SHRIRAM TRANSPORT FINANCE COMPANY LIMITED
ANNUAL REPORT 2011-2012
AUDITORS` REPORT
To,
The Members of
Shriram Transport Finance Company Limited
1. We S.R. Batliboi & Co. ("SRB") and G.D.Apte & Co. ("GDA") have jointly
audited the attached Balance Sheet of Shriram Transport Finance Company
Limited (`the Company`) as at March 31, 2012 and also the Statement of
Profit & Loss and the Cash Flow Statement for the year ended on that date
annexed thereto. These financial statements are the responsibility of the
Company`s management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards generally
accepted in India. Those Standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statements presentation. We believe that our audit
provides a reasonable basis for our opinion.
3. As required by the Companies (Auditor`s Report) Order, 2003 (as amended)
(`the Order`) issued by the Central Government of India in terms of sub-
section (4A) of Section 227 of the Companies Act, 1956 (`the Act`), we
enclose in the Annexure a statement on the matters specified in paragraphs
4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we report
that:
i. We have obtained all the information and explanations, which to the best
of our knowledge and belief were necessary for the purposes of our audit;
ii. In our opinion, proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
books;
iii. The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
iv. In our opinion, the Balance Sheet, Statement of Profit & 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 Act.
v. On the basis of the written representations received from the directors,
as on March 31, 2012, and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on March 31, 2012 from
being appointed as director in terms of clause (g) of sub-section (1) of
section 274 of the Act.
vi. In our opinion and to the best of our information and according to the
explanations given to us, the said accounts 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 the case of the Balance Sheet, of the state of affairs of the Company
as at March 31, 2012;
b) in the case of the Statement of Profit & 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.
For S.R. BATLIBOI & Co. For G. D. Apte & Co.
Firm registration number: 301003E Firm registration number: 100515W
Chartered Accountants Chartered Accountants
per Viren H. Mehta C.M. Dixit
Partner Partner
Membership No.: 048749 Membership No: 17532
Mumbai Mumbai
May 08, 2012 May 08, 2012
ANNEXURE
REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE
RE: SHRIRAM TRANSPORT FINANCE COMPANY LIMITED (`THE COMPANY`)
(i) (a) The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management
during the year but there is a regular programme of verification 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) There was no substantial disposal of fixed assets during the year.
(ii) The Company is a Non-Banking Financial Company (`NBFC`) engaged in the
business of giving loans and does not maintain any inventory. Therefore the
provisions of clause 4(ii) of the Order are not applicable to the Company.
(iii) (a) The Company has granted unsecured loan to one party covered in
the register maintained under section 301 of the Companies Act, 1956. The
maximum amount involved during the year was Rs. 299.99 lacs and the year-
end balance of loans granted to such parties was Rs. 186.76 lacs.
(b) In our opinion and according to the information and explanations given
to us, the rate of interest and other terms and conditions for such loans
are not prima facie prejudicial to the interest of the Company.
(c) In respect of loans granted, repayment of the principal amount is as
stipulated and payment of interest have been regular.
(d) There is no overdue amount of loans granted to companies, firms or
other parties listed in the register maintained under section 301 of the
Companies Act, 1956.
(e) As informed, the Company has not taken any loans, secured or unsecured
from companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956 and therefore provision of
clause iii(f) and iii(g) are not applicable to the Company.
(iv) In our opinion and according to the information and explanations given
to us, there is an adequate internal control system commensurate with the
size of the Company and the nature of its business, for the purchase of
fixed assets and for rendering of services. The activities of the Company
do not involve purchase of inventory and the sale of goods. During the
course of our audit, no major weakness has been noticed in the internal
control system in respect of these areas and accordingly the question on
commenting on whether there is a continuing failure to correct major
weakness in the internal control system of the company does not arise.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Act that need to be entered
into the register maintained under section 301 have been so entered.
(b) In our opinion and according to the information and explanations given
to us, the transactions made in pursuance of such contracts or arrangements
exceeding value of Rupees five lakhs have been entered into during the
financial year at prices which are reasonable having regard to the
prevailing market prices at the relevant time.
(vi) In respect of deposits accepted, in our opinion and according to the
information and explanations given to us, directives issued by the Reserve
Bank of India and the provisions of sections 58A, 58AA or any other
relevant provisions of the Act and the rules framed there under, to the
extent applicable, have been complied with. We are informed by the
management that no order has been passed by the Company Law Board, National
Company Law Tribunal or Reserve Bank of India or any Court or any other
Tribunal.
(vii) In our opinion, the Company has an internal audit system commensurate
with the size and nature of its business.
(viii) To the best of our knowledge and as explained, the Central
Government has not prescribed maintenance of cost records under clause (d)
of sub-section (1) of section 209 of the Companies Act, 1956 for the
products of the Company.
(ix) (a) The Company is regular in depositing with appropriate authorities
undisputed statutory dues including provident fund, investor education and
protection fund, employees` state insurance, income-tax, sales-tax, wealth-
tax, service tax, cess and other material statutory dues applicable to it.
The provisions relating to customs duty and excise duty are not applicable
to the Company
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor education
and protection fund, employees` state insurance, income-tax, wealth-tax,
service tax, sales-tax, cess and other material undisputed statutory dues
were outstanding, at the year end, for a period of more than six months
from the date they became payable. The provisions relating to customs duty
and excise duty are not applicable to the Company.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty
and cess on account of any dispute, are as follows:
Name of the Nature of Amount Years to which Forum where
statute dues (Rs in the amount dispute is
lacs) relates pending
Income Tax Income Tax 4,126.01 A.Y. 2009-10 CIT (Appeals)
Act, 1961 demands
Income Tax Income Tax 500.25 A.Y. 2004-05 CIT (Appeals)
Act, 1961 demands
Finance Service tax 8,406.10 2003-04 to Commissioner of
Act, 1994 on hire 2009-10 Service Tax.
(Service purchase and (Refer Note 7
Tax) lease to the financial
transactions statements)
Finance Service Tax 315.00 2003-04 & Commissioner of
Act, 1994 demands 2004-05 Central Excise
(Service and Customs
Tax)
Andhra Value Added 348.41 2004-05 to Andhra Pradesh
Pradesh Tax 2008-09 High Court.
Value
Added Tax
(x) The Company has no accumulated losses at the end of the financial year
and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial institution,
bank or debenture holders.
(xii) Based on our examination of documents and records, we are of the
opinion that the Company has maintained adequate records where the Company
has granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual
benefit fund / society. Therefore, the provisions of clause 4(xiii) of the
Order, are not applicable to the Company.
(xiv) In respect of dealing/trading in shares, securities, debentures and
other investments, in our opinion and according to the information and
explanations given to us, proper records have been maintained of the
transactions and contracts and timely entries have been made therein. The
shares, securities, debentures and other investments have been held by the
Company, in its own name.
(xv) According to the information and explanations given to us, the Company
has given guarantee for loans taken by others from bank or financial
institutions, the terms and conditions whereof in our opinion are not
primafacie prejudicial to the interest of the Company.
(xvi) To the best of our knowledge and belief and according to the
information and explanations given to us, in our opinion, term loans
availed by the Company were applied by the Company during the year for the
purposes for which the loans were obtained other than funds temporarily
invested pending utilization of the funds for the intended use.
(xvii) According to the information and explanations given to us and on an
overall examination of the balance sheet of the Company, we report that no
funds raised on shortterm basis have been used for long-term investment.
(xviii) The Company has not made any preferential allotment of shares to
parties or companies covered in the register maintained under section 301
of the Act.
(xix) According to the information and explanations given to us, during the
period covered by our audit report, the Company had issued 32,066 and
99,999.93 secured non convertible debentures of Rs 1,000,000 and Rs.1,000
each respectively. The Company has created security or charge in respect of
debentures issued, expect for 5,000 secured non convertible debentures of
Rs. 1,000,000 each which have been issued recently in the month of March.
We are informed by the management that the company is taking steps to
create security for the debentures issued.
(xx) We have verified that the end use of money raised by public issues is
as disclosed in the notes to the financial statements.
(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 by the management, we report that no
fraud on or by the Company has been noticed or reported during the course
of our audit.
For S.R. BATLIBOI & Co. For G. D. Apte & Co.
Firm registration number: 301003E Firm registration number: 100515W
Chartered Accountants Chartered Accountants
per Viren H. Mehta C.M. Dixit
Partner Partner
Membership No.: 048749 Membership No: 17532
Mumbai Mumbai
May 08, 2012 May 08, 2012 |