TVS Motor Company Ltd


BSE: 532343 | NSE: TVSMOTOR | ISIN: INE494B01023 
Market Cap: [Rs.Cr.] 4,221 | Face Value: [Rs.] 1
Industry: Automobiles - Motorcycles / Mopeds

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Auditor's Report

Independent Auditors

to the shareholders of TVS Motor Company Limited,Chennai for the year ended 31st March 2013

To the Members of

TVS Motor Company Limited

'Jayalakshmi Estates', 29 Haddows Road, Chennai - 600006.

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 31stMarch 2013, the Statement of Profit and Loss and Cash Flow Statement for the year ended onthat 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 atrue and fair view of the financial position, financial performance and cash flows of theCompany in accordance with the Accounting Standards referred to in sub-section (3C) ofSection 211 of the Companies Act, 1956 ("the Act"). This responsibility includesthe design, implementation and maintenance of internal control relevant to the preparationand presentation of the financial statements that give a true and fair view and are freefrom material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those Standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, the auditorconsiders internal control relevant to the Company's preparation and fair presentation ofthe financial statements 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 management, aswell as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us, the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31stMarch 2013;

b) in the case of the Statement of Profit and Loss, of the profit for the year ended onthat date; and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on thatdate.

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 ofthe Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and5 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 ourknowledge 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 theCompany so far as appears from our examination of those books;

c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt withby this Report are in agreement with the books of account;

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash FlowStatement comply with the Accounting Standards referred to in sub-section (3C) of Section211 of the Companies Act, 1956; and

e) on the basis of written representations received from the directors as on 31stMarch 2013, and taken on record by the Board of Directors, none of the directors isdisqualified as on 31st March 2013, from being appointed as a director in termsof clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

For Sundaram & Srinivasan
Chartered Accountants
Firm Regn. No.: 004207S
M. BALASUBRAMANIYAM
Place: Bengaluru Partner
Date : 30th April 2013 Membership No.: F7945

Annexure referred to in our report of even date on the accounts for the year ended 31stMarch 2013.

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

(b) Fixed assets are physically verified by the management at reasonable intervals. Inour opinion, the interval is reasonable having regard to the size of the Company and thenature 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 notaffect the going concern status of the Company.

(ii) (a) The inventory has been physically verified at reasonable intervals during theyear 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, theprocedures for physical verification of inventory followed by the management werereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

(c) In our opinion, the Company has maintained proper records of inventory. Thediscrepancies between the physical stocks and the book stocks were not material and havebeen properly dealt with in the books of account.

(iii) (a) During the year, the Company has granted loans and advances to two Companiescovered in the register maintained under Section 301 of the Companies Act, 1956 amountingto 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 suchloans and advances are made are not prima facie prejudicial to the interest of theCompany. Interest is not charged on loan advanced to a wholly owned subsidiary of theCompany.

(c) The recovery of principal amount and interest thereon were in accordance with theterms of loan.

(d) As on the date of Balance Sheet, there was no overdue amount recoverable on thesaid loan.

(e) During the year, the Company has not taken loan from any party covered in theregister 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 Companyand the nature of its business, with regard to purchase of inventory, fixed assets and forthe sale of goods and services. During the course of our audit, no minor or majorcontinuing failure has been noticed in the internal control system.

(v) (a) Based on the audit procedures applied by us and according to the informationand explanations provided by the management, we are of the opinion, that the contracts orarrangements that need to be entered in the register maintained under Section 301 of theCompanies 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 partyhave been made at prices which are reasonable having regard to the prevailing marketprices 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 commensuratewith its size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuantto 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 andare of the opinion that prima-facie, the prescribed accounts and records have been madeand maintained.

(ix) (a) According to the records provided to us, the Company is regular in depositingundisputed statutory dues including Provident Fund, Employees' State Insurance, InvestorEducation and Protection Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, CustomsDuty, 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 amountspayable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, ExciseDuty and Cess were in arrears as at 31st March 2013 for a period of more thansix months from the date they became payable.

(c) According to the information and explanations given to us, the following are thedetails of the disputed dues that were not deposited with the authorities concerned.

Name of the Statute Nature of dues Amount (Rs. in Cr) Forum where dispute is pending
Central Excise Act, 1944 Cenvat / Excise dues A 28.50 Central Excise and Service Tax Appellate 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 Tax A 4.26 Assistant / Deputy / Commissioner of Central Excise, Hosur and Mysore
B 0.77 Central Excise and Service Tax Appellate Tribunal, Chennai
Customs Act, 1962 Customs Duty A 0.06 Assistant / Deputy / Commissioner of Central Excise, Hosur and Mysore
B 1.87 High Court of Judicature at Madras
The Tamil Nadu Tax on Consumption or Sale of Electricity Act, 2003 read with Amendment Act, 2007 Electricity Tax A 4.61 High Court of Judicature at Madras
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, 1961 Income Tax & Interest thereon A 34.24 Commissioner of Income Tax (Appeals)
B 5.20 High Court of Judicature at Madras

(x) The Company neither has accumulated losses as at the end of the financial year norhas incurred cash losses during the financial year and in the immediately precedingfinancial year.

(xi) Based on our verification and according to the information and explanations givenby 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 givento us, the Company has not granted loans and advances on the basis of security by way ofpledge of shares, debentures and other securities.

(xiii) The Company is not a chit/nidhi/mutual benefit fund/ society and as such thisclause of the Order is not applicable.

(xiv) The Company is not dealing or trading in shares, securities, debentures and otherinvestments other than in mutual fund investments. Proper records have been maintained inrespect of these transactions and contracts and timely entries have been made therein. Theinvestments have been held by the Company in its own name except to the extent ofexemption granted under Section 49 of the Act, in respect of shares held in subsidiarycompanies through the nominees.

(xv) In our opinion, the terms and conditions of guarantees given by the Company forloans 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 theloans were obtained.

(xvii) On the basis of our examination, the Company has not used funds raised onshort-term basis for long term investments.

(xviii) During the year, the Company has not allotted any shares on preferential basisto parties and Companies covered in the Register maintained under Section 301 of theCompanies 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 tous by the management, no fraud on or by the Company has been noticed or reported duringthe 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
   

Peer Comparison

Company Market Cap
(Rs. in Cr.)
P/E (TTM)
(x)
P/BV (TTM)
(x)
EV/EBIDTA
(x)
ROE
(%)
ROCE
(%)
D/E
(x)
Hero Motocorp 44,287.47 20.80 8.85 8.49 40.7 37.5 0.15
TVS Motor Co. 4,221.26 17.59 3.45 6.31 14.8 15.3 0.61
Kinetic Engg. 51.84 0.00 1.46 59.66 0.0 0.0 2.86
Majestic Auto 43.84 0.00 0.59 10.13 -7.6 0.9 1.53

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Key Information

Key Executives:

Venu Srinivasan , Chairman & Managing Director  

H Lakshmanan , Director  

T Kannan , Director  

C R Dua , Director  


Company Head Office / Quarters:
Jayalakshmi Estates,
29(Old No 8) Haddows Road,
Chennai,
Tamil Nadu-600006
Phone : 91-044-28272233
Fax : 91-044-28257121
E-mail : ks.srinivasan@scl.co.in
Web : http://www.tvsmotor.in
Registrars:
Sundaram-Clayton Limited
Jayalakshmi Estates
29 Haddows Road

Chennai - 600006

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