the company. 11. According to the information and explanations given to us and to the extent of our examination of the records of the company it has not defaulted on repayment of dues to the financial institution or bank. 12. The company has granted loans on the basis of any security and proper records of the same are maintained. 13. The company is not a Chit Fund, and hence this clause is not applicable to the company. 14. As the company is dealing in shares, securities and proper records have been maintained of the transactions and contracts and timely entries have been made therein. The investments have been held by the company, in its own name. 15. As the company has not given any guarantee and hence this clause is not applicable to the company. 16. The company has not availed any term loan except corporate borrowings.

17. In so far as our examination of the books of accounts the company has not applied Short Term Funds for Long Term purposes. 18. The company has not made any preferential allotment of shares. 19. Debentures have not been issued by the company. 20. No public money has been raised during the year of audit. 21. There is no fraud on or by the company has been noticed or reported during the year. 22. We further report that the company is engaged in the business of Non Banking Financial Institution and it has obtained a Certificate of Registration. 23. Company has fulfilled the norms in terms of Assets/Income pattern as on 31st March 2011. 24. Based on the criteria set forth by RBI, the company is not an AFC. 25. The Board of Directors have passed a resolution for Non-acceptance of any public deposits and the company has not accepted the same during the financial year ended 31st March 2012. 26. The company has complied with the prudential norms relating to income recognition, accounting standards, asset classification and provisioning for bad and doubtful debts as applicable to it in terms of Non-Banking Financial (Non- Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007.

Chennai - 17 03/05/2012

For R.Bhaskar & Co., Chartered Accountants F.No.008860S R.Bhaskar, Properietor M.No.026584

We have audited the attached Balance Sheet of TATA MOTORS LIMITED (the Company) as at March 31, 2012, the Profit and Loss Statement 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 misstatements. 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 as follows: (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 Profit and Loss Statement 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 Profit and Loss Statement 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 accounts 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 March 31, 2012; (ii) in the case of the Profit and Loss Statement, 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 as on March 31, 2012 taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2012 from being appointed as a director in terms of Section 274(1) (g) of the Companies Act, 1956. ANNEXURE TO THE AUDITORS'' REPORT (Referred to in paragraph 3 of our report of even date) (i) The nature of the Company''s business activities during the year are such that clauses (xiii), and (xiv) of paragraph 4 of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company. (ii) In respect of its fixed assets: (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets; (b) 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 explanation 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, in our opinion, has not affected the going concern status of the Company. (iii) In respect of its inventory: (a) As explained to us, the stock of finished goods (other than a significant part of the spare parts held for sale) and work-in-progress in the Company''s custody have been physically verified by the Management as at the end of the financial year, before the year- end or after the year-end, and in respect of stocks of stores and spares, the aforesaid spare parts held for sale, and raw materials in the Company''s custody, there is a perpetual inventory system and a substantial portion of the stocks have been verified during the year. In our opinion, the frequency of verification is reasonable. In case of materials and spare parts held for sale lying with the third parties, certificates confirming stocks have been received in respect of a substantial portion of the stocks held during the year or at the year-end; (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 is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of the operations of the Company and have been properly dealt with in the

books of account. (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 unsecured loans aggregating Rs.521.33 Crores to four parties covered in the register maintained under Section 301 of the Companies Act, 1956 (including Rs.86.92 Crores granted during the year to two parties). At the year- end, the outstanding balances of such loans aggregated Rs.579.36 Crores and maximum amount outstanding during the year was Rs. 579.36 Crores. (b) the rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interest of the Company having regard to the market yields and the business relationship with the Company to whom loans have been granted. (c) The receipts of principal amount have been as per stipulations. However, there have been delays in receipts of interest. (d) There are no overdue amounts in respect of principal amount outstanding. In respect of overdue interest amounts of more than rupees one lakh remaining outstanding as at the year-end, except in respect of interest outstanding from a subsidiary company for which the provision has been made, the Management has taken reasonable steps for the recovery of the overdue interest amounts. In respect of loans, secured or unsecured, taken by the Company from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us: (e) the Company has taken loans aggregating Rs.11.52 Crores from six parties covered in the Register maintained under Section 301 of the Companies Act, 1956. At the year-end, the outstanding balance of such loans taken aggregated Rs. 0.20 Crores and the maximum amount outstanding during the year was Rs.11.92 Crores. (f ) the rate of interest and other terms and conditions of such loans taken are, in our opinion, prima facie not prejudicial to the interests of the Company. (g) The principal amount is not due for repayment and the Company has been regular in payment of interest. (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 do not exist for obtaining comparable quotations, there exists 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 with regard to 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 rupees five lakhs in respect of any party, and having regard to our comments in para (v) above, 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 cost records with a view to determine 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 with the appropriate authorities undisputed dues, including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it. With regard to the contribution under the Employees'' Deposit Linked Insurance Scheme, 1976 (the Scheme), we are informed that the Company has its own Life Cover Scheme, and consequently, an application has been made seeking an extension of exemption from contribution to the Scheme, which is awaited. (b) There were no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to the Company that were in arrears as at March 31, 2012 for a period of more than six months from the date they became payable. (c) Details of dues of income-tax, sales tax, wealth tax, service tax,

customs duty, excise duty and cess which have not been deposited as on March 31, 2012 on account of any disputes are given below: Nature of the Statute Income Tax Laws Nature of the Dues Income Tax Income Tax Central Excise Laws Excise Duty & Service Tax Excise Duty & Service Tax Excise Duty & Service Tax Excise Duty & Service Tax Excise Duty & Service Tax Sales Tax Laws Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Amount (Rs.in crores) 7.48 45.24 6.53 564.55 77.24 0.20 0.03 13.01 77.52 21.46 0.20 215.79 24.34 1.26 0.07 0.44

Name of the Statue Income Tax Laws

Period to which the amount relates to 1998-99, 1999-00, 2005-06 2003-04 to 2010-11

Forum where Pending Appellate Tribunal Commissioner High Court Appellate Tribunal

Central Excise Laws 2008-09 to 2011-12 2004-05 to 2011-12 1984-85, 1995-96,2003-04, 2006-07 to 2011-12 2011-12

Commissioner (Appeals) Additional Commissioner

2011-12 Sales Tax Laws 1995-96 1984-85 to 1990-91, 1993-94, 1994-95, 1997-98, 2000-01, 2002-03, 2005-06 to 2007-08 1988-89, 1989-90, 1992-93, 1994-95, 1995-96, 1998-99 to 2000-01, 2002-03 to 2007-08, 2010-11 1996-97, 1998-99, 2001-02 1997-98, 1999-00, 2001-02 to 2008-09 1988-89, 1989-90, 1995-96, 1997-98, 2005-06 to 2007-08, 2009-10, 2010-11 1979-80,1994-95 to 1997-98, 2000-01, 2003-04, 2006-07, 2010-11 1986-87, 1995-96, 1997-98, 1988-89, 1990-91, 1999-2000 1995-96, 2000-01, 2001-02, 2004-05, 2006-07, 2007-08, 2009-10

Deputy Commissioner Supreme Court

High Court

Tribunal Commissioner (Appeals)

Joint Commissioner

Additional Commissioner

Deputy Commissioner

Assistant Commissioner

Trade Tax Officer

(xi) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year. (xii) 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. (xiii) Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. Accordingly, the provisions of clause (xv) of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company. (xv) 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. (xvi) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, as at March 31, 2012, we report that funds raised on short term basis of Rs.3,595.61 Crores have been used during the year for long-term investment. Further the Company has explained that steps are being taken to augment long term funds. (xvii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956. (xviii) According to the information and explanations given to us, during the period covered by our audit report, the Company has not issued any secured debentures. . (xix) According to the information and explanations given to us, during the year covered by our audit report, the Company has not raised any money by public issue. (xx) 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. For DELOITTE HASKINS & SELLS Chartered Accountants (Registration No. 117366W) N. VENKATRAM Partner MUMBAI, May 29, 2012. (Membership No.71387)

TO THE MEMBERS OF TATA MOTORS LIMITED 1. We have audited the attached Balance Sheet of TATA MOTORS LIMITED ("theCompany") as at March 31, 2011, the Profit and Loss Account and the Cash FlowStatement of the Company for the year ended on that date, both annexed thereto. Thesefinancial statements are the responsibility of the Company's Management. Ourresponsibility 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 acceptedin India. Those Standards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of material misstatements. Anaudit includes examining, on a test basis, evidence supporting the amounts and thedisclosures in the financial statements. An audit also includes assessing the accountingprinciples used and the significant estimates made by the Management, as well asevaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinion. 3. As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by theCentral Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose inthe 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 reportas follows: (a) we have obtained all the information and explanations which to the best of ourknowledge 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 so far as it appears from our examination of those books; (c) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealtwith by this report are in agreement with the books of account; (d) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash FlowStatement dealt with by this report are in compliance with the Accounting Standardsreferred 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 explanationsgiven to us, the said accounts give the information required by the Companies Act, 1956 inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India: (i) in the case of the Balance Sheet, of the state of affairs of the Company as atMarch 31, 2011; (ii) in the case of the Profit and Loss Account, of the profit of the Company for theyear ended on that date; and (iii) in the case of the Cash Flow Statement, of the cash flows of the Company for theyear ended on that date. 5. On the basis of the written representations received from the Directors as on March31, 2011 taken on record by the Board of Directors, none of the Directors is disqualifiedas on March 31, 2011 from being appointed as a director in terms of Section 274(1) (g) ofthe Companies Act, 1 956. For DELOITTE HASKINS & SELLS Chartered Accountants (Registration No. 117366W) N. VENKATRAM Partner MUMBAI, May 26, 2011 (Membership No.71387)

(Referred to in paragraph 3 of our report of even date) (i) The nature of the Company's business activities during the year are such thatclauses (xiii), and (xiv) of paragraph 4 of the Companies (Auditors' Report) Order, 2003are not applicable to the Company. (ii) In respect of its fixed assets: (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets; (b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification which, in our opinion, provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanation given to us, no material discrepancies were noticed on suchverification; (c) The fixed assets disposed off during the year, in our opinion, do not constitute asubstantial part of the fixed assets of the Company and such disposal, in our opinion, hasnot affected the going concern status of the Company. (iii) In respect of its inventory:

(a) As explained to us, the stock of finished goods (other than a significant part ofthe spare parts held for sale) and work-inprogress in the Company's custody have beenphysically verified by the Management as at the end of the financial year, before theyear-end or after the year-end, and in respect of stocks of stores and spares, theaforesaid spare parts held for sale, and raw materials in the Company's custody, there isa perpetual inventory system and a substantial portion of the stocks have been verifiedduring the year. In our opinion, the frequency of verification is reasonable. In case ofmaterials and spare parts held for sale lying with the third parties, certificatesconfirming stocks have been received in respect of a substantial portion of the stocksheld during the year or at the year-end; (b) In our opinion and according to the information and explanation given to us, theprocedures of physical verification of inventories followed by the Management werereasonable and adequate in relation to the size of the Company and the nature of itsbusiness; (c) In our opinion and according to the information and explanations given to us, theCompany is maintaining proper records of inventory. The discrepancies noticed onverification between the physical stocks and the book records were not material havingregard to the size of the operations of the Company and have been properly dealt with inthe books of account. (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 unsecured loans aggregating T415.24 Crores to four partiescovered in the register maintained under Section 301 of the Companies Act, 1956 (including?174.24 Crores granted during the year to four parties). At the year-end, the outstandingbalances of such loans aggregated T434.41 Crores and maximum amount outstanding during theyear was ? 434.41 Crores. (b) the rate of interest and other terms and conditions of such loans are, in ouropinion, prima facie not prejudicial to the interest of the Company having regard to themarket yields and the business relationship with the Company to whom loans have beengranted. (c) The receipts of principal amounts have been as per stipulations however there havebeen delays in receipts of interests. (d) There are no overdue amounts in respect of principal outstanding. In respect ofoverdue interest amounts of more than rupees one lakh remaining outstanding as at theyear-end, the Management has taken reasonable steps for the recovery of the overdueinterest amounts. In respect of loans, secured or unsecured, taken by the Company from companies, firmsor other parties covered in the Register maintained under Section 301 of the CompaniesAct, 1956, according to the information and explanations given to us: (e) the Company has taken loans aggregating T11.52 Crores from six parties covered inthe Register maintained under Section 301 of the Companies Act, 1956 (including ?1 Crorefrom one party during the year). At the year-end, the outstanding balance of such loanstaken aggregated T11.52 Crores and the maximum amount outstanding during the year wasT18.04 Crores. (f) the rate of interest and other terms and conditions of such loans taken are, in ouropinion,prima facie not prejudicial to the interests of the Company. (g) The principal amount is not due for repayment and the Company has been regular inpayment of interest. (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 natureand suitable alternative sources do not exist for obtaining comparable quotations, thereexists an adequate internal control system commensurate with the size of the Company andthe nature of its business with regard to purchases of inventory and fixed assets and withregard to the sale of goods and services. During the course of our audit, we have notobserved any major weakness in such internal control system. (vi) In respect of contracts or arrangements entered in the register maintained inpursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge andbelief and according to the information and explanations given to us: (a) The particulars of contracts or arrangements referred to Section 301 that needed tobe entered in the register maintained under the said section have been so entered. (b) Where each of such transaction is in excess of rupees five lakhs in respect of anyparty, and having regard to our comments in para (v) above, the transactions have beenmade at prices which are prima facie reasonable having regard to the prevailing marketprices at the relevant time. (vii) In our opinion and according to the information and explanations given to us, theCompany has complied with the provisions of Sections 58A and 58AA or any other relevantprovisions 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 informationand explanations given to us, no order has been passed by the Company Law Board or theNational Company Law Tribunal or the Reserve Bank of India or any Court or any otherTribunal.

(viii) In our opinion, the Company has an adequate internal audit system commensuratewith the size and the nature of its business. (ix) We have broadly reviewed the books of account relating to the manufacture of motorvehicles pursuant to the Rules made by the Central Government for the maintenance of costrecords under Section 209 (1 )(d) of the Companies Act, 1956 and are of the opinion thatprima facie, the prescribed accounts and records have been made and maintained. We have,however, not made a detailed examination of the records with a view to determining whetherthey are accurate or complete. To the best of our knowledge and according to theinformation and explanations given to us, the Central Government has not prescribedmaintenance of cost records for any other product of the Company. (x) According to the information and explanations given to us in respect of statutorydues: (a) The Company has generally been regular in depositing with the appropriateauthorities undisputed dues, including provident fund, investor education and protectionfund, employees' state insurance, income-tax, sales tax, wealth tax, service tax, customsduty, excise duty, cess and other material statutory dues applicable to it. With regard tothe contribution under the Employees' Deposit Linked Insurance Scheme, 1976 (the Scheme),we are informed that the Company has its own Life Cover Scheme, and consequently, anapplication has been made seeking an extension of exemption from contribution to theScheme, which is awaited. Further, since the Central Government has till date notprescribed the amount of cess payable under Section 441 A of the Companies Act, 1 956, weare not in a position to comment upon the regularity or otherwise of the Company indepositing the same. (b) There were no undisputed amounts payable in respect of provident fund, investoreducation and protection fund, employees' state insurance, income-tax, wealth tax, servicetax, customs duty, excise duty, cess and other material statutory dues applicable to theCompany that were in arrears as at March 31, 2011 for a period of more than six monthsfrom the date they became payable. (c) Details of dues of income-tax, sales tax, wealth tax, service tax, customs duty,excise duty and cess which have not been deposited as on March 31, 2011 on account of anydisputes are given below: Name of the Statute Income Tax Laws Nature of the Dues Income Tax Income Tax Central Excise Laws Excise Duty & Service Tax Excise Duty & Service Tax Excise Duty & Service Tax Excise Duty & Service Tax Sales Tax Laws Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Sales Tax Amount (? in crores) 27.94 38.92 0.49 481.22 7.96 0.1 8 1 3.01 574.86 21 .61 0.20 21 6.79 1 6.31 Period to which the amount relates Forum where pending

1 997-98, 2002-03 and 2005-06 Appellate Tribunal 1 984-85, 1 985-86, 1 986-87, 2004-05, 2005-06, Commissioner 2006-07, 2007-08 and 2008-09 201 0-11 High Court 1993-94 to 1994-95,1999-00, 2002-03 2004-05 to Appellate Tribunal 201 0-11 1 984-85, 1 994-95 to 1 995-96, 2003-04, 2006-07 Commissioner to 2007-08 and 2009-10 to 2010-11 (Appeals) 2007-08, 2008-09 Additional Commissioner

1995-96 Supreme Court 1984-85 to 1990-91,1993-94 to 2007-08 High Court 1988-89 to 1989-90, 1992-93, 1995-1996 to1996Appellate Tribunal 97, 1999-2000 to 2000-01, 2004-05 to 2006-07 1 996-97, 1 998-99, 2001 -02 1 997-98 to 2008-09 Commissioner (Appeals) Joint Commissioner

1979-80, 1986-87, 1992-93, 1994-95, 1996-97 Deputy 1998-99 to 2000-01, 2003-04 to 2008-09 Commissioner

1 28.57 1 988-89 to 1 989-90, 1 995-96, 1 997-98, 2005-06 Additional

to 2010-11 Commissioner Sales Tax Sales Tax 0.07 1 .84 1 986-87, 1 988-89, 1 990-91 , 1 995-96, 1 997-98, Assistant 1 999-2000 Commissioner 1986-87, 1990-91 to 1991-92, 1993-94, 1996-97, Trade Tax Officer 1999-2000 to 2001-02

(xi) The Company does not have any accumulated losses at the end of the financial yearand has not incurred cash losses during the financial year covere by our audit and theimmediately preceding financial year. (xii) In our opinion and according to the information and explanations given to us, theCompany has not defaulted in the repayment of dues to bank financial institutions anddebenture holders. (xiii) Based on our examination of the records and the information and explanationsgiven to us, the Company has not granted any loans and advances o the basis of security byway of pledge of shares, debentures and other securities. (xiv) In our opinion and according to the information and explanations given to us, theCompany has not given any guarantee for loans taken by othei from banks or financialinstitutions. Accordingly, the provisions of clause (xv) of Paragraph 4 of the Companies(Auditor's Report) Order, 2003 are nc applicable to the Company. (xv) In our opinion and according to the information and explanations given to us, theterm loans have been applied for the purposes for which they wer obtained. (xvi) In our opinion and according to the information and explanations given to us andon an overall examination of the Balance Sheet of the Company as at March 31, 2011, wereport that funds raised on short term basis of ? 4,797.78 Crores have been used duringthe year for long-term investmen Further the Company has explained that steps are beingtaken to augment long term funds. (xvii) According to the information and explanations given to us, the Company has notmade any preferential allotment of shares to parties and companie covered in the registermaintained under Section 301 of the Companies Act, 1956. (xviii) According to the information and explanations given to us, during the periodcovered by our audit report, the Company has issued 5,000 debenture of Rs 10 lakhs each.The Company has created security in respect of 5,000 debentures issued in the current yearand in respect of 2,000 debenture issued in month of March 2010. (xix) According to the information and explanations given to us, during the yearcovered by our audit report, the Company has not raised any money b public issue. (xx) To the best of our knowledge and according to the information and explanationsgiven to us, no fraud by the Company and no material fraud on th Company has been noticedor reported during the year. For DELOITTE HASKINS & SELLS Chartered Accountants (Registration No. 117366W) N. VENKATRAM Partner MUMBAI, May 26, 2011 (Membership No.71 387)

Auditor's Report (Reliance Industries)

Year End : Mar

1. We have audited the attached Balance Sheet of RELIANCE INDUSTRIES LIMITED as at March 31, 2012, the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date 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 disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by 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 issued by the Central Government of India in terms of sub-section (4A) of Section 227 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 appears from our examination of those books; c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account; d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956. e) On the basis of written representations received from the Directors as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2012 from being appointed as a director in terms of clause (g) of sub section (1) of Section 274 of the Companies Act, 1956; f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and notes thereon 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 March 31, 2012; (ii) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and (iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Annexure to Auditors-Report Referred to in Paragraph 3 of our report of even date 1. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information. b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification. c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected. 2. In respect of its inventories:

a) The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. c) The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book records. 3. In respect of the loans, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956: a) The Company has given loans to two subsidiaries. In respect of the said loans, the maximum amount outstanding at any time during the year was Rs 10,254 crore and the year-end balance is Rs 10,239 crore (including interest free loan of Rs 6,615 crore). b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the

loans given by the Company, are not prima facie prejudicial to the interest of the Company. c) The principal amounts are repayable over a period of three to five years, while the interest is payable annually at the discretion of the Company. d) In respect of the said loans and interest thereon, there are no overdue amounts. e) The Company has not taken any loan during the year from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Consequently, the requirements of Clauses (iii) (f) and (iii) (g) of paragraph 4 of the Order are not applicable. 4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system. 5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956: (a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered. (b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts / arrangements entered in the Register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs 5,00,000 in respect of each party during the year have been made at prices which appear reasonable as per information available with the Company. 6. According to the information and explanations given to us, the Company has not accepted any deposit from the public. Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company. 7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. 8. 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 cost records with a view to determine whether they are accurate or complete. 9. In respect of statutory dues:

a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess, and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2012 for a period of more than six months from the date of becoming payable. Amounts due and outstanding for a period exceeding 6 months as at March 31, 2012 to be credited to Investor Education and Protection Fund of Rs 9 crore, which are held in abeyance due to pending legal cases, have not been considered. b) The disputed statutory dues aggregating Rs 828 crore that have not been deposited on account of disputed matters pending before appropriate authorities are as under: Sr. No Name of the Statute Nature of the Dues Amount (Rs. in crore) Period to which the amount relates Forum where dispute is pending

1.

Central Excise Act, 1944 Tax

Excise Duty and Service

19

Various years Commissioner of from 1995-96 Central Excise to 2010-11 (Appeals) Various years from 1991-92 & to 2010-11 Central Excise Service Tax Appellate Tribunal

104

2.

Central Sales Tax Act, 1956 and Sales Tax Acts of various states

Sales Tax/ VAT and Entry Tax

40

Various years from 1991-92 to 2009-10

Joint/Deputy Commissioner/ Commissioner (Appeals)

26

Various years from 1993-94 to 2009-10 Various years from 1997-98

Sales Tax Appellate Tribunal High Court

398

1 3. Customs Act, 1962 Custom Duty 240

to 2009-10 2007-08

Supreme Court

2005-06 Central Excise and 2007-08 & Service Tax Appellate Tribunal

TOTAL

828

10. The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year. 11. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks and debenture holders. 12. In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities. 13. In our opinion, the Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company. 14. The Company has maintained proper records of the transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein. All shares, securities, debentures and other investments have been held by the Company in its own name. 15. The Company has given guarantees for loans taken by Others from banks and financial institutions. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interest of the Company. 16. The Company has raised new term loans during the year. The term loans outstanding at the beginning of the year and those raised during the year have been applied for the purposes for which they were raised. 17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on short-term basis that have been used for long- term investment. 18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956. 19. The Company has created securities / charges in respect of secured debentures issued.

20. The Company has not raised any monies by way of public issues during the year. 21. In our opinion and according to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the year. For Chaturvedi & Shah For Deloitte Haskins & Sells For Rajendra & Co. Chartered Accountants Chartered Accountants (Registration No. 101720W) D. Chaturvedi Partner Membership No.: 5611 Mumbai Date : April 20, 2012 (Registration No. 117366W) A. Siddharth Partner Membership No.: 31467 Chartered Accountants (Registration No. 108355W) A. R. Shah Partner Membership No.:47166

AUDITORS REPORT To, The Board of Directors, Tata Motors Limited, Bombay House, 24, Homi Mody Street, Mumbai 400 001, India. Dear Sirs, 1. We have examined the attached financial information of Tata Motors Limited (the Company), as approved by the Board of Directors of the Company, prepared in terms of the requirements of Paragraph B of Part II of Schedule II of the Companies Act, 1956 (the Act) and the Securities and Exchange Board of India (SEBI) (Disclosure and Investor Protection) Guidelines, 2000 as amended till August 28, 2008 (the SEBI Guidelines) issued by SEBI under Section 11 of the Securities and Exchange Board of India Act, 1992 and related clarifications thereto and in terms of our engagement agreed upon with the Company in accordance with our engagement letter dated July 3, 2008 in connection with the proposed simultaneous but unlinked issue of Ordinary Shares and A Ordinary Shares on a Rights basis (Rights Issue). Financial Information as per Audited Financial Statements We have examined the attached Summary Statement of Assets and Liabilities, as restated of Tata Motors Limited as at March 31, 2008, 2007, 2006, 2005 and 2004 (Annexure I) and the attached Summary Statement of Profit and Losses, as restated of Tata Motors Limited (Annexure II) for each of the years ended March 31, 2008, 2007, 2006, 2005 and 2004 together referred to herein as Non-consolidated Restated Summary Statements. These Non-consolidated Restated Summary Statements have been extracted from the financial statements of Tata Motors Limited as at and for the years ended March 31, 2008, 2007, 2006, 2005 and 2004 and have been approved/ adopted by the Board of Directors/ Members for those respective years. Audit for the financial years ended March 31, 2005 and 2004 was conducted by Messrs A. F. Ferguson & Co. (AFF) and Messrs S. B. Billimoria & Co., (SBB) (AFF together with SBB, the Erstwhile Auditors) and our opinion in so far as they relate to the amounts included in respect of these years are based solely on the reports submitted by them. The financial statements of the Company as at and for the year ended March 31, 2008, 2007 and 2006 have been audited by us. Based on our examination of these Non-consolidated Restated Summary Statements, we state that: i. The Non-consolidated Restated Summary Statements have to be read in conjunction with the Significant Accounting Policies and Notes to the Summary Statements of Assets and Liabilities, Summary Statement of Profit and Loss and Cash Flow Statement, as restated of Tata Motors Limited given in Annexure IV to this report.

2.

ii.

The restated profits have been arrived after adjusting for the changes in accounting policies retrospectively in respective financial years to reflect the same accounting treatment as per changed accounting policy for all the reporting periods.

iii. The restated profits have been arrived at after making such adjustments and regroupings as in our opinion are appropriate in the year to which they relate and are described under note [B] appearing in Annexure IV to this report; iv. There are no extra ordinary items that need to be disclosed separately in the Non-consolidated Restated Summary Statements. v. There are no qualifications in the auditors report on the financial statements that require adjustments to the Non-consolidated Restated Summary Statements.

3.

Other Financial Information We have also examined the following financial information relating to the Company as at and for the financial years ended March 31, 2008, 2007, 2006, 2005 and 2004 approved by the Board of Directors and annexed to this report: a. Statement of Cash Flows, as restated for the years ended March 31, 2008, 2007, 2006, 2005 and 2004 (Annexure III); Significant Accounting Policies adopted by the Company and notes to the Restated Summary Statements and Cash Flow Statement (Annexure IV); Details of Secured and Unsecured Loans as at March 31, 2008, 2007, 2006, 2005 and 2004 (Annexure V) Details of Sundry Debtors as at March 31, 2008, 2007, 2006, 2005 and 2004 (Annexure VI) Details of Loans and Advances as at March 31, 2008, 2007, 2006, 2005 and 2004, (Annexure VII) Details of Investments as at March 31, 2008, 2007, 2006, 2005 and 2004 (Annexure VIII) Details of Deferred Tax as at March 31, 2008, 2007, 2006, 2005 and 2004 (Annexure IX) Details of Dividend and Other Income for the years ended March 31, 2008, 2007, 2006, 2005 and 2004 (Annexure X) Details of Dividends Paid for the years ended March 31, 2008, 2007, 2006, 2005 and 2004 (Annexure XI) Statement of Tax Shelter for the years ended March 31, 2008, 2007, 2006, 2005 and 2004 (Annexure XII) Accounting Ratios relating to earnings per share, net asset value and return on net worth (Annexure XIII)

b.

c. d. e. f. g. h.

i. j. k.

l.

Capitalisation Statement as at March 31, 2008 (Annexure XIV)

F-1
Table of Contents

m. Related Party Information as at and for the years ended March 31, 2008, 2007, 2006, 2005 and 2004 (Annexure XV) 4. Based on our examination of the financial information of the Company attached to this report, we state that in our opinion, the Non-consolidated Restated Summary Statements and Other Financial Information mentioned above, as at and for the years ended March 31, 2008, 2007, 2006, 2005 and 2004 have been prepared in accordance with Paragraph B of Part II of Schedule II of the Act and the SEBI Guidelines. This report should not, in any way, be construed as a reissuance or re-dating of any of the previous audit reports nor should this be construed as a new opinion on any of the financial statements referred to herein. This report is intended solely for use of the management and for inclusion in the Letter of Offer, in connection with the proposed simultaneous but unlinked issue of Ordinary Shares and A Ordinary Shares on a Rights basis, to the existing shareholders of the Company and is not to be used, referred to or distributed for any other purpose without our prior written consent.

5.

6.

For Deloitte Haskins & Sells Chartered Accountants M. S. Dharmadhikari Partner (Membership No. 30802) Place: Mumbai Dated: September 15, 2008

To The Members of Reliance MediaWorks Limited 1. We have audited the attached Balance sheet of Reliance MediaWorks Limited (the Company) as at 31 st March 2011 and the related Profit and loss account and the Cash flow statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with 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 disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by 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 (Auditors Report) Order, 2003 (the Order) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 (the Act), we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to 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 appears from our examination of those books; c) the Balance sheet, the Profit and loss account 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 Profit and loss account and the Cash flow statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act; e) on the basis of written representations received from the directors of the Company as at 31 st March 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 st March 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act; and f) in our opinion, and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Act 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 st March 2011; (ii) in the case of the Profit and loss account, of the loss 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. For B S R & Co. For Chaturvedi & Shah Chartered Accountants Chartered Accountants Firm Registration No: 101248W Firm Registration No: 101720W Bhavesh Dhupelia Parag D. Mehta Partner Partner Membership No: 042070 Membership No: 113904 Mumbai Mumbai 28 May 2011 28 May 2011

Non-Performing Assets (NPA) - Meaning

Non-Performing Assets are popularly known as NPA. Commercial Banksassets are of various types. All those assets which generate periodical income are called as Performing Assets (PA). While all those assets which do not generate periodical income are called asNon-Performing Assets (NPA). If the customers do not repay principal amount and interest for a certain period of time then such loans become nonperforming assets (NPA). Thus non-performing assets are basically non-performing loans. In India, the time frame given for classifying the asset as NPA is 180 days as compared to 45 days to 90 days of international norms.

India and Non-Performing Assets

In India, NPA were very high in the beginning of 90's. Over a period of time there is considerable decline in the NPA's of all banks. In the case of public sector banks, gross non-performing assets were 9.4% in 2002-03 and it declined to 7.8% in 2003-04. The net NPA during the same period declined from 4.5% to 3%.

Types of NPA

NPA have been divided or classified into following four types:1. Standard Assets : A standard asset is a performing asset. Standard assets generate continuous income and repayments as and when they fall due. Such assets carry a normal risk and are not NPA in the real sense. So, no special provisions are required for Standard Assets. 2. 3. 4. Sub-Standard Assets : All those assets (loans and advances) which are considered as non-performing for a period of 12 months are called as Sub-Standard assets. Doubtful Assets : All those assets which are considered as non-performing for period of more than 12 months are called as Doubtful Assets. Loss Assets : All those assets which cannot be recovered are called as Loss Assets. These assets can be identified by the Central Bank or by the Auditors.

Provision on types of assets

Provision is allocating money every year to meet possible future loss.

Causes of NPA

NPA arises due to a number of factors or causes like:1. 2. 3. 4. 5. 6. Speculation : Investing in high risk assets to earn high income. Default : Willful default by the borrowers. Fraudulent practices : Fraudulent Practices like advancing loans to ineligible persons, advances without security or references, etc. Diversion of funds : Most of the funds are diverted for unnecessary expansion and diversion of business. Internal reasons : Many internal reasons like inefficient management, inappropriate technology, labour problems, marketing failure, etc. resulting in poor performance of the companies. External reasons : External reasons like a recession in the economy, infrastructural problems, price rise, delay in release of sanctioned limits by banks, delays in settlements of payments by government, natural calamities, etc.