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Auditor Report of TVS Motor Company Ltd.

Mar 31, 2015

1. We have audited the accompanying standalone financial statements of TVS Motor Company Limited, Chennai (''the Company''), which comprises the Balance Sheet as at 31 March, 2015, the Statement of Profit and Loss and the 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

2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these Standalone 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 principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

3. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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

4. Our responsibility is to express an opinion on these Standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance 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 the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

5. 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 financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

6. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone financial statements.

Opinion

7. 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, of the state of affairs of the Company as at 31st March 2015, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

8. As required by the Companies (Auditor''s Report) Order, 2015 (''the Order''), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 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 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, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the aforesaid Standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) on the basis of written representations received from the directors as on 31 March 2015, and taken on record by the Board of Directors, none of the directors are disqualified as on 31 March 2015, from being appointed as a director in terms of Section 164 (2) of the Act; and

(f) With respect to other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 financial position in its financial statements - Refer Note 12(a) to the financial statements.

ii. the Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses - Refer Note 2 to the financial statements.

iii. there have been no delays in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure referred to in our report of even date on the accounts for the year ended 31st March 2015

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular program of physically verifying all the fixed assets at its plants/ offices in a phased manner over a period of 2 years, which in our opinion 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.

(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 nature of its business.

(c) In our opinion, the Company has maintained proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book stocks were not material and have been properly dealt with in the books of account.

(iii) The Company has granted unsecured loans to companies covered in the register maintained under Section 189 of the Companies Act 2013, the recovery of principal and interest thereon, wherever stipulated, is regular.

(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) According to the information and explanations given to us, the Company has not accepted 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 not prescribed maintenance of cost records under Section 148(1) of the Companies Act, 2013 read with the Companies (cost records and audit) Rules 2014, for any of the products manufactured / services rendered by the Company.

(vii) (a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues payable including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax and Cess and other statutory dues with the appropriate authorities.

(b) 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 /value added tax/ 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 1986-2015 42.96 Service Tax Appellate Tribunal, Chennai

Central Excise Assistant/Deputy/ Act, 1944 2005-2014 2.08 Commissioner of Central (Cenvat/Excise Duty) Excise, Hosur and Mysore

Hon''ble High Court of 2008-2010 0.07 Karnataka

2005-2014 10.11 Hon''ble Supreme Court

Assistant/Deputy/ 1999-2014 4.63 Commissioner of Central Finance Act, 1994 Excise, Hosur and Mysore (Service Tax) Central Exciseand Service

2005- 2006 0.22 Tax Appellate Tribunal, Chennai/Bangalore

Assistant/Deputy/ 2011-2012 0.09 Commissioner of Central Customs Act, 1962 Excise, Hosur and Mysore (Customs Duty)

1999-2001 1.87 Hon''ble High Court of Judicature at Madras

1998-2014 0.90 Department Authorities

Sales Tax / VAT Laws 1998-2013 0.37 Tribunals (Sales Tax) Hon''ble High Court of

2006-2012 0.05 Orissa

Income Tax Act, 1961 (|ncome Tax and 2009-2010 87.31 Commissioner of Income Interest thereon) Tax (Appeals)

(c) According to the information and explanations given to us, the amount required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act 1956 and rules made thereunder have been transferred by the Company to the fund within time.

(viii) 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.

(ix) 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. The Company has not raised any monies against issue of debentures.

(x) 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 from banks or financial institutions are not prejudicial to the interest of the Company.

(xi) In our opinion, the term loans availed by the Company have been applied for the purpose for which they were obtained.

(xii) 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 Chartered Accountants Firm Regn. No.: 109208W

S. VENKATRAMAN Place: Bengaluru Partner Date : 29th April 2015 Membership No.: 34319


Mar 31, 2014

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


Mar 31, 2012

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 Order.

3. Further to our comments in the Annexure referred to above, we state 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 accounts as required by law have been kept by the Company so far as it appears from our examination of such 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 accounts;

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 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. 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 of account.

(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 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 payments of Employees' State Insurance and National Calamity Contingent Duty.

(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 Tribunal, Chennai

(b) 41.54 Assistant / Deputy / Commissioner of Central Excise, Hosur and Mysore

(c) 0.24 High Court of Karnataka

(d) 7.32 Supreme Court

Finance Service Tax (a) 5.84 Assistant / Deputy / Act, 1994 Commissioner of Central Excise, Hosur and Mysore

(b) 2.43 Central Excise and Service Tax Appellate Tribunal, Chennai

Customs Act, Customs 1.87 High Court of 1962 Duty Judicature at Madras

Sales Tax / Sales tax (a) 2.69 Dept Authorities VAT Laws (b) 0.61 Tribunals

(c) 0.20 High Court of Karnataka

(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 Sale of Electricity Act, 2003 read with Amendment Act, 2007

Income Tax Act, Income Tax 1961 & Interest (a) 21.97 High Court of thereon Judicature at Madras, Chennai

(b) 15.75 Income Tax Appellate Tribunal

(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 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 : May 24, 2012 Membership No.: F7945


Mar 31, 2011

We have audited the attached Balance Sheet of TVS MOTOR COMPANY LIMITED, Chennai - 600 006 as at 31st March 2011 and the Profit and Loss Account 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 statement. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditors' 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 Order.

3. Further to our comments in the Annexure referred to above, we state that:

(i) 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;

(ii) 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 such books;

(iii) the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts;

(iv) 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 Companies Act, 1956;

(v) on the basis of written representations received from the directors of the Company as on 31st March 2011 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;

(vi) 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 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.

(a) in so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March 2011;

(b) in so far as it relates to the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

(c) in so far as it relates to the Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure referred to in our report of even date on the accounts for the year ended 31st March 2011

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets

(b) Fixed assets are verified physically 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 of account.

(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. 83.82 crores (Balance due as at the year end Rs.147.38 crores from five 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 not taken any loan, secured or unsecured, from companies, firms or other parties 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 two payments dealt with herein.

(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 2011 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) 3.88 Central Excise and Act, 1944 Excise dues Service Tax Appellate Tribunal, Chennai

(b) 39.95 Assistant / Deputy / Commissioner of Central Excise, Hosur and Mysore

(c) 0.24 High Court of Karnataka

(d) 4.68 Supreme Court

Finance Service Tax (a) 6.94 Assistant / Deputy / Act, 1994 Commissioner of Central Excise, Hosur and Mysore

(b) 7.91 Central Excise and Service Tax Appellate Tribunal, Chennai

Customs Act, Customs 1.13 Commissioner of 1962 Duty Customs, Chennai

Sales Tax / Sales tax (a) 1.66 Dept. Authorities

VAT Laws (b) 1.01 Tribunals

(c) 0.60 Supreme Court

Karnataka Electricity 0.35 Supreme Court Electricity Tax (Taxation on Consumption Act, 1959)

The Tamil Nadu Electricity 0.18 High Court of Tax on Tax Judicature at Madras, Consumption or Chennai Sale of Electricity Act, 2003 read with Amendment Act, 2007

Income Tax Act, Income Tax 1961 & Interest (a) 27.70 High Court of thereon Judicature at Madras, Chennai

(b) 19.86 Income Tax Tribunal

(c) 12.87 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 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 share on preferential basis to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956. However, 13,63,41,393 no. of equity shares have been allotted as bonus shares to Sundaram-Clayton Limited, Chennai (2,10,00,000 nos.) and Anusha Investments Limited, Chennai (11,53,41,393 nos.).

(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. However, the Company has issued bonus equity shares.

(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:Chennai Partner

Date :July 29, 2011 Membership No.: F7945










Mar 31, 2010

We have audited the attached Balance Sheet of TVS MOTOR COMPANY Limited, Chennai - 600 006 as at 31st March, 2010 and the Profit and Loss Account 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 Companys 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 (Auditors 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 Order.

3. Further to our comments in the Annexure referred to above, we state 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 accounts as required by law have been kept by the Company so far as appears from our examination of such books;

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts;

(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 Companies Act, 1956;

(e) On the basis of written representations received from the Directors of the Company as on 31st March, 2010 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 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.

(a) in so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

(b) in so far as it relates to the Profit and Loss Account, of the profit of the Company for the year ended on that date; and

(c) 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. Annexure referred to in our report of even date on the accounts for the year ended 31st March 2010

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification at reasonable intervals, which, in our opinion, 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 other than in-transit 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 of account.

(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.98.50 crores (Balance due as at the year end Rs. 145.29 crores from five 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 receipt of principal amount and interest thereon were regular.

(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 not taken any loan, secured or unsecured, from the Companies covered 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 major weakness 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 and exceeding in 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.

(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, 2010 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 concerned authorities.

Name of the Nature of Amount Forum where the

statute dues (Rs. in Cr.) dispute is pending

Central Excise Cenvat/Excise (a) 3.34 Central Excise and

Act, 1944 dues Service Tax Appellate

Tribunal, Chennai

(b) 24.58 Asst./Deputy/ Commissioner

of Central Excise, Hosur and Mysore

Finance Service (a) 6,75 Asst. /Deputy/

Act, 1994 Tax Commissioner of

Central Excise,

Hosur and Mysore

(b) 7.91 Central Excise and Service Tax Appellate Tribunal, Chennai

Customs Act, 1962 Customs Duty 1.13 Commissioner of

Customs, Chennai

Sales Tax / VAT Laws Sales Tax (a) 1.66 Dept. authorities

(b) 1.14 Tribunals

(c) 0.60 Supreme Court

Karnataka Electricity Electricity Tax 0.45 High Court of

(Taxation on Judicature,

Consumption) Bangalore

Act, 1959

The Tamil Nadu Tax Electricity Tax 0.18 High Court of

on Consumption or Judicature at Madras,

Sale of Electricity Chennai

Act, 2003 read with

Amendment Act, 2007

Income Tax Act, 1961 Income Tax & (a) 27.70 High Court of

Interest there on Judicature at Madras,

Chennai

(b) 15.56 Income Tax

Tribunal,

(c) 12.87 Commissioner of

Income-Tax (Appeals)

(x) The Company neither has accumulated losses at the end of the 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 fund / 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 Bengaluru Partner

July 21, 2010 Membership No.F7945

 
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