Report on the Financial Statements
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 2013, the Statement of Profit and Loss and Cash
Flow Statement for the year ended on that date along with Notes on
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. 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
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 India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2013;
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 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31st March 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Companies Act, 1956.
Annexure referred to in our report of even date on the accounts for the
year ended 31st March 2013.
(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 interval is reasonable having
regard to the size of the Company and the nature of its assets. No
material discrepancies were noticed on such verification.
(c) The assets disposed off during the year are not substantial and
therefore do not affect the going concern status of the Company.
(ii) (a) The inventory has been physically verified at reasonable
intervals during the year by the management. In our opinion, the
frequency of such verification is adequate.
(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 were 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) During the year, the Company has granted loans and advances
to two Companies covered in the register maintained under Section 301
of the Companies Act, 1956 amounting to Rs.5.10 crore. (Balance due as
at the year end is Rs.46.77 crore from three companies).
(b) In our opinion, the rate of interest and other terms and conditions
on which such loans and advances are made are not prima facie
prejudicial to the interest of the Company. Interest is not charged on
loan advanced to a wholly owned subsidiary of the Company.
(c) The recovery of principal amount and interest thereon were in
accordance with the terms of loan.
(d) As on the date of Balance Sheet, there was no overdue amount
recoverable on the said loan.
(e) During the year, the Company has not taken loan from any party
covered in the register maintained under Section 301 of the Companies
(iv) 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, fixed assets and for
the sale of goods and services. During the course of our audit, no
minor or major continuing failure has been noticed in the internal
(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 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, transactions entered in the register maintained under
Section 301 of the Companies Act, 1956 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 relevant time.
(vi) The Company has not accepted any deposit from the public.
(vii) The Company has an Internal Audit System, which in our opinion is
commensurate with its size and nature of its business.
(viii) 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 in respect of automotive two and three wheelers and are of the
opinion that prima-facie, the prescribed accounts and records have been
made and maintained.
(ix) (a) According to the records provided to us, the Company is
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 appropriate
authorities. However, there have been marginal delays in respect of
Profession Tax, Employees' Provident fund, Service Tax and Income Tax
deducted at source.
(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 2013 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 authorities concerned.
Name of the Nature of Amount Forum where
Statute dues (Rs. in Cr) dispute is pending
Excise Act, Cenvat / A 28.50 Central Excise and
1944 Excise Service Tax Appellate
dues Tribunal, Chennai
B 18.83 Assistant / Deputy /
Hosur and Mysore
C 0.24 Hon'ble High Court
D 7.98 Hon'ble Supreme Court
Act, 1994 Service A 4.26 Assistant / Deputy /
Tax Commissioner of
Hosur and Mysore
B 0.77 Central Excise and
Service Tax Appellate
Act, 1962 Customs A 0.06 Assistant / Deputy /
Duty Commissioner of
Central Excise, Hosur
B 1.87 High Court of
Judicature at Madras
Nadu Tax Electricity A 4.61 High Court of
or Tax Judicature at Madras
Sales Tax / Sales tax A 0.32 Department Authorities
VAT Laws B 0.38 Tribunals
C 0.05 Hon'ble High Court of Orissa
D 0.60 Hon'ble Supreme Court
Tax Act, Income A 34.24 Commissioner of
1961 Tax & Income Tax (Appeals)
thereon B 5.20 High Court of
Judicature at Madras
(x) 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 financial year.
(xi) 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 its banks.
(xii) 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.
(xiii) The Company is not a chit/nidhi/mutual benefit fund/ society and
as such this clause of the Order is not applicable.
(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 transactions
and contracts 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, 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) The term loans availed by the Company were utilised for the
purpose for which the loans were obtained.
(xvii) On the basis of our examination, the Company has not used funds
raised on short-term basis for long term investments.
(xviii) 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.
(xix) During the year, the Company has not issued any secured
(xx) During the year, the Company has not raised any money by
(xxi) 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 Regn. No.: 004207S
Place: Bengaluru Partner
Date : 30th April 2013 Membership No.: F7945