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TVS Motor Company
BSE: 532343|NSE: TVSMOTOR|ISIN: INE494B01023|SECTOR: Auto - 2 & 3 Wheelers
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Auditor's Report (TVS Motor Company) Year End : Mar '13
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 accounts.

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. 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 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 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 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 assets.

(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 of account.

(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 Act, 1956.

(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 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 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

Central Excise Act, Cenvat / A 28.50 Central Excise and 1944 Excise Service Tax Appellate dues Tribunal, Chennai

B 18.83 Assistant / Deputy / Commissioner of Central Excise, Hosur and Mysore

C 0.24 Hon'ble High Court of Karnataka D 7.98 Hon'ble Supreme Court

Finance Act, 1994 Service A 4.26 Assistant / Deputy / Tax Commissioner of Central Excise, Hosur and Mysore

B 0.77 Central Excise and Service Tax Appellate Tribunal, Chennai

Customs Act, 1962 Customs A 0.06 Assistant / Deputy / Duty Commissioner of Central Excise, Hosur and Mysore

B 1.87 High Court of Judicature at Madras

The Tamil Nadu Tax Electricity A 4.61 High Court of on Consumption or Tax Judicature at Madras Sale of Electricity Act, 2003 read With Amendment Act, 2007

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

Income Tax Act, Income A 34.24 Commissioner of 1961 Tax & Income Tax (Appeals) Interest

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 debentures.

(xx) During the year, the Company has not raised any money by public.issue.

(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 Chartered Accountants

Firm Regn. No.: 004207S

M. BALASUBRAMANIYAM

Place: Bengaluru Partner

Date : 30th April 2013 Membership No.: F7945

Source : Dion Global Solutions Limited
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