in a Dynamic Environment - Tata Consultancy Services

ANNEXURE TO THE AUDITORS' REPORT
(Referred to in paragraph 3 of our report of even date)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and
situation of fixed assets.
(b) According to the information and explanations given to us, the fixed assets were physically verified by the
management in accordance with the programme of verification, which in our opinion, is reasonable
having regard to the size of the Company and the nature of its assets. The discrepancies noticed on
physical verification were not material and have been properly dealt with in the books of account.
(c) There was no disposal of a substantial part of fixed assets.
(ii) (a) The Company has conducted physical verification of inventory at reasonable intervals during the year.
(b) In our opinion and according to the information and explanations given to us, the procedures of physical
verification of inventory followed by the Management are 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 and no material discrepancies were noticed on physical verification.
(iii) In respect of unsecured loans granted to companies covered in the register maintained under Section 301 of the
Companies Act, 1956 and according to the information and explanations given to us -
(a) During the year, the Company has given unsecured interest-free loans aggregating to Rs. 63.65 crores to
two of its wholly owned subsidiaries. The Company has also given unsecured loans aggregating to Rs. 5.56
crores to one of its subsidiary. At the year end, the loans granted to three subsidiaries aggregates to Rs.
522.50 crores. The maximum balance outstanding during the year is Rs. 598.48 crores.
(b) The rates of interest and other terms and conditions are prima facie not prejudicial to the interests of
the Company.
(c) The receipt of the principal amount and interest is as per the terms of the loan agreements and are
regular;
(d) There are no overdue amounts and hence the provisions of sub-clause (d) of clause 4(iii) of the Order are
not applicable to the Company.
(e) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties
listed in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions
of sub-clauses (e), (f) and (g) of clause 4 (iii) of the Order are not applicable to the Company.
(iv) 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 are adequate internal control procedures commensurate with the size
of the Company and the nature of its business with regard to purchases of inventories and fixed assets and with
regard to the sale of goods and services. During the course of our audit, we have not observed any continuing
major weakness in such internal controls.
(v) (a) To the best of our knowledge and belief and according to the information and explanations given to us,
we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the
Companies Act, 1956 have been entered in the register required to be maintained under that section; and
(b) Transactions made in pursuance of such contracts or arrangements have been made at prices which are
reasonable having regard to the prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted
deposits from the public during the year. Therefore, the provisions of clause 4 (vi) of the Order are not applicable
to the Company.
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