We have audited the attached Balance Sheet of TVS MOTOR COMPANY
LIMITED, Chennai - 600 006 as at 31st March 2012 and the Statement of
Profit and Loss for the year ended on that date 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 have conducted our audit in accordance with 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 from any 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 (Auditors'' 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 accounts as required by law have
been kept by the Company so far as it appears from our examination of
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 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 as on 31st March 2012 and taken on record by the Board
of Directors, we report that none of the directors 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 notes under Accounting Standard 13 and
Accounting Standard 30 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 on that date; and
iii) in so far as it relates to the Cash Flow Statement, of the cash
flows of the Company for the year ended on that date.
(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. 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 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 four Companies covered in the register maintained under Section 301
of the Companies Act, 1956 amounting to Rs. 50.30 crores (Balance due
as at the year end Rs. 42.64 crores from two parties).
(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.
(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 loans and advances.
(e) During the year, the Company has taken loan of Rs.14.85 Cr from one
party covered in the register maintained under Section 301 of the
Companies Act, 1956. (Balance due as at the year end Rs.14.85 Cr)
(f) The terms relating to interest and other conditions are not prima
facie prejudicial to the interest of the Company.
(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
payments of Employees'' State Insurance and National Calamity Contingent
(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 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 authorities concerned.
Name of the Nature of Amount Forum where
Statute dues (Rs. in Cr) dispute is pending
Central Excise Cenvat / (a) 9.16 Central Excise and
Act, 1944 Excise dues Service Tax Appellate
(b) 41.54 Assistant / Deputy /
Hosur and Mysore
(c) 0.24 High Court of
(d) 7.32 Supreme Court
Finance Service Tax (a) 5.84 Assistant / Deputy /
Act, 1994 Commissioner of
Hosur and Mysore
(b) 2.43 Central Excise and
Service Tax Appellate
Customs Act, Customs 1.87 High Court of
1962 Duty Judicature at Madras
Sales Tax / Sales tax (a) 2.69 Dept Authorities
(b) 0.61 Tribunals
(c) 0.20 High Court of
(d) 0.05 High Court of Orissa
(e) 0.60 Supreme Court
The Tamil Nadu Electricity (a) 3.96 High Court of
Tax on Tax Judicature at Madras
Consumption or (b) 0.76 Supreme Court
Act, 2003 read
Income Tax Act, Income Tax
1961 & Interest (a) 21.97 High Court of
thereon Judicature at Madras,
(b) 15.75 Income Tax Appellate
(c) 10.21 Commissioner of
Income Tax, (Appeals)
(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 public
(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 : May 24, 2012 Membership No.: F7945