1. We have audited the attached Balance Sheet of SML ISUZU LIMITED
(the Company) as at March 31, 2011, and the related Profit and Loss
Account and Cash Flow Statement for the year ended on that date annexed
thereto, which we have signed under reference to this report. 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.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of 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 financial statement
presentation. We believe that our audit provides a reasonable basis for
3. As required by the Companies (Auditor''s Report) Order, 2003, as
amended by the Companies (Auditor''s Report) (Amendment) Order, 2004
(together the Order), issued by the Central Government of India in
terms of sub-section (4A) of Section 227 of ''The Companies Act, 1956''
of India (the ''Act'') and on the basis of such checks of the books and
records of the Company as we considered appropriate and according to
the information and explanations given to us, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, 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 purposes of
(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
(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Profit and Loss Account 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 Act;
(e) On the basis of written representations received from the
directors, and taken on record by the Board of Directors, none of the
directors is disqualified as on March 31, 2011 from being appointed as
a director in terms of clause (g) of sub-section (1) of Section 274 of
(f) Attention is invited to non provision ofRs.488 lacs in respect of
MODVAT credit receivable as explained in Note 2 of Schedule N. Had the
said amount been provided, loans and advances and profit for the year
would have been lower by the corresponding amount.
The matter referred above was also the subject matter of qualification
in our audit report on the financial statements for the year ended
(g) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give, in the prescribed
manner, the information required by the Act, and subject to our
comments in para (f) above, give a true and fair view in conformity
with the accounting principles generally accepted in India:
(i) in the case of the Balance Sheet, of the state of affairs of the
company as at March 31, 2011;
(ii) in the case of the Profit and Loss Account, of the profit for
the year ended on that date; and
(iii) in the case of the Cash Flow Statement, of the cash flows
for the year ended on that date.
ANNEXURE TO AUDITORS'' REPORT
Referred to in paragraph 3 of the Auditors'' Report of even date to the
members of SMLISUZU Limited (formerly Swaraj Mazda Limited) on the
financial statements for the year ended March 31, 2011
1. (a) The Company is maintaining proper records showing full
particulars, including quantitative details and situation, of
(b) The fixed assets are physically verified by the Management
according to a phased programme designed to cover all the items over a
period of three years which, in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the Management during the year and no material
discrepancies between the book records and the physical inventory have
(c) In our opinion and according to the information and explanations
given to us, a substantial part of fixed assets has not been disposed
of by the Company during the year.
2. (a) The inventory (excluding stocks with third parties) has been
physically verified by the Management during the year.
In respect of inventory lying with third parties, these have
substantially been confirmed by them. In our opinion, the frequency of
verification is reasonable.
(b) In our opinion, the procedures of 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) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
3 (a) The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.
(b) The Company has not taken any loans,secured or unsecured, from
companies, firms or other parties covered in the register maintained
under Section 301 of the Act.
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fixed assets and for the sale of goods and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have neither come across nor have been
informed of any continuing failure to correct major weaknesses in the
aforesaid internal control system.
5. (a) In our opinion and according to the information and
explanations given to us, the particulars of contracts or
arrangements referred to in Section 301 of the Act have been entered in
the register required to be maintained under that section. (b) In our
opinion and according to the information and explanations given to us,
the transactions made in pursuance of such contracts or arrangements
and exceeding the value of Rupees Five Lakhs in respect of any party
during the year have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public within
the meaning of Sections 58A and 58AA of the Act and the rules framed
7. In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
8. We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government of India, the maintenance of cost records has been
prescribed under clause
(d) of sub-section (1) of Section 209 of the Act, and are of the
opinion that prima facie, the prescribed accounts and records have been
made and maintained. We have not, however, made a detailed examination
of the records with a view to determine whether they are accurate or
9. (a) According to the information and explanations given to us and
the records of the Company examined by us, in our opinion, except dues
in respect of income-tax where there have been delays during the year,
though the delay in deposit have not been serious, the Company is
regular in depositing undisputed statutory dues including investor
education and protection fund, employees'' state insurance, wealth tax,
service tax, customs duty, excise duty and other material statutory
dues as applicable, with the appropriate authorities. The extent of the
arrears of statutory dues outstanding as at March 31, 2011, for a
period of more than six months from the date they became payable are as
Name of the Nature of dues Amount (Rs.) Period to which Due date Date
Income Witholding 45,000 April-June 2010 July 07,
2010 May 05
1961 Tax on Royalty
(b) According to the information and explanations given to us and the
records of the Company examined by us, the particulars of dues of
income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise
duty and cess as at March 31, 2011 which have not been deposited on
account of a dispute are as follows:
Name of Nature of Amount Amount Period to
which Forum where the
the statute dues (Rs. lacs) Deposited
amount dispute is
(Rs. Lacs) relates
Sales Sales Tax 218.23 87.30 2000-01 Sales Tax
Punjab VAT Penalty 3.67 0.92 2007-08 Deputy Excise and
Act, 2005 Taxation
cum Joint Direc
Sales Penalty 11.78 2.37 2001-02 Deputy
Tax Act (Rs. 9.25
lacs has (Appeals),
radesh Sales Tax 15.94 7.19 1993-94 Additional Comm
Trade Tax (Appeals),
Excise Excise Duty 81.17 2.12 2000-01 to Commissioner
Act, 1944 Interest and 2008-09 Custom Excise
Penalty Service Tax
Tax Income Tax, 380.96 62.00 1986-87,
1991-92 High Court of
1961 Interest and 2004-05,
Penalty 2006-07 Appellate
Finance Service Tax 35.23 1.30 2002-2008 Commissioner
1994 and penalty Custom Excise
10. The Company has no accumulated losses as at March 31, 2011 and it
has not incurred any cash losses in the financial year ended on that
date or in the immediately preceding financial year.
11. According to the records of the Company examined by us and the
information and explanation given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank or debenture
holders as at the balance sheet date.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
13. The provisions of any special statute applicable to chit fund /
nidhi / mutual benefit fund/ societies are not applicable to the
14. In our opinion, the Company is not a dealer or trader in shares,
securities, debentures and other investments.
15. In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from banks or financial institutions during the year.
16. The Company has not obtained any term loans.
17. On the basis of an overall examination of the balance sheet of the
Company, in our opinion and according to the information and
explanations given to us, there are no funds raised on a short-term
basis which have been used for long- term investment.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. The Company has not issued any debentures during the year and
there are no debentures outstanding as at the year end.
20. The Company has not raised any money by public issues during the
year. The Management has disclosed the end use of monies during the
year, out of public issue raised in the earlier year (Refer Note 25 of
Schedule N) which has been verified by us.
21. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the Company, noticed or reported during the year except
that we have been informed by the management of certain instances of
theft of components from stores during the year under audit. Loss due
to theft amounting to Rs. 7.95 lacs (approx) has been reported to
investigating agencies and the Company is conducting its own
assessment. Pending the outcome of these actions the loss has been
adjusted in the books of account and further adjustments, if any, will
be made once the investigations are completed.
For Price Waterhouse
Firm Registration Number: 301112E
New Delhi Partner
May 26, 2011 Membership Number: F87228