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Auditor Report of Sri Ramakrishna Mills (Coimbatore) Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Sri Ramakrishna Mills (Coimbatore) Limited (‘the Company'), which comprise the Balance Sheet as at 31st 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

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 and presentation 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 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. 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.

Auditor's Responsibility

Our responsibility is to express an opinion on these 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 there under.

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.

An audit involves performing procedures to obtain audit evidence about the amounts and the 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 in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the 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.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 Loss and its cash flows for the year ended on that date.

Emphasis of Matters

The Company being an ineligible company to retain deposits including loans ought to have repaid all the deposits and loans before 31st March 2015. However, in respect of 8 parties, the Company is yet to repay loans to the extent of Rs 2,57,37,284/-.

Report on Other Legal and Regulatory Requirements

1. 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 the paragraph 3 and 4 of the Order, to the extent applicable.

2. 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 purposes of our audit.

b) 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;

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 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 the written representations received from the directors as on 31 March 2015 taken on record by the Board of Directors, none of the directors is 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 the 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 the explanations given to us:

i) The Company has disclosed its pending litigations under note no 2 in additional disclosure- Note 27.

ii) The Company does not have any long-term contracts including derivative contracts for which there were any material foreseeable losses

iii) Transferring of amount to the Investor Education and Protection Fund does not arise as the Company has not declared any dividend in the earlier years.

Annexure to the Independent Auditors' Report

The Annexure referred to in our Independent Auditors' Report to the members of the Company on the financial statements for the year ended 31st March 2015, we report that:

1 a The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b The company has physically verified fixed assets during the year in accordance with a regular and phased programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the company and nature of its assets. According to the information and explanations given to us no material discrepancies were noticed on such verification.

2 a As explained to us, inventories have been physically verified by the management at regular intervals during the year.

b In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories 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 and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification as compared to the book records.

3 The company, during the year, has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013, during the financial year. Hence, Clause (b) and (c) is not applicable.

4 In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and nature of its business for the purchase of inventory, fixed assets and also for the sale of goods and services. We have not observed any major weaknesses in internal control systems during the course of our audit.

5 The Company being an ineligible Company to retain deposits and loans ought to have repaid all fixed deposits and loans before 31st March 2015. Although the Company repaid all the fixed deposits before 31st March 2015, yet has not repaid 8 loans to the extent of Rs 2,57,37,284/-.

6 We have broadly reviewed the cost records maintained by the company specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, as applicable to the company, and are of the opinion that prima facie the specified cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

7 a According to the information and explanations given to us and on the basis of our examination of the records of the Company, subject to (ii) stated below, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of employees' state insurance and duty of excise.

According to the information and explanation given to us, the undisputed arrears of statutory dues which were outstanding as at 31st March 2015 for a period of more than Six months from the date they became payable are as follows:

Nature of Statute Amount Year to which it relates

Income tax 17 13 585 A.Y 2010-11

b According to the information and explanations given to us, the statutory dues which have not been deposited on account of dispute are as follows:

Name of the Nature of the Dues Amount [Rs.] Statute (in lakhs)

TNGST Addl. Sales tax 7.43

TNGST Sales tax 54.59

TNGST Sales tax 89.37

TNGST* Sales Tax 61.66*

TNGST TNGST, AST 121.97

Customs Customs duty on Cotton 8.26

APEB Fuel Surcharge adjustment 3.20

Name of the Period to which the amount Forum where dispute is Statue relates pending

TNGST A.Y2004-05 to A.Y.2006-07 Madras High Court

TNGST A.Y.1995-96 Madras High Court

TNGST A.Y.1999-00 Madras High Court

TNGST* A.Y.1998-99 Madras High Court

TNGST A.Y.2000-01 Madras High Court

Customs A.Y.2003-04 Madras High Court

APEB July 2012 and November 2012 AP High Court

* [Rs.31 lakhs, since paid]

c Transferring of amount to the Investor Education and Protection Fund does not arise as the Company has not declared any dividend in the earlier years.

8 The Company has accumulated losses amounting to Rs. 13,50,08,056/- as at 31st March 2015. The Company has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

9 In our opinion and according to the information and explanation given to us, the company has not defaulted in repayment of dues to any of the banks.

10 According to the information and explanations given to us the company has not given any guarantee for loans taken by others from banks or financial institutions.

11 In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

12 To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year that causes the financial statements to be materially misstated.

For M.S. Jagannathan and Visvanathan Chartered Accountants Firm Regd No: 001209 S

M.V. JEGANATHAN Place: Coimbatore Partner Date : 28-05-2015 M. No. 214178


Mar 31, 2014

1 We have audited the accompanying financial statements of SRI RAMAKRISHNA MILLS [COIMBATORE] LIMITEDwhich comprise the Balance Sheet as at 31 March 2014, the Statement of Profit and Loss and the Cash Flow St atement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements:

2. Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance of the Company in accordance with the Account -ing Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ( the Act ) read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. 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.

Auditor''s Responsibility:

3. 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.

4. 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. 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.

5. W e believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion:

6. 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 confor mity with the accounting principles generally accepted in India!

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2014;

(ii) In the case of the Statement of P rofit and Loss, of the LOSS for the year ended on that date) and

(iii) In the case of the Cash Flow St atement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements:

7. As required by the Companies (Auditor s Report) Order, 2003 (" the Order ), as amended, 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.

8. As required by section 227(3) of the Act, we report that!

a. We have obtained all the infor mation 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 R eport are in agreement with the books of account)

d. In our opinion, the Balance Sheet and Statement of Profit and Loss comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 and

e. On the basis of written representations received from the directors as on 31 March 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 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.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

The Annexure referred to in paragraph 7 of our report of even date to the members of M/s SRI RAMAKRISHNA MILLS (CBE) LIMITED('' the Company ) for the year ended 31st March 2014:

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

b The fixed assets have been physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year. Dis crepancies noticed on such physical verification were not material and have been properly dealt with in books of accounts.

c There were no sale of substantial part of fixed assets during the year and hence the going concern of the company is not affected.

ii) a Physical verification of Inventory [excluding stocks with third parties] has been conducted at reasonable intervals by the Management. In respect of inventory lying with third parties, these have substanti -ally been confirmed by them. In our opinion, the frequency of verific -ation is reasonable.

b The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c The company has maintained proper records of inventory and discrepancies noticed on physical verification of inventories as compared to book records were not material and have been appropriately dealt with.

iii) a During the year, the Company has not granted any loans, secured or unsecured to parties covered in the register maintained under section 301 of the Companies Act, 1956 and hence sub clauses b, c & d of clause (iii) are not applicable

b During the year, the company has taken unsecured loans amounting to Rs.5,03,56,122/- from two parties covered in the register maintained under section 301 of the Act .

c The rate of interest and other terms and conditions of the unsecured loans taken are not prima facie prejudicial to the interest of the company.

iv) a In our opinion and according to the explanation and information given to us, there are adequate internal control procedures commensur -ate with the size of the Company and the nature of the business for the purchase of inventory and fixed assets and for the sale of goods.

b During the course of our Audit no major weakness has been noticed in the internal controls.

v) a The transactions made in pursuance of contracts or arrangements, that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been recorded in the register maintained for the purpose.

b In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Act, have been made at prices which are reasonable having regard to the Prevailing Market prices at the relevant time other than for conversion charges received amounting to Rs.35,29,825/- (Net) for which no comparable market prices were available and are considered to be of special nature as explained by the management of the Company.

vi) In our opinion and according to the information and explanations given to us the company has complied with the provisions of section 58A and 58AA of the Companies Act, 1956 and the Companies [Acceptance of Deposits] Rules 1975 with regard to the deposits accepted from the public. No order has been passed by the National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vii) In our opinion and according to the information and explanations given to us, the internal audit was carried out by an external Chartered Accountant and is commensurate with the size of the company and the nature of its business.

viii) We have broadly reviewed the books of accounts maintained by the Company pursuant to the order made by the Central Government for the maintenance of cost records under section 209(1) (d) of the companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix) a According to the information and explanation given to us and records examined by us, the company Subject tO (b) stated belowis regular in depositing undisputed statutory dues including Investor Education and Protection Fund, Income Tax, Value Added Tax, Wealth Tax, Service Tax and any other statutory dues with the appropriate authorities. b According to the information and explanation given to us, the undisputed arrears of statutory dues which were outstanding as at 31st March 2014 for a period of more than Six months from the date they became payable are as follows:

Name of the Statute Amount Period to which the

Income tax 13,00,000/- A.Y 2010-2011

c According to the information and explanations given to us, the statutory dues which have not been deposited on account of dispute are as follows:

Name of Nature of the Amount Period to which the Statute Dues (in lakhs) the amount relates

TNGST Addl.Sales tax 7.43 A.Y2004-05 to A.Y2006-07

TNGST Sales tax 54.59 A.Y 1995-96

TNGST Sales tax 89.37 A.Y 1999-00

TNGST* Sales Tax 61.66* A.Y 1998-99

TNGST TNGST, AST 121.97 A.Y2000-01

Customs Customs duty 8.26 A.Y2003-04 on Cotton

APEB Fuel Surcharge 3.20 July 2012 and adjustment November 2012

Name of the Statue Formate dispute is pending

TNGST Madras High Court

TNGST Madras High Court

TNGST Madras High Court

TNGST Madras High Court

TNGST Madras High Court

Customs Madras High Court

APEB AP High Court

x) The company has accumulated loss of Rs.9,75,29,199/- for the year ended 31st March 2014 and it has incurred cash losses both during the current financial year and in the immediately preceding financial year.

xi) In our opinion and according to the information and explanation given to us the company has not defaulted in repayment of dues to any of the banks.

xii) During the year, the Company has not 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/society. Therefore, c lause 4(xiii) of the Companies (Auditors Report) order 2003 is not applicable to the Company.

xiv) In our opinion and according to the information and explanation given to us, the Company is not dealing or trading in Shares, Securities, debentures and other Investments.

xv) In our opinion and according to the information and explanation given to us, the company, during the year has not given any guarantee for loans taken by others from banks or financial institutions.

xvi) In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

xvii) According to the information and explanation given to us and on an overall examination of the Balance sheet of the company, we report thatfunds raised on

short term basis to the extent of Rs 5,22,33,094/- have been used for long-term

xviii) The Company has not made any preferential allotment of shares during the year to the parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

xix) The C ompany has not issued any debentures during the financial year and hence creation of security in respect thereof does not arise.

xx) The C ompany has not raised any money through a public issue during the year.

xxi) Based upon the audit procedures performed and 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 M.S.Jagannathan & Visvanathan Chartered Accountants Firm R egistration No. 001209S Place! Coimbatore (sd.) M.J.VIJAYARAGHAVAN Date ! 14.08.2014 Partner M.No.7534


Mar 31, 2013

Report on the Financial Statements:

We have audited the accompanying financial statements of SRI RAMAKRISHNA MILLS [COIMBATORE] LIMITED which comprise the Balance Sheet as at 31 March 2013, 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:

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 in''ernal 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.

Auditor''s 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 auditor1 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. 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:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2013;

(ii) In the case of the Statement of Profit and Loss, of the LOSS for the year ended on that date; and

(iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditor" s Report) Order, 2003 ("the Order"), as amended, 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 Row Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956; and

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

ANNEXURE TO THE AUDITORS* REPORT

The Annexure referred to in our report to the Members of SRI RAMAKRISHNA MILLS [COIMBATORE] UMITED for the year ended 31 March 2013. We report that: i) a The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets. b The fixed assets have been physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year discrepancies noticed on such physical verification were not material and have been properly dealt with in books of accounts. c There were no sale of substantial part of fixed assets during the year and hence the going concern of the company is not affected. ii) a Physical verification of Inventory [excluding stocks with third parties] has been conducted at reasonable intervals by the Management. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable. b The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. c The company has maintained proper records of inventory and discrepancies noticed on physical verification of inventories as compared to book records were not material and have been appropriately dealt with. iii) a During the year, the Company has not granted any loans, secured or unsecured to parties covered in the register maintained under section 301 of the Companies Act, 1956 and hence sub clauses b, c & d of clause (iii) are not applicable b During the year, the company has taken unsecured loans amounting to Rs.33,44,451/- from one party covered in the register maintained under section 301 of the Act. c The rate of interest and other terms and conditions of the unsecured loans taken are not prima facie prejudicial to the interest of the company. iv) a In our opinion and according to the explanation and information given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of the business for the purchase of inventory and fixed assets and for the sale of goods. b During the course of our Audit no major weakness has been noticed in the internal controls. v) a The transactions made in pursuance of contracts or arrangements, that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been recorded in the register maintained for the purpose b In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Act, have been made at prices which are reasonable having regard to the Prevailing Market prices at the relevant time other than for conversion charges paid amounting to Rs.80,45,320/- (Net) for which no comparable market prices were available and are considered to be of special nature as explained by the management of the Company. vi) In our opinion and according to the information and explanations given to us the company has complied with the provisions of section 58A and 58AA of the Companies Act, 1956 and the Companies [Acceptance of Deposits] Rules 1975 with regard to the deposits accepted from the public. No order has been passed by the National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal. vii) In our opinion and according to the information and explanations given to us, the internal audit was carried out by an externa] Chartered Accountant and is commensurate with the size of the company and the nature of its business. viii) We have broadly reviewed the books of accounts maintained by the Company pursuant to the order made by the Central Government for the maintenance of cost records under section 209(1) (d) of the companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete. ix) a According to the information and explanation given to us and records examined by us, the company subject to (b) stated below is regular in

depositing undisputed statutory dues including Investor Education and Protection Fund, Income Tax, Value Added Tax, Wealth Tax, Service Tax and any other statutory dues with the appropriate authorities. b According to the information and explanation given to us, the undisputed arrears of statutory dues which were outstanding as at 31st March 2013 for a period of more than six months from the date they became payable are as follows:

Name of the Statute Amount Period to which the

(Rs.) amount relates

The Income tax Act, 1961 17,13,585 A.Y2010-2011

x) The company has accumulated loss of Rs.625,24,472 /- for the year ended 31st March 2013 and it has incurred cash losses both during the current financial year and in the immediately preceding financial year.

xi) In our opinion and according to the information and explanation given to us the company has not defaulted in repayment of dues to any of the banks.

xii) During the year, the Company has not 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/society. Therefore, clause 4(xiii) of the Companies (Auditors Report) order 2003 is not applicable to the Company

xiv) In our opinion and according to the information and explanation given to us, the Company is not dealing or trading in Shares, Securities, debentures and other Investments.

xv) In our opinion and according to the information and explanation given to us, the company, during the year has not given any guarantee for loans taken by others from banks or financial institutions.

xvi) In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

xvii) According to the information and explanation given to us and on an overall examination of the Balance sheet of the company, we report that no funds raised on short term basis have been used for long-term investment.

xviii) The Company has not made any preferential allotment of shares during the year to the parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

xix) The Company has not issued any debentures during the financial year and hence creation of security in respect thereof does not arise.

xx) The Company has not raised any money through a public issue during the year.

xxi) Based upon the audit procedures performed and 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 M S Jagannathan & Visvanathan

Chartered Accountants

Firm Regd. No. 001209S

(Sd/-)

M J Vrjayaraghavan Coimbatore

Partner

30.05.2013 M No 7534


Mar 31, 2012

1) We have audited the attached balance sheet of SRI RAMAKRISHNA MILLS (COIMBATORE) LIMITED as at 31st March, 2012 and 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.

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 the management. as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3) As required by the Companies (Auditors' Report) Order, 2003, and as amended by the Companies (Auditors' Report) Amendment order, 2004 issued by the Central Government of India 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.

4) Further to our comments in the Annexure referred to above, we report that;

a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of 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 dealt with by this report comply with 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, as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956 on that said date.;

5) 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 give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of Balance sheet, of the state of affairs of the company as at 31st March 2012.

b) In the case of Statement of Profit and Loss, of the Loss for the year ended on that date

c) In the case of the Cash Flow statement, of the cash flows for the year ended on that date

ANNEXURE REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE

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

b. The fixed assets have been physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year discrepancies noticed on such physical verification were not material and have been properly dealt with in books of accounts.

c. There were no sale of substantial part of fixed assets during the year and hence the going concern of the company is not affected.

ii) a. Physical verification of Inventory (excluding stocks with third parties) has been conducted at reasonable intervals by the Management. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

b. The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

iii) c. The company has maintained proper records of inventory and discrepancies noticed on physical verification of inventories as compared to book records were not material and have been appropriately dealt with. During the year, the company has neither granted nor taken any loans, secured or unsecured from or to parties covered in the register maintained under section 301 of the Companies Act, 1956 and hence sub clauses b, c & d of clause (iii) are not applicable.

iv) a. In our opinion and according to the explanation and information given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of the business for the purchase of inventory and fixed assets and for the sale of goods.

b. During the course of our Audit no major weakness has been noticed in the internal controls.

v) a. The transactions made in pursuance of contracts or arrangements, that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been recorded in the register maintained for the purpose

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Act, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time other than for conversion charges paid amounting to Rs. 1,93,28,907/- (Net) for which no comparable market prices were available and are considered to be of special nature as explained by the management of the Company.

vi) In our opinion and according to the information and explanations given to us the company has complied with the provisions of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules 1975 with regard to the deposits accepted from the public. No order has been passed by the National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vii) In our opinion and according to the information and explanations given to us, the internal audit was carried out by an external Chartered Accountant and is commensurate with the size of the company and the nature of its business.

viii) We have broadly reviewed the books of accounts maintained by the Company pursuant to the order made by the Central Government for the maintenance of cost records under section 209(1) (d) of the companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix) a According to the information and explanations given to us and records examined by us, the company subject to (b) stated below is regular in depositing undisputed statutory dues including Investor Education and Protection Fund, Income Tax, Value Added Tax, Wealth Tax, Service Tax and any other statutory dues with the appropriate authorities.

b. According to the information and explanation given to us, the undisputed arrears of statutory dues which were outstanding as at 31st March 2012 for a period of more than six months from the date they became payable are as follows: Name of the Amount Period to which the Statute (Rs.) amount relates

Income tax 57,63,387 A.Y 2010-2011

c. According to the information and explanations given to us, the statutory dues which have not been deposited on account of dispute are as follows:

Name of Nature of Amount Period to Forum where Statute Dues (Rs. In which the dispute is crore) amount pending relates

TNGST Addl. 7.43 A.Y.2004-05 Madras High Court Sales tax to 2006-07

TNGST Sales tax 54.59 A.Y. 1995-96 Madras High Court TNGST Sales tax 89.37 A.Y 1999-00 Madras High Court

TNGST* Sales Tax 61.66* A.Y.1998-99 Madras High Court

TNGST TNGST, AST 121.97 F.Y.2000-01 Madras High Court

Customs Customs duty on Cotton 8.26 F.Y.2003-04 Madras High Court

*(Rs. 31 lakhs, since paid)

x) The Company has accumulated loss of Rs. 3,54,78,715/- for the year ended 31st March 2012 and it has incurred cash loss for the above year. However, in the immediately preceding Financial Year, there was no cash loss.

xi) In our opinion and according to the information and explanation given to us the company has not defaulted in repayment of dues to any of the banks.

xii) During the year, the Company has not 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/society. Therefore, clause 4(xiii) of the Companies (Auditors' Report) order 2003 is not applicable to the Company.

xiv) In our opinion and according to the information and explanation given to us, the Company is not dealing or trading in shares, securities, debentures and other Investments.

xv) In our opinion and according to the information and explanation given to us, the company, during the year has not given any guarantee for loans taken by others from banks or financial institutions.

xvi) In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

xvii) According to the information and explanation given to us and on an overall examination of the Balance sheet of the company, we report that short term funds amounting to Rs. 2.94 crores have been used for long term application.

xviii) The Company has not made any preferential allotment of shares during the year to the parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

xix) The Company has not issued any debentures during the financial year and hence creation of security in respect thereof does not arise.

xx) The Company has not raised any money through a public issue during the year.

xxi) Based upon the audit procedures performed and 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 M. S. Jagannathan & Visvanathan Chartered Accountants Firm Regd. No. 001209S

(Sd.) M. J. Vijayaraghavan Partner M. No. 7534

Coimbatore 13.08.2012


Mar 31, 2011

1) We have audited the attached balance sheet of SRI RAMAKRISHNA MILLS [COIMBATORE] LIMITED as at 31st March, 2011 and also 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.

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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3) As required by the Companies [ Auditors Report] Order, 2003, and as amended by the Companies (Auditors Report) Amendment order, 2004 issued by the Central Government of India 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.

4) Further to our comments in the Annexure referred to above, we report that;

a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of 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, Profit and Loss account and cash flow statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow statement dealt with by this report comply with 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, as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956 on that said date.;

5) 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 give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of Balance sheet, of the state of affairs of the company as at 31st March 2011.

b) In the case of Profit and Loss account, of the Profit for the year ended on that date

c) In the case of the cash flow statement, of the cash flows for the year ended on that date

ANNEXURE REFERRED TO IN PARAGRAPH [3] OF OUR REPORT OF EVEN DATE

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

b The fixed assets have been physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year. Discrepancies noticed on such physical verification were not material and have been properly dealt with in books of accounts.

c There were no sale of substantial part of fixed assets during the year and hence the going concern of the company is not affected.

ii) a Physical verification of Inventory [excluding stocks with third parties] has been conducted at reasonable intervals by the Management. In respect of inventory lying with third parties. These have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

b The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c The company has maintained proper records of inventory and discrepancies noticed on physical verification of inventories as compared to book records were not material and have been appropriately dealt with.

iii) a During the year, the Company has not granted any loans, secured or unsecured to parties covered in the register maintained under section 301 of the Companies Act, 1956 and hence sub clauses b, c & d of clause (iii) are not applicable

b During the year, the company has taken unsecured loans in the nature of trade deposit amounting to Rs.2.00 Crore from one party covered in the register maintained under section 301 of the Act and the maximum amount outstanding as on the date is Rs.6.02 Crores.

c The rate of interest and other terms and conditions of the unsecured loans taken are not prima facie prejudicial to the interest of the company.

d There are no overdue principal and interest on loans taken from parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

iv) a In our opinion and according to the explanation and information given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of the business for the purchase of inventory and fixed assets and for the sale of goods.

b During the course of our Audit no major weakness has been noticed in the internal controls.

v) a The transactions made in pursuance of contracts or arrangements, that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been recorded in the register maintained for the purpose

b In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Act, have been made at prices which are reasonable having regard to the Prevailing Market prices at the relevant time other than for conversion charges paid amounting to Rs.4,05,54,795/- (Net) for which no comparable market prices were available and are considered to be of special nature as explained by the management of the Company.

vi) In our opinion and according to the information and explanations given to us the company has complied with the provisions of section 58A and 58AA of the Companies Act, 1956 and the Companies [Acceptance of Deposits] Rules 1975 with regard to the deposits accepted from the public. No order has been passed by the National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

vii) In our opinion and according to the information and explanations given to us, the internal audit was carried out by an external Chartered Accountant and is commensurate with the size of the company and the nature of its business.

viii) We have broadly reviewed the books of accounts maintained by the Company pursuant to the order made by the Central Government for the maintenance of cost records under section 209(1) (d) of the companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix) a. According to the information and explanation given to us and records examined by us, the company subject to (b) stated below is regular in depositing undisputed statutory dues including Investor Education and Protection Fund, Income Tax, Value Added Tax, Wealth Tax, Service Tax and any other statutory dues with the appropriate authorities.

b. According to the information and explanation given to us, the undisputed arrears of statutory dues which were outstanding as at 31st March 2011 for a period of more than Six months from the date they became payable are as follows:

Name of the Statute Amount Period to which the (Rs.) amount relates

Income tax 1,14,84,366 A.Y. 2010-2011

c. According to the information and explanations given to us, the statutory dues which have not been deposited on account of dispute are as follows:

x) The company does not have any accumulated losses as at 31st March 2011. The company has not incurred any cash losses during the financial year covered by

Name of Nature of Amount Period to Forum where the the dues (Rs. in which the dispute is statue lakhs) amount pending relates

TNGST Addl. Sales tax 7.43 A.Y.2004-05 Madras High Court to 2006-07

TNGST Sales tax 54.59 A.Y.1995-96 Madras High Court

TNGST Sales tax 89.37 A.Y.1999-00 Madras High Court

TNGST* Sales Tax 61.66* A.Y.1998-99 Madras High Court

TNGST TNGST, AST 121.97 F.Y.2000-01 Madras High Court

Customs Customs duty on Cotton 8.26 F.Y.2003-04 Madras High Court

*(Rs.31 lakhs, since paid)

our audit and in the immediately preceding financial year.

xi) In our opinion and according to the information and explanation given to us the company has not defaulted in repayment of dues to any of the banks.

xii) During the year, the Company has not 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/society. Therefore, clause 4(xiii) of the Companies (Auditors Report) order 2003 is not applicable to the Company.

xiv) In our opinion and according to the information and explanation given to us, the Company is not dealing or trading in Shares, Securities, debentures and other Investments.

xv) In our opinion and according to the information and explanation given to us, the company, during the year has not given any guarantee for loans taken by others from banks or financial institutions.

xvi) In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

xvii) According to the information and explanation given to us and on an overall examination of the Balance sheet of the company, we report that no funds raised on short time basis have been used for long-term investment.

xviii) The Company has not made any preferential allotment of shares during the year to the parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956.

xix) The Company has not issued any debentures during the financial year and hence creation of security in respect thereof does not arise.

xx) The Company has not raised any money through a public issue during the year.

xxi) Based upon the audit procedures performed and 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 M S Jagannathan & Visvanathan Chartered Accountants Firm Regd. No. 001209S (Sd.) M J Vijayaraaghavan Partner M No.7534

Coimbatore 30.05.2011


Mar 31, 2010

1. We have audited the attached balance sheet of SRI RAMAKRISHNA MILLS [COIMBATORE] LIMITED as at 31st March, 2010 and also 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.

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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies [Auditors Report] Order, 2003, and as amended by the Companies (Auditors Report) Amendment order, 2004 issued by the Central Government of India 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.

4. Further to our comments in the Annexure referred to above, we report that;

a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of 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, Profit and Loss account and cash flow statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Profit and Loss account and cash flow statement dealt with by this report comply with the Accounting Standards referred to in sub- section (3C) of section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the directors, as on 31st March, 2010 and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956 on that said date.;

5. 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 accepted in India:

a. In the case of Balance Sheet, of the state of affairs of the company as at 31st March 2010

b. In the case of Profit and Loss account, 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;

ANNEXURE REFERRED TO IN PARAGRAPH [3] OF OUR REPORT OF EVEN DATE

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

b) The fixed assets have been physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the period and discrepancies noticed on such physical verification were not material and have been properly dealt with in books of Accounts.

c) There were no disposal of substantial part of fixed assets during the period and hence the going concern status of the Company is not affected.

ii) a) Physical verification of Inventory [excluding stocks with third parties] has been conducted at reasonable intervals by the Management. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c) The company has maintained proper records of inventory and discrepancies noticed on physical verification of inventories as compared to book records were not material and have been appropriately dealt with.

iii) The company has neither granted nor taken any loans, secured or unsecured to firms, Companies or other parties covered in the register maintained under section 301 and hence sub clauses b, c & d of clause (iii) are not applicable.

iv) a) In our opinion and according to the explanation and information given to us there is adequate internal control system commensurate with the size of the Company and the nature of the business for the purchase of inventory and fixed assets and for the sale of goods.

b) During the course of our Audit no major weakness has been noticed in the internal controls.

v) a) The transactions made in pursuance of contracts or arrangements, that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been recorded in the register maintained for the purpose.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Act, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time other than for conversion charges amounting to Rs.4,49,61,104/- (Net) for which no comparable market prices were available and are considered to be of special nature as explained by the management of the Company.

vi) The Company during the period has not accepted any deposit from the public and hence provisions of section 58A of the Companies Act, 1956 and the companies (Acceptance of Deposits) Rules 1975 are not applicable.

vii) On the basis of Internal audit reports broadly reviewed by us, we are of the opinion that, the coverage of Internal Audit functions carried by a Chartered Accountant appointed by the Management is commensurate with the size of the Company and the nature of its business.

viii) We have broadly reviewed the books of accounts maintained by the Company pursuant to the order made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix) a) According to the information and explanations given to us and records examined by us , the company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income- tax, Wealth tax, Service tax and any other statutory dues with the appropriate authorities.

b) According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding 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 statutory dues which have not been deposited on account of dispute are as follows:



Name Amount Period to

Nature of Forum where

of the Rs. in which the the Dues dispute is pending

Statute lakhs) amount relates

TNGST Addl. Sales tax 7.43 A.Y.2004-05 Madras High Court

to 2006-07

TNGST Sales tax 54.59 A.Y.1995-96 Madras High Court

TNGST Sales tax 89.37 A.Y.1999-00 Madras High Court

TNGST Sales Tax 61.66 * A.Y.1998-99 Madras High Court

TNGST TNGST, AST 121.97 A.Y.2000-01 Madras High Court Customs Customs duty

on Cotton 8.26 A.Y.2003-04 Madras High Court

-(Rs.31 lakhs, since paid)



x) The Company has accumulated losses of Rs. 1.02 crores as at 31st March 2010 . The Company has not incurred cash losses during the year covered by our audit but has incurred cash losses in the immediately preceding financial year.

xi) According to the information and explanation given to us and on the basis of records examined by us, the Company has during the period not defaulted in repayment of loans to Bank.

xii) During the period, the Company has not 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, clause 4 (xiii) of the Companies (Auditors Report) order, 2003 is not applicable to the Company.

xiv) In our opinion and according to the information and explanation given to us, the Company is not dealing or trading in Shares, Securities, debentures and other Investments.

xv) In our opinion and according to the information and explanation given to us, the company, during the period has not given any guarantee for loans taken by others from banks or financial Institutions.

xvi) In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

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 the funds raised on short term basis amounting Rs. 491.92 lakhs have been used for long-term investment.

x v iii) The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

xix) The company has not issued any debentures during the period and hence creation of security in respect of debentures does not arise.

xx) The company has not raised any money through a public issue during the period.

xxi) Based upon the audit procedures performed and 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 M S Jagannathan & Visvanathan

Chartered Accountants

Firm Regd. No. 001209S

(Sd.) M J Vijayaraghavan

Partner

M No.7534

Coimbatore 28.06.2010

 
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