We have audited the attached Balance Sheet of M/s. TVS Electronics
Limited, Jayalakshmi Estates, 29, Haddows Road, Chennai - 600 006 as
at 31s1 March, 2012, the Statement of Profit & Loss for the year ended
31st March, 2012 annexed thereto and the Cash Flow Statement 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.
1. We conducted our audit in accordance with the Auditing Standards
generally accepted in India. These 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 presentation of the
financial statements. We believe that our audit provides a reasonable
basis for our opinion.
2. As required by the Companies (Auditor''s Report) Order, 2003 and
amended by the Companies (Auditor''s Report) (Amendment) Order, 2004
issued by the Central Government 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
3. Further to our comments in the Annexure referred to above, we state
(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
(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
(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement referred to in this report are in agreement with the books of
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss 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 Companies Act, 1956.
(e) On the basis of written representations received from the Directors
of the Company and taken on record by the Board of Directors, we report
that no Director is disqualified from being appointed as a Director in
terms of clause (g) of sub-section (1) of Section 274 of the Companies
Act, 1956 on the said date;
(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
notes thereon, particularly the notes under AS13 (Accounting for
Investments), 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 so far as it relates to the Balance Sheet, of the state of
affairs of the Company as at 31st March, 2012;
(ii) in so far as it relates to the Statement of Profit and Loss, of
the profit of the Company for the year ended 31s1 March, 2012; and
(iii) in so far as it relates to the Cash Flow Statement, of the cash
flows for the year ended on that date.
1. a) The Company has maintained proper records showing full
particulars including quantitative details and situation of the fixed
b) The assets are physically verified, in phases, by the Management
during the year as per the regular programme of verification, which in
our opinion is reasonable having regard to the size of the Company and
the nature of its assets. No material discrepancies were noticed on
such physical verification. The discrepancies noticed on such
verification have been appropriately dealt with in the books of account
of the Company.
c) During the year the Company has disposed off unused assets and the
loss arising there from is disclosed as exceptional item of expenditure.
The assets disposed off during the year are not substantial and
therefore do not affect the going concern status of the Company.
2. a) The stock of raw materials, stores, spare parts and
finished goods other than in transit were physically verified during
the year by the Management. In our opinion, the frequency of
verification is reasonable. In respect of inventory with third
parties, which have not been physically verified, there is a process of
obtaining confirmation from such parties.
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, the Company has maintained proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material and have been
properly dealt with in the books of account.
3. a) During the year, the Company has granted unsecured loan of Rs 521
lakhs (Balance as at 31.03.2012 Rs 200 lakhs) to a Company covered in
the Register maintained under Section 301 of the Companies Act, 1956.
The rate of interest and other terms and conditions of the loan are not
prima facie prejudicial to the interest of the Company. The receipt of
Principal amount and interest thereon are regular. As on the date of
Balance Sheet there was no overdue amount recoverable on the said
b) During the year the Company has not availed any loan from companies
covered in the Register maintained under Section 301 of the Companies
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
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, no
major weaknesses have been noticed in the internal control system.
5. a) Based on the audit procedures applied by us and
according to the information and explanations provided by the
Management, we are of the opinion that the contracts or arrangements
that need to be entered in the Register maintained in pursuance of
Section 301 of the Companies Act, 1956 have been properly entered in
the said Register.
b) In our opinion and according to the information and explanations
given to us, the transactions entered in the Register maintained under
Section 301 and exceeding during the financial year by Rs 5.00 lakhs in
respect of each party have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public.
7. The Company has an internal audit system, which in our opinion, is
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company pursuant to the rules made by the Central Government under
Section 209(1 )(d) of the Companies Act, 1956 for maintenance of cost
records and are of the opinion that, prima facie, the prescribed
accounts and records have been made and maintained.
9. a) According to the records provided to us, the Company
is generally 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 statutory dues with the
appropriate authorities. However marginal delay was noticed in respect
of one Employee State Insurance remittance.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales
Tax, Service Tax, Customs Duty, Excise Duty and Cess were in arrears,
as at 31st March, 2012 for a period of more than six months from the
date they became payable.
c) According to the information and explanations given to us, the
following are the details of the disputed dues, that were not deposited
with the concerned authorities.
Name of the Nature of dues Amount Forum where dispute is
Statue (Rs in Pending
Sales Tax Statutory Forms 270.08 Assistant Commissioner
Acts of Entry Tax/ /Deputy Commissioner
various Warranty Appellate Authorities -
States replacement Commercial Taxes of
stock related/ various states.
Income Tax a) Cost of 220.20 Commissioner of Income Tax
Act, 1961 acquisition of (Appeal), Chennai.
asset sold and
b) Claim of TDS 49.65
c) Inventory 193.82
d) Wrong levy of 14.42
Service Tax Dispute on 121.15 Customs, Excise and Service
availment of Tax Appellate Tribunal,
input tax credit Chennai (CESTAT).
Excise Refund disputed 13.23 Customs, Excise and Service
Tax Appellate Tribunal,
Customs Special 10.25 The Commissioner of Customs
Additional Duty (Appeals), Chennai
10. The Company neither has accumulated losses as at the end of the
financial year nor has incurred cash losses during the financial year
and in the immediately preceding year.
11. Based on our verification and according to the information and
explanations given by the Management, the Company has not defaulted in
repayment of dues to any financial institution or bank.
12. Based on our examination and according to the information and
explanations given to us, the Company has not granted loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities.
13. The Company is not a chit / nidhi / mutual benefit fund / society
and as such clause (xiii) of the Order is not applicable.
14. The Company is not dealing or trading in shares, securities,
debentures and other investments. All investments are held in the
Company''s own name except in the case of investment in wholly owned
subsidiaries where certain number of shares are held by nominees as
provided in Section 49 (3) of the Companies Act, 1956.
15. The Company has not given any guarantee for loans taken by others
from bank or financial institution.
16. In our opinion, the term loans were applied for the purpose for
which the loans were obtained.
17. On the basis of our examination, the Company has not used the funds
raised on short-term basis for long-term investments.
18. During the year, the Company has not allotted any shares on
preferential basis to parties and companies covered in the Register
maintained under Section 301 of the Companies Act, 1956.
19. During the year, the Company has not issued any debentures.
20. During the year, the Company has not raised any money by public
21. Based on the audit procedures adopted and information and
explanations given to us by the Management, no fraud on or by the
Company has been noticed or reported during the course of our audit.
For SUNDARAM & SRINIVASAN
Firm Registration No: 004207S
Chennai Membership No. F7945