We have audited the accompanying financial statements of TVS Motor
Company Limited, Chennai (the Company), which comprise of the Balance
Sheet as at 31st March 2014, the Statement of Profit and Loss and 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.
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 but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. 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 is sufficient and
appropriate to provide a basis for our audit 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
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2014;
b) in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 (the
Order) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
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
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
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
d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
sub- section (3C) of Section 211 of the Companies Act, 1956; and
e) on the basis of written representations received from the directors
as on 31st March 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31st March 2014, from being
appointed as a director in terms of clause (g) of sub- section (1) of
Section 274 of the Companies Act, 1956.
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
(b) Fixed assets are physically verified by the management at
reasonable intervals. In our opinion, the frequency of verification is
reasonable having regard to the size of the Company and the nature of
its assets. No material discrepancies as compared to book records were
noticed on such verification.
(c) Since the disposal of fixed assets during the year is not
substantial, the preparation of financial statements on a going concern
basis is not affected on this account.
(ii) (a) The inventories have been physically verified by the
management during the year. In our opinion, the frequency of physical
verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures for 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 between the physical stocks and the book
stocks were not material and have been properly dealt with in the books
(iii) (a) The Company has granted loans and advances to two Companies
covered in the register maintained under Section 301 of the Act. The
maximum amount involved during the year was Rs.54.57 crores and the
year end balance aggregates to Rs.48.07 crores.
The Company has also granted interest free loan of Rs. 0.10 crores to a
wholly owned subsidiary.
(b) In our opinion, the rate of interest and other terms and conditions
on which such loans and advances were granted, are not prima facie
prejudicial to the interest of the Company.
(c) The recovery of principal amount and interest thereon, as
stipulated, are regular.
(d) During the year, the Company has not taken loan from any party
covered in the register maintained under Section 301 of the Act.
(iv) In our opinion and according to the information and explanations
given to us, having regard to the explanation that some of the items
are of special nature and suitable alternative sources are not
available for obtaining comparable quotation, 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,
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 the internal control system.
(v) (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 under Section 301 of the Act, have been
properly entered in the said register.
(b) In our opinion and according to the information and explanations
given to us, transactions entered in the register maintained under
Section 301 of the Act and exceeding the value by rupees five lakhs
during the year in respect of each party have been made at prices which
are reasonable having regard to the prevailing market prices at the
(vi) According to the information and explanations given to us, the
Company has not accepted any deposits from the public. Therefore, the
provisions of Clause (vi) of the para 4 of the Order are not applicable
to the Company.
(vii) The Company has an Internal Audit System, which in our opinion is
commensurate with its size and nature of its business.
(viii) The Central Government has prescribed maintenance of cost
records under Section 209(1)(d) of the Act in respect of certain
products manufactured by the Company. We have broadly reviewed the
books of account maintained by the Company pursuant to the rules made
by the Central Government for the maintenance of cost records under
Section 209(1)(d) of the Act and are of the opinion that, prima facie,
the prescribed accounts and records have been made and maintained.
(ix) (a) According to the records of the Company, the Company is
generally regular in depositing undisputed statutory dues including
Provident Fund, Employees'' State Insurance, Investor Education and
Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty and Cess and other statutory dues with the
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth
Tax, Service Tax, Customs Duty, Excise Duty and Cess were in arrears as
at 31st March 2014 for a period of more than six months from the date
they became payable.
(c) According to the information and explanations given to us and the
records of the Company, the dues of Sales Tax / Income Tax / Customs
Duty / Wealth Tax / Service Tax / Excise Duty / Cess, which have not
been deposited on account of any dispute are as follows:-
Name of the Statute/ Period Amount Forum where
(Nature of dues) of dues (Rs. in Cr) dispute is pending
Central Excise and
1986-2011 31.86 Service Tax Appellate
Central Excise Assistant/Deputy/
Act, 1944 1998-2013 19.43 Commissioner of
(Cenvat/Excise Duty) Excise, Hosur and
Hon''ble High Court of
2005-2012 10.11 Hon''ble Supreme Court
Finance Act, 1994 1999-2012 4.26 Commissioner of
(Service Tax) Excise, Hosur and
2011-2012 0.06 Commissioner of
Customs Act, 1962
Excise, Hosur and
Hon''ble High Court of
1999-2001 1.87 Judicature at Madras
1998-2010 1.29 Department Authorities
1997-2010 0.47 Tribunals
Sales Tax / VAT Laws
Hon''ble High Court of
(Sales Tax) 1995-1998 0.05
2008-2009 0.60 Hon''ble Supreme Court
Income Tax Act, 1961
Commissioner of Income
(Income Tax and 2009-2010 106.31 Tax (Appeals)
(x) The Company does not have any accumulated losses at the end of the
financial year. The Company has not incurred any cash losses during the
financial year covered by our audit and in the immediately preceding
(xi) On the basis of verification of records and according to the
information and explanations given to us, the Company has not defaulted
in repayment of dues to Financial Institutions/Banks.
(xii) The Company has not granted any loans and advances on the basis
of security by way of pledge of shares, debentures and other
(xiii) The Company is not a chit fund or a nidhi or a mutual fund
society. Therefore, the provisions of sub-para (xiii) of para 4 of the
Order are not applicable to the Company.
(xiv) The Company is not dealing or trading in shares, securities,
debentures and other investments other than in mutual fund investments.
Proper records have been maintained in respect of these mutual fund
investments and timely entries have been made therein. The investments
have been held by the Company in its own name except to the extent of
exemption granted under Section 49 of the Act, in respect of shares
held in subsidiary companies through the nominees.
(xv) In our opinion and according to the information and explanations
given to us, the terms and conditions of guarantees given by the
Company for loans taken by others are not prejudicial to the interest
of the Company.
(xvi) In our opinion, the term loans availed have been utilised for the
purpose for which they were raised.
(xvii) According to the information and explanations given to us, based
on an overall examination of the balance sheet of the Company and
related information made available, we report that funds raised on
short term basis have not been used for long term investments.
(xviii) During the year, the Company has not made preferential
allotment of any shares to parties and Companies covered in the
Register maintained under Section 301 of the Act.
(xix) During the year, the Company has not issued any secured
debentures and accordingly no securities were required to be created.
(xx) During the year, the Company has not raised any money by public
issue. Therefore, the requirement of disclosure by the Management on
the end use of money raised by public issue and verification of the
same is not applicable.
(xxi) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and as per
the information and explanations given to us by the Management, no
material fraud on or by the Company has been noticed or reported during
the course of our audit.
For V. Sankar Aiyar & Co
Char tered Accountants
Firm Regn. No.: 109208W
Place: Bengaluru Partner
Date :29th April 2014 Membership No.: 34319