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TVS Motor Company
BSE: 532343|NSE: TVSMOTOR|ISIN: INE494B01023|SECTOR: Auto - 2 & 3 Wheelers
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« Mar 13
Auditor's Report (TVS Motor Company) Year End : Mar '14
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.
 
 Auditors'' Responsibility
 
 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.
 
 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 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
 audit;
 
 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
 books;
 
 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
 account;
 
 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
 assets.
 
 (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
 of account.
 
 (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
 relevant time.
 
 (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
 appropriate authorities.
 
 (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
                                                  Tribunal, Chennai 
 
 Central Excise                                   Assistant/Deputy/ 
 Act, 1944              1998-2013      19.43      Commissioner of 
                                                  Central 
 (Cenvat/Excise Duty)                             Excise, Hosur and 
                                                  Mysore
 
                                                  Hon''ble High Court of
                        2008-2010       0.07
                                                  Karnataka
  
                        2005-2012      10.11      Hon''ble Supreme Court
 
                                                  Assistant/Deputy/
 Finance Act, 1994      1999-2012       4.26      Commissioner of 
                                                  Central
 (Service Tax)                                    Excise, Hosur and 
                                                  Mysore
 
                                                  Assistant/Deputy/
                        2011-2012       0.06      Commissioner of 
                                                  Central
 Customs Act, 1962
                                                  Excise, Hosur and 
                                                  Mysore
 (Customs Duty)
 
                                                  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
                                                  Orissa
 
                        2008-2009       0.60      Hon''ble Supreme Court
 Income Tax Act, 1961
                                                  Commissioner of Income
 (Income Tax and        2009-2010     106.31      Tax (Appeals)
 Interest thereon)
 
 
 
 (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
 financial year.
 
 (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
 securities.
 
 (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
 
 
 
                                                        S. VENKATRAMAN 
 
 Place: Bengaluru                                              Partner
 
 Date :29th April 2014                           Membership No.: 34319
Source : Dion Global Solutions Limited
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