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Cholamandalam Investment and Finance Company
BSE: 511243|NSE: CHOLAFIN|ISIN: INE121A01016|SECTOR: Finance - Leasing & Hire Purchase
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Auditor's Report (Cholamandalam Investment and Finance Company) Year End : Mar '13
Report on the Financial Statements
 
 1.  We have audited the accompanying financial statements of
 CHOLAMANDALAM INVESTMENT AND FINANCE COMPANY LIMITED (the Company),
 which comprise the Balance Sheet as at 31 March, 2013, the Statement of
 Profit and Loss and the Cash Flow Statement for the year then ended,
 and a summary of the significant accounting policies and other
 explanatory information.
 
 Management''s Responsibility for the Financial Statements
 
 2.  The Company''s 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 Section
 211(3C) of the Companies Act, 1956 (the Act) and in accordance with
 the accounting principles generally accepted in India. 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.
 
 Auditors'' Responsibility
 
 3.  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.
 
 4.  An audit involves performing procedures to obtain audit evidence
 about the amounts and the 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, but not for the purpose of expressing an opinion on the
 effectiveness of the Company''s internal control. An audit also includes
 evaluating the appropriateness of the accounting policies used and the
 reasonableness of the accounting estimates made by the Management, as
 well as evaluating the overall presentation of the financial
 statements.
 
 We believe that the audit evidence we have obtained is sufficient and
 appropriate to provide a basis for our audit opinion.
 
 Opinion
 
 5.  In our opinion and to the best of our information and according to
 the explanations given to us, the aforesaid 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:
 
 (a) in the case of the Balance Sheet, of the state of affairs of the
 Company as at 31 March, 2013;
 
 (b) in the case of the Statement of Profit and Loss, of the profit of
 the Company for the year ended on that date; and
 
 (c) in the case of the Cash Flow Statement, of the cash flows of the
 Company for the year ended on that date.
 
 Report on Other Legal and Regulatory Requirements
 
 6.  As required by the Companies (Auditor''s Report) Order, 2003 (the
 Order) issued by the Central Government in terms of Section 227(4A) of
 the Act, we give in the Annexure a statement on the matters specified
 in paragraphs 4 and 5 of the Order.
 
 7.  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 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 Statement of Profit and Loss, 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 Statement of Profit and
 Loss, and the Cash Flow Statement comply with the Accounting Standards
 referred to in Section 211(3C) of the Act.
 
 (e) On the basis of the written representations received from the
 directors as on 31 March, 2013 taken on record by the Board of
 Directors, none of the directors is disqualified as on 31 March, 2013
 from being appointed as a director in terms of Section 274(1)(g) of the
 Act.
 
 Annexure to the Independent Auditors'' Report
 
 (Referred to in paragraph 6 of our report of even date)
 
 (i) Having regard to the nature of the Company''s business / activities
 / results during the year, clauses 4(ii), 4(viii), 4(x), 4(xiii),
 4(xiv), 4(xv) and 4(xx) of paragraph 4 of the Order 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) Some of the fixed assets were physically verified during the year
 by the Management in accordance with a programme of verification, which
 in our opinion provides for physical verification of all the fixed
 assets at reasonable intervals. According to the information and
 explanations 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 has, in our opinion, not affected the going concern
 status of the Company.
 
 (iii) In respect of loans, secured or unsecured, granted by the Company
 to 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:
 
 (a) The Company has granted loans aggregating Rs. 3,650 lakhs to one
 party during the year. At the year-end, the outstanding balances of
 such loans granted aggregated Rs. Nil (one party) and the maximum
 amount involved during the year was Rs. 1,500 lakhs (one party)
 
 (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,
 
 (c) The receipts of principal amounts and interest have been regular /
 as per stipulations.
 
 (d) There were no overdue amounts remaining outstanding as at the
 year-end.
 
 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:
 
 (a) The Company has taken loans aggregating Rs. 3,011 lakhs from two
 parties during the year. At the year-end, the outstanding balances of
 such loans taken aggregated Rs. 2,041 lakhs (two parties) and the
 maximum amount involved during the year was Rs. 2,041 lakhs (two
 parties).
 
 (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,
 
 (c) The payments of principal amounts and interest in respect of such
 loans are regular / as per stipulations.
 
 (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 for the
 purchase of fixed assets and for the sale of services and during the
 course of our audit we have not observed any continuing failure to
 correct major weaknesses in such internal control system. The Company
 does not purchase inventory nor does it sell any goods (other than
 repossessed automobile assets) in the ordinary course of its business.
 
 (v) 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 in 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 Rs. 5 lakhs in
 respect of any party, the transactions have been made at prices which
 are prima facie reasonable having regard to the prevailing market
 prices at the relevant time.
 
 (vi) According to the information and explanations given to us, the
 Company has not accepted any deposit from the public during the year.
 In respect of unclaimed deposits, the Company has complied with the
 provisions of Sections 58A, 58AA or any other relevant provisions of
 the Companies Act, 1956 and the Companies (Acceptance of Deposits)
 Rules, 1975, as applicable to the Company, with regard to the deposits
 accepted from the public prior to 01 November, 2006.  However, in
 respect of overdue amounts totalling to Rs. 1.86 lakhs, payments have
 not been made since the repayment of the same to the depositors has
 been stayed by the Madras High Court. Further, in respect of overdue
 amounts totalling to Rs. 0.11 lakhs, payments have not been made as per
 instructions received from the Central Bureau of Investigation.  Other
 than the above, 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.
 
 (vii) In our opinion, the internal audit functions carried out during
 the year by the Company''s internal audit department and an external
 agency appointed by the Management have been commensurate with the size
 of the Company and the nature of its business.
 
 (viii) According to the information and explanations given to us in
 respect of statutory dues:
 
 (a) The Company has been regular in depositing 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 material statutory dues
 applicable to it with the appropriate authorities.
 
 (b) There were no undisputed amounts payable in respect of 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 in arrears as
 at 31 March, 2013 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
 31 March, 2013 on account of disputes are given below:
 
 Name of the Statute          Nature of      Forum where
                              Dues           Dispute is pending
 
 Income Tax Act, 1961         Tax and        Commissioner of
                              Interest       Income Tax (Appeals)
 
 Income Tax Act, 1961         Tax and        Appellate Tribunal
                              Interest      (ITAT)
 
 Income Tax Act, 1961         Tax and        Madras High Court
                              Interest
 
 Income Tax Act, 1961         Tax Deducted   Commissioner of
                              at Source      Income Tax (Appeals)
 
 Tamil Nadu General           Sales Tax      Sales Tax Appellate
 Sales Tax Act, 1959                         Tribunal
 
 Central Sales Tax Act,       Sales Tax      Sales Tax Appellate
 1956                                        Tribunal
 
 Bihar Finance Act, 1981      Sales Tax      Sales Tax Appellate
                                             Tribunal
 
 Gujarat Sales Tax Act,       Sales Tax      Sales Tax Tribunal
 1969
 
 Delhi Sales Tax Act,         Sales Tax      Deputy Commissioner 
 1975                                        of Sales Tax Appeals
 
                                                            Amount
 Name of the Statute          Period to which               involved
                              the amount relates           (Rs. 
                             (Financial Year)               laksh)
 
 Income Tax Act 1961          2000-01 , 2005-06 and          1,346 
                              2009-10
 
 Income Tax Act, 1961         1990-91, 1991-92, 2003-04         12
 
 Income Tax Act, 1961         1995-96, 2000-01, 2001-           97
                              02, 2002-03
 
 Income Tax Act, 1961         2009-10                          225
 
 Tamil Nadu General Sales
 Tax Act 1959                 1995-96                           34
 
 Central Sales Tax Act 1956   1995-96                           15
 
 Bihar Finance Act 1987       1993-94 and 1994-95                3
 
 Gujarat Sales Tax Act 1969   1997-98                            2
 
 Delhi Sales Tax Act 1975     1991-92                            7
 
 (ix) In our opinion and according to the information and explanations
 given to us, the Company has not defaulted in the repayment of dues to
 financial institutions, banks and debenture holders.
 
 (x) In our opinion, the Company has maintained adequate documents and
 records where it has granted loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 
 (xi) In our opinion and according to the information and explanations
 given to us, the term loans have been applied by the Company during the
 year for the purposes for which they were obtained, other than
 temporary deployment pending application.
 
 (xii) 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, we report that funds raised on short-term basis have, prima
 facie, not been used during the year for long-term investment.
 
 (xiii) According to the information and explanations given to us, the
 Company has not made preferential allotment of shares to parties and
 companies covered in the Register maintained under Section 301 of the
 Companies Act, 1956.
 
 (xiv) According to the information and explanations given to us, during
 the period covered by our audit report, the Company had issued 20,537
 debentures of Rs. 1,000,000 each and 2,860 debentures of Rs. 500,000
 each. The Company has created security in respect of the debentures
 issued.
 
 (xv) 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 though
 there have been a few cases of irregularities amounting to Rs. 143.76
 lakhs (Refer Note 39 to the financial statements) detected and
 appropriately dealt with by the management.
 
                                         For Deloitte Haskins & Sells
 
                                                Chartered Accountants
 
                                           (Registration No.: 008072S)
 
                                                Geetha Suryanarayanan
 
 Place : Chennai                                              Partner
 
 Date : 26 April, 2013                         (Membership No.: 29519)
Source : Dion Global Solutions Limited
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