To the Members of TVS Motor Company Limited
Report on the Standalone Ind AS Financial Statements
1. We have audited the accompanying standalone Ind AS financial statements of TVS MotorCompany Limited (the Company') which comprises the Balance Sheet as at 31 March2018 the Statement of Profit and Loss (including Other Comprehensive Income) the CashFlow Statement and the Statement of Changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Ind
AS Financial Statements
2. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder Section 133 of the Act.
3. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
4. Our responsibility is to express an opinion on these Standalone Ind AS financialstatements based on our audit. In conducting our audit we have taken into account theprovisions of the Act the accounting and auditing standards and matters which arerequired to be included in the audit report under the provisions of the Act and the Rulesmade thereunder. We conducted our audit of the standalone Ind AS financial statements inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whetherthe standalone Ind AS financialstatements are free from material misstatement.
5. An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.
6. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone Ind AS financial statements.
7. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2018 and its profit total comprehensive income its cash flowsand the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
8. As required by the Companies (Auditor's Report) Order 2016 (the Order')issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters specified in paragraphs 3and 4 of the said Order to the extent applicable.
9. As required by section 143(3) of the Act we report that:
(a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;
(b) in our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;
(c) the Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Cash Flow Statement and Statement of Changes
in Equity dealt with by this report are in agreement with the books of account;
(d) in our opinion the aforesaid Standalone Ind AS financial statements comply withthe Accounting Standards prescribed under Section 133 of the Act;
(e) on the basis of written representations received from the directors as on 31stMarch 2018 and taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2018 from being appointed as a director in terms of section164 (2) of the Act;
(f) with respect to the adequacy of the internal financial controls over financialreporting of the company and the operating effectiveness of such controls refer to ourseparate report in Annexure B; and
(g) with respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to explanations given to us:
i. the Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note No. 36(a) to the Standalone Ind ASfinancial statements.
ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses - Refer Note No. 28(D) to the StandaloneInd AS financial statements.
iii. there has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.
Annexure A to Independent Auditor's Report - 31 March 2018 (Referred to in our reportof even date)
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The company has a regular program of physically verifying all the fixed assets atits plants/offices in a phased manner over a period of 2 years which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Nomaterial discrepancies as compared to book records were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
(ii) The inventories have been physically verified by the management during the year.In our opinion the frequency of physical verification is reasonable. The discrepanciesnoticed on verification between the physical stocks and the book stocks were not materialand have been properly dealt with in the books of account.
(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to Companies Firms Limited LiabilityPartnerships or other parties covered in the Register maintained under Section 189 of theAct. Accordingly the provisions of clause (iii) of para 3 of the Order are not applicableto the Company.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable.
(v) According to the information and explanations given to us the Company has notaccepted any deposits from the public. Therefore the provisions of clause
(v) of the para 3 of the Order are not applicable to the Company.
(vi) The Central Government has prescribed the maintenance of cost records undersection 148 (1) of the Act in respect of certain products manufactured by the Company. Wehave broadly reviewed the books of account maintained by the Company pursuant to the rulesmade by the Central Government for the maintenance of cost records under Sec 148(1) of theAct and are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained.
(vii) (a) According to the records of the Company the
Company is generally regular in depositing undisputed statutory dues payable includingProvident Fund Employees' State Insurance Income Tax Goods and Service Tax Sales TaxWealth Tax Service Tax Customs Duty Excise Duty Value Added Tax and Cess and othermaterial statutory dues with the appropriate authorities. According to the information andexplanations given to us no undisputed amounts payable in respect of Income Tax Goodsand Service Tax Sales Tax Wealth Tax Service Tax Customs Duty Excise Duty and Cesswere in arrears as at 31st March 2018 for a period of more than six months from the datethey became payable.
(b) According to the information and explanations given to us and the records of theCompany the dues of sales tax I income-tax I customs duty I wealth tax I service tax Iexcise duty I value added tax I cess which have not been deposited on account of anydispute are as follows:
|Name of the Statute / (Nature of dues) ||Period of dues ||Amount (Rs. in crores) ||Forum where dispute is pending |
|Central Excise Act1944 (Cenvat/Excise Duty) ||1998-2015 ||51.98 ||Central Excise and Service Tax Appellate Tribunal Chennai |
|1999-2016 ||8.60 ||Assistant/Deputy/ Commissioner of Central Excise Hosur and Mysore |
|Finance Act1994 (Service Tax) ||2007-2016 ||0.04 ||Assistant/Deputy/ Commissioner of Central Excise Hosur and Mysore |
|2002-2014 ||1.45 ||Central Excise and Service Tax Appellate Tribunal Chennai/Bangalore |
|Customs Act1962 (Customs Duty) ||1999-2001 ||1.36 ||Hon'ble High Court of Judicature Chennai |
| ||1998-2016 ||1.41 ||Assessing officer |
|Sales Tax/VAT Laws (Sales Tax) ||2004-2005 ||0.04 ||Joint Commissioner (Appeals) |
|1998-2010 ||0.33 ||Tribunals |
| ||2006-2015 ||0.05 ||Hon'ble High Court of Orissa |
|Income Tax Act1961 - TDS (Income Tax and Interest thereon) ||2007-2017 ||0.64 ||Department Authorities |
|Wealth Tax Act1957 ||2007-2009 ||0.98 ||Commissioner Appeal |
|Income Tax Act1961 - (Income Tax and Interest thereon) ||2014-2015 ||11.67 ||Commissioner Appeal |
(viii) On the basis of verification of records and according to the information andexplanations given to us the Company has not defaulted in repayment of loans orborrowings to Financial Institutions Government and Banks. The Company has not raised anymonies against issue of debentures.
(ix) According to the information and explanations given to us during the year theCompany has not availed any term loans nor raised any monies by way of initial publicoffer or further public offer (including debt instruments).
(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and as per the information and explanations given tous by the Management no material fraud by the Company and no fraud on the company by itsofficers or employees has been noticed or reported during the year.
(xi) In our opinion and according to the information and explanations given to us theCompany has paid I provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable.
(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and Section 188 of the Act where applicablefor all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures. Accordingly the provisionsof clause (xiv) of para 3 of the Order are not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him and hence provisions of section 192 of the Act arenot applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
Annexure - B to the Independent Auditor's Report - 31 March 2018 (Referred to in ourreport of even date)
Report on the Internal Financial Controls under Clause
(i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
1. We have audited the internal financial controls over financial reporting of TVSMotor Company Limited ("the Company") as of March 31 2018 in conjunction withour audit of the standalone Ind AS financial statements of the Company for the year endedon that date.
Managements Responsibility for Internal Financial Controls
2. The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
3. Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
8. In ouropinion the Company has in all material respects an adequate internalfinancial control system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Control over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For V Sankar Aiyar & Co |
| ||Chartered Accountants |
| ||FRN: 109208W |
| ||S VENKATRAMAN |
|Chennai ||Partner |
|16th May 2018 ||(Membership Number: 34319) |