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Auditor Report of Tamil Nadu Jaibharat Mills Ltd.

Mar 31, 2016

To

The Members of Tamilnadu Jai Bharath Mills Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Tamilnadu Jai Bharath Mills Limited, which comprise the Balance Sheet as at March 31, 2016 and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 with respect to 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 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 of 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.

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 financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2016;

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 issued by the Central Government of India in terms of sub-section (11) of section 143 of The Companies Act 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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 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 it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

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 aforesaid financial statements comply with Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 except Accounting Standard 15 as detailed in Note No.7.

e) On the basis of written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164(2) of the Act.

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 the impact of pending litigations on its financial position in its financial statements-Refer to Note 8 to the financial statements

ii) the company does not have any long-term contracts including derivative contracts, requiring a provision for material foreseeable losses.

iii) the company does not have any amounts required to be transferred to the Investor Education and Protection Fund.

ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF TAMILNADU JAI

BHARATH MILLS LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013

We have audited the Internal Financial Controls over financial reporting of Tamilnadu Jai Bharath Mills Limited as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that

1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company.

2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Annexure referred to in paragraph 1 of our Report of even date to the members of Tamilnadu Jai Bharath Mills Limited on the accounts of the Company for the year ended 31st March 2016

In terms of Companies (Auditor’s Report) Order 2016, issued by Central Government of India, in terms of Section 143(11) of The Companies Act, 2013, we further report, on the matters specified in paragraph 3 and 4 of the said Order, that: -

1. FIXED ASSETS

i) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets, i i)As explained to us, all fixed assets have been physically verified by the management at reasonable intervals during the year which, in our opinion, is reasonable having regard to the size of the company and nature of its assets. No material discrepancy was noticed on such physical verification.

iii) According to the information and explanations given to us and on the basis of our examination of the records of the company, the title deeds of immovable properties are held in the name of the company.

2. INVENTORIES

The management has conducted physical verification of its inventories at reasonable intervals during the year. No material discrepancies were noticed during such verification.

3. LOANS TO PARTIES LISTED U/S 189 OF THE ACT

The Company has not granted any loans, secured or unsecured, to parties covered in register maintained under Section 189 of The Companies Act, 2013.

4. COM PLIANCE WITH SECTIONS 185 & 186 OF THE ACT

i) In connection with matters specified u/s 185 of the act, the Company has not advanced any loans, directly or indirectly, to any of its directors or to any other person in whom the directors are interested, or has given any guarantee or provided security in connection with any loan taken by any other person.

ii) The company has not made any investments in any other companies within the meaning of section 186(1) of the act.

iii) In connection with matters specified under section 186(2) of the act, the company has not advanced any loans, directly or indirectly, to any person or body corporate, or has given any guarantee or provided security in connection with any loan taken by any other body corporate or any other person or acquired any securities of companies in excess of limits stipulated

5. The Company has not accepted any deposits from the public.

6. We have broadly reviewed the accounts and records of the company in this connection and we are of the opinion that, prima facie, the prescribed accounts and records have been generally made and maintained. We have not, however, made a detailed examination of the same.

7. STATUTORY DUES

According to the records maintained by the company and the information and explanations given to us, the company has been generally regular i n depositing undisputed statutory dues including provident fund, income tax, sales tax, value added tax, duty of customs, service tax, cess.

i) According to the records maintained by the company and the information and explanations given to us, there were no arrears of undisputed statutory dues, in respect of provident fund, income-tax, sales tax, value added tax, duty of customs, service tax, cess which remained outstanding as at 31st March 2016, for a period of more than six months from the date they became payable.

ii) According to the records of the company and the information and explanations given to us, the disputed statutory dues, pertaining to earlier years aggregating to Rs. 244.23 lakhs on account of matters pending before appropriate authorities is as under and for which no provision had been made in the accounts.

Nature of Due

Forum where pending

Period of dispute

Rs. In lakhs

Sales Tax

STAT-Madurai

1998-1999

1.45

Sales Tax

STAT-Madurai

1999-2000

1.63

Sales Tax

ACCT-Chennai

2003-2004

12.86

Central Sales Tax

Commissioner-Vnr

2007-2008

20.57

Central Sales Tax

Commissioner-Vnr

2008-2009

12.30

Central Sales Tax

Commissioner-Vnr

2009-2010

8.98

Central Sales Tax

Commissioner-Vnr

2011-2012

21.85

Central Sales Tax

Commissioner-Vnr

2012-2013

6.68

Provident Fund

High Court, Madurai

Apr 09- Dec 09

56.48*

Provident Fund

Appellate Tribunal, Delhi

Jan 10-Jun11

99.07 *

E.S.I.

High Court, Madurai

Nov 06-Mar 07

2.36

Total

244.23

* Out of a total sum of Rs. 155.55 lakhs, Rs. 66.48 lakhs has been deposited with PF authorities under protest.

8. The Company has not defaulted in the repayment of any dues to a financial institution, bank or govern mentor debenture holders.

9. Term loans were utilized for the purposes for which they were obtained.

10. Based upon the audit procedures performed and information and explanations given to us by the management, no fraud by the company or on the Company by its officers or employees have been noticed or reported during the course of our audit.

11. According to the information and explanations given to us and based on our examination of the records of the company, the company has not paid / provided for any managerial remuneration.

12. The provisions of section 406(1) of the act do not apply to the company.

13. The transactions entered into with related parties are in compliance with requirements of sections 177 & 188 of the act and the details have been disclosed in the financial statements etc., as required by the applicable accounting standards.

14. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

15. The Company has not entered into any non-cash transactions with directors or persons connected with directors, during the year.

16. The Company is not required to be registered under section 45-IAofthe Reserve Bank of India Act, 1934

For KRISHNAN&RAMAN,

Place. Rajapalayam Chartered Accountants

Date: 26.05.2016 FRN-01515S

V.SRIKRISHNAN,

M.No.206115


Mar 31, 2015

We have audited the accompanying financial statements of TAMILNADU JAI BHARATH MILLS LIMITED ("the company"),which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss, 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 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 the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give 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 operating effectiveness of such controls .An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by 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, except in relation to provision for Depreciation on fixed assets as laid down by Schedule II of the Companies Act 2013. Subject to the above the aforesaid financial statements 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 March2015, its loss and its 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, 2015("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters Specified in paragraphs 3 and 4 of the 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 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, except Accounting Standard 15asdetailed in Note No.7

e) On the basis of 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 ason31 March, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

f) In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements Refer Note 8 to the financial statements;

ii. The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE REFERRED TO IN PARAGRAPH 6(1) OF OUR REPORT OF EVEN DATE TO THE

SHAREHOLDERS OF TAMILNADU JAIBHARATH MILLS LIMITED

On the basis of such checks as we considered appropriate and according to the information and Explanations given to us during the course of our audit, we report that:

(i) In respect of its fixed assets:

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

(b) As explained to us, fixed assets have been physically verified by the management during the year in accordance with the phased programme of verification adopted by the management which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(ii) In respect of its inventory:

a) As explained to us, the inventories of finished goods, semi-finished goods, stores, spare parts and raw materials were physically verified at regular intervals/(at the end of the year) by the Management. In case of inventories lying with third parties, certificates of stocks holding have been received.

b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion 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 of stocks as compared to book records.

(iii) According to the information and explanations given to us, the Company has not granted any loans to companies, firms or other parties, covered in the Register maintained under Section 189 of the Companies Act, 2013, during the year. The amounts outstanding from such entities listed in note 12 are balances carried forward from previous year.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods (and/services). During the course of our Audit, we have not observed any continuing failure to correct major weaknesses in internal control.

(v) The company has not received any public deposits during the year.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Rules made by the Central Government under Section 148(1) of the Companies Act, 2013 and are of the opinion that prima facie the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of these records with a view to determining whether they are accurate or complete.

(vii) In respect of statutory dues:

(a) According to the records of the company and information and explanations given to us, the Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, employees state insurance (ESI), Investor Education and Protection Fund, Income-tax, Tax deducted at sources, Tax collected at source, Professional Tax, Sales Tax, value added tax (VAT), Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it, with the appropriate authorities.

(b) According to the information and explanations given to us,there were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty, sales tax, VAT, Cess and other material statutory dues in arrears, outstanding as at 31 March, 2015 for a period of more than six months from the date they became payable.

(c) There were no amounts which required to be transferred by the Company to the Investor Education and Protection Fund during the year.

(viii) The accumulated losses of the company are more than 50% of its Net Worth. The company has not incurred Cash loss during the financial covered by our Audit and also in the immediately preceding financial year.

In arriving at the accumulated losses and net worth as above , we have considered the quantifications which are quantifiable in the audit reports of the years to which these losses pertain.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to Banks.

(x) The company has not given guarantees in connection with loans taken by a company, under the same management, from banks.

(xi) The company has not obtained any term loan during the year.

(xii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For KRISHNAN&RAMAN, Chartered Accountants FRN-01515S

Place: Aruppukottai Date: 27/05/2015 V.SRIKRISHNAN, M.No.206115


Mar 31, 2014

We have audited the accompanying financial statements of Tamilnadu Jai Bharath Mills Limited ("the Company"), which comprise the Balance Sheet as at March 31,2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 "the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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 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.

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

Qualified Opinion:

In our opinion and to the best of our Information and according to the explanations given to us, subject to Note I.7 regarding Non compliance of AS15(revised), the financial statements give the information required by the Act In the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2014.

b) in the case of the Statement of Profit and Loss Account, of the loss for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from branches not visited by us;

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 and with the returns received from branches not visited by us;

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards , referred to in Sub-Section (3C) of Section 211 of the Companies Act, 1956, 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 1956.

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

(i) In respect of its Fixed Assets:

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

(b) As explained to us, all the fixed assets have been physically verified by the management at reasonable intervals during the year which in our opinion is reasonable having regard to the size of the company and nature of its assets. No material discrepancy was noticed on such physical verification.

(c) In our opinion, the company has not disposed off substantial part of fixed asset during the year and the going concern status of the company is not affected.

(ii) In respect of Inventories :

(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) The company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

(iii) (a) As the company has not granted any loan, secured or unsecured to companies, firms, or other parties listed in the register maintained under Section 301 of the act, the question of reporting on rate of interest, other terms and conditions, regularity of the repayment of loans granted does not arise.

(b) The company has taken unsecured loans from Companies, firms or other parties covered in the register maintained under Sec. 301 of the Act. The number of parties from whom loan obtained are 5. The amount outstanding as at 31.3.2014, is Rs. 26,45,51,643/- in aggregate. The maximum amount outstanding is Rs. 34,32,23,073/- The rate of interest and other terms and conditions unsecured loans taken by the company are not prima facie prejudicial to the interest of the company. The principal amount is payable on demand and interest as stipulated.

(iv) In our opinion and according to information and explanations given to us, the internal control procedures designed by the company is commensurate with the size of the company and nature of its business.

(v) (a) According to the information and explanation given to us and declarations furnished by the directors taken on record by the Board under 299(3) (a) of the Companies Act 1956, transactions that required to be maintained in a register in pursuance of section 301 of the Act have been so maintained. Each of these transactions have been made at prices which are reasonable having regard to the prevailing market rate at the relevant time.

(b) 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 companies act, that needs to be entered into the register maintained under section 301 have been so entered.

(vi) During the year, the Company has an unsecured loan of Rs.20,90,250/- from a shareholder and to that extent violated the provisions of Section 58A of the Act. The company is advised to refund the deposit to the shareholder early.

(vii) The company has got an internal audit system commensurate with the size and nature of the business of the company.

(viii) The Central Government has prescribed the maintenance of Cost Records under Sec. 209(1)(d) of the Companies Act, 1956, in respect of business relating to electricity generated from windmill owned by the company. We have broadly reviewed the accounts and records of the company in this connection and we are of the opinion that prima facie , the prescribed accounts and records have been generally made and maintained . We have not however made a detailed examination of the same.

(ix) (i) According to the records of the company and information and explanations given to us, the company has been regular in depositing with the appropriate authorities undisputed Statutory dues including Provident fund, Investor Education and Protection fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs duty, cess and other statutory dues with the appropriate authorities.

(ii) According to the records of the company and the information and explanations given to us, there were n arrears of outstanding statutory dues which have remained outstanding at at 31.3.2014 for a period of more than six months from the date they became payable.

(iii) According to the records of the company and the information and explanations given to us, the disputed statutory dues pertaining to earlier years aggregating to Rs.173.87 lakhs that have not been deposited on account of matters pending before appropriate authorities are as under and for which no provision had been made in the accounts:

Name of the Statute Relating to Forum where Amount F.Y.ended dispute is (Rs.in lakhs) pending

1. Sales Tax 31.3.1999 STAT-Madurai 1.45 31.3.2000 STAT-Madurai 1.64 31.3.2004 ACCT-Chennai 12.87

2. Provident Fund April 09 to High Court, 56.48 * Dec 09 Madurai

Jan2010 to PF, Appellate Jun 11 Tribunal New Delhi 99.07 *

3. E.S.I. Nov 06 to High Court, 2.36 Mar 07 Madurai * Rs.1694639 and Rs.4953543 already deposited with PF Authority.

(x) The accumulated losses of the company at the end of the year is 31.48 Crores and the Company has not incurred any cash loss during the current financial year covered by our audit and also in the preceeding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders pertaining to the year under audit.

(xii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The company is a not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of Clause 4 (xiii) of the Companies (Auditors'' report) Rules, 2003, are not applicable.

(xiv) In our opinion and according to the information and explanations given to us , the company does not deal/trade in shares, securities,, debentures and other instruments.

(xv) According to the information given to us the Company has not given any guarantee for loans by others from bank or financial institutions.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, term loans were applied for the purpose for which the loans were borrowed.

(xvii) According to the information and explanations given to us and on overall examination of the Balance Sheet we are of the opinion that funds raised on short term basis have prima facie not been used for long term investment.

(xviii) According to the information and explanations given to us, during the year, the company has made preferential allotment of fully paid up equity shares to the tune of Rs.16.20 Crores, to the parties covered in the register maintained under Sec. 301 of the Companies Act, 1956 in accordance with the guidelines issued by the Companies Act 1956.

(xix) According to the information and explanations given to us and the records examined by us securities /charges have been created in respect of the debentures issued. However there are no outstanding on the end of the reporting period.

(xx) During the period covered by our audit, the company has not raised any money by public issue.

(xxi) According to the information and explanations given to us no fraud on/ by the Company has been noticed or reported during the year that causes the financial statements to be materially misstated.

For KRISHNAN&RAMAN, Chartered Accountants Place : Chennai FRN-01515S Date : 30th May 2014 K.V.RAMAN Partner 24 M.No.009790


Mar 31, 2012

We have audited the attached Balance Sheet of Tamilnadu Jai Bharath Mills Limited, Aruppukottai as at 31st March 2012, and also the statement of Profit and 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.

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 statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor's Report) Order, 2003 and as amended by companies (Auditors Report 2004) issued by the 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.

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 purpose of our audit.

(ii) In our opinion, proper books of accounts as required by law have been kept by the company so far as appears from our examination of those books subject to Notes 1-7 regarding Non-compliance ofAS15(revised).

(iii) The Company's Balance Sheet and the Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

(iv) In our opinion, the Balance sheet and Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub section (3c) of section 211 of the Companies Act 1956 subject to Note 1-7 regarding Non- compliance ofAS15 (revised)

(v) On the basis of written representations received from the Directors, as on 31 st 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.

(vi) In our opinion and to the best of our information and according to the explanations given to us the said Accounts read together with the significant accounting policies and other notes thereon subject to Note 1-7 regarding Non-compliance of AS15 (revised) in respect of gratuity (amount not ascertained) and of Note No. 11-11 (the networth has been eroded) 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 Balance Sheet of the state of affairs of the Company as at 31 st March 2012 and

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.

ANNEXURES TO AUDITOR'S REPORT REFERRED TO IN PARAGRAPH 1 OF OUR REPORT

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

b) As explained to us, all the fixed assets have been verified by the management at reasonable intervals during the year which in our opinion is reasonable having regard to the size of the company and nature of its assets. No Material discrepancies have been noticed on such verification.

c) In our opinion, the company has not disposed off substantial part of fixed assets during the year and the going concern status of the company is not affected.

II. a) The inventories have been physically verified by the management at regular intervals during the year. In our opinion, the frequency of verification is reasonable.

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, commensurate with the size of the company and nature of its business.

c) The company has maintained proper record of inventories. As explained to us, the discrepancies noticed on physical verification between physical stocks and books records were not material.

III. The company has not granted any secured or unsecured loan to companies, firms or other parties covered in the register maintained under section 301 of the Act. The company has taken unsecured loans from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act. The number of parties from whom loan obtained are 4. The amount outstanding as at 31.03.2012 is Rs.24,98,23,193/= in aggregate. The maximum amount outstanding isRs.24,98,23,193/. The rate of interest and other terms and conditions of unsecured loans taken by the company are not prima facie prejudicial to the interest of the company and the principal amount is payable on demand and interest as stipulated.

IV. The company has an internal control system which is, in general, commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness in internal controls.

V. Based on the information and explanations given to us, and declarations furnished by the directors and taken on record by the Board under section 299(3)(a) of the Companies Act 1956, transactions that required to be maintained into a register in pursuance of section 301 of the Act have been so maintained. Each of these transactions have been made at prices which are reasonable having regard to the prevailing market rate at the relevant time.

VI. The company has complied with the provisions of sections 58A and 58AA or any other relevant provisions of the Act and the rules framed there under wherever applicable with regard to the deposits accepted from the public subject to the fact that unclaimed deposits amounting to Rs.4,20,660/= are in excess of the prescribed limit due to the erosion of networth.

VII. The company has an internal audit system commensurate with its size and nature of its business.

VIII. As regards cost records u/s.209(1 )(d) of the Companies Act, 1956, we are of the opinion that prima facie prescribed records have been maintained. We have however not made detailed examination of the records to determine whether they are accurate or complete.

IX. According to the records of the Company the Company has been regular in depositing undisputed statutory dues (to the extent applicable) including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, TN VAT, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities.

According to the records of the Company there were no arrears of outstanding statutory dues which have remained outstanding as at 31.03.2012 for a period of more than six months from the date they became payable.

The disputed dues that have not been deposited on account of matters pending before the respective authorities are as under.

Relating The Authority before Nature of Disputed to the whom the dispute Statutory Due Amount (Rs) Financial Spending Year Ended

Sales Tax 144771 31.03.1999 STAT-Madurai

163198 31.03.2000 STAT - Madurai

1286570 31.03.2004 ACCT, Chennai

Provident Fund * 56,48,795 April 09 to Dec 09 P.F Commissioner, Tirunelveli

E.S.I 2,36,550 Nov-06 to Mar 07 E.S.I.Labour Court, Tirunelveli

* Rs. 16,94,639/= already deposited with PF authority.

X. The company has accumulated losses amounting to Rs. 27.52 Crores as at 31.03.2012 which exceeded 50 % of the Networth of the company and networth has been eroded. The company has incurred cash loss during the financial year Covered by our Audit Report and no cash loss incurred in the immediately preceding financial year.

XI. On the basis of examination of books of account carried out by us and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institution or bank.

XII. In our opinion and according to the information and explanations given to us, the company has not granted any loan or advance on the basis of security by way of pledge of shares, debentures and other security.

XIII. The company is not a chit or nidhi or mutual benefit company or society and therefore the provisions of special statutes applicable to those companies or societies do not apply to this company.

XIV. The company is not dealing in or trading in shares, securities, debentures and other investments and as such clause 4(xiv) of the Company (Auditor's Report Order) 2004 is not applicable to this Company.

XV. As explained, the company has not given any guarantees for loans taken by others from bank or financial institutions and Paragraph 4 (xv) of the Order is not applicable.

XVI. To the best of our knowledge and according to the information and explanations given to us, term loans availed by the company were applied for the purposes for which the loans were obtained.

XVII. According to information and explanations given to us and on an overall examination of the balance sheet of the company, funds raised on short term basis have prima-facie not been used for long term investment.

XVIII During the year, the company has not made any preferential allotment of shares.

XIX During the year on 04.08.2011 the company has issued 12.5% fully convertible unsecured debentures for Rs..10.00 crores to Shri Ramalinga Mills Ltd., Aruppukottai (an Associate Company) on a Preferential Basis and that the said debentures were issued as part conversion out of the outstanding unsecured loan advanced by them for a tenure of 18 months at the end of which they will be converted into Equity Shares of the company.

XX The Company has not raised any money by way of public issue during the year. Hence the end use of money does not arise.

XXI According to the information and explanations given to us, and as per report of the Audit Committee there has been no fraud on/by the company noticed/reported during the year.

For Krishnan & Raman, For K. Subramanian & Co.,

Chartered Accountants Chartered Accountants

K. V. Raman.Partner. R.Ramamoorthy, Partner.

Membership No.9790 Membership No.21836

Place : Chennai

Date : 25th May, 2012.


Mar 31, 2010

We have audited the attached Balance Sheet of Tamilnadu Jai Bharath Mills Limited, Aruppukottai as at 31 st March 2010, and also the Profit and Loss Account and the cash flow statement for the year ended on that date annexed thereto. 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.

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 statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 2003 and as amended by companies (Auditors Report 2004) issued by the 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.

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 purpose of our audit.

(ii) In our opinion, proper books of accounts as required by law have been kept by the company so far as appears from our examination of those books subject to Notes I-7 regarding Non-compliance of AS15(revised).

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

(iv) In our opinion, the Balance sheet and 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 subject to Note I-7 regarding Non- compliance of AS15 (revised)

(v) 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 is 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.

(vi) In our opinion and to the best of our information and according to the explanations given to us the said Accounts read together with the significant accounting policies and other notes thereon subject to Note I-7 regarding Non-compliance of AS15 (revised) in respect of gratuity that the provision for gratuity is lower by Rs.67,73,149/= and the non-disclosure of particulars in respect of AS-15(Revised) as a result of which the profit is higher by Rs.67,73,149/- which consequent impact to the same extent on provision of gratuity 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 Balance Sheet of the state of affairs of the Company as at 31st March 2010 and

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.

ANNEXURES TO AUDITORS REPORT REFERRED TO IN PARAGRAPH 1 OF OUR REPORT

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

b) As explained to us, all the fixed assets have been verified by the management at reasonable intervals during the year which in our opinion is reasonable having regard to the size of the company and nature of Its assets. No Material discrepancies have been noticed on such verification.

c) In our opinion, the company has not disposed off substantial part of fixed assets during the year and the going concern status of the company is not affected.

II. a) The inventories have been physically verified by the management at regular intervals during the year. In our opinion, the frequency of verification is reasonable.

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, commensurate With the size of the company and nature of its business.

c) The company has maintained proper record of inventories. As explained to us, the discrepancies noticed on physical verification between physical stocks and books records were not material.

III. The company has not granted any secured or unsecured loan to companies, firms or other parties covered in the register maintained under section 301 of the Act. The company has taken unsecured loans from companies , firms or other parties covered in the register maintained under section 301 of the Companies Act. The number of parties from whom loan obtained are 4. The amount outstanding as at 31.03.2010 Rs.20,97,37,083/= in aggregate. The maximum amount outstanding is Rs.20,97,37,083/- The rate of interest and other terms and conditions of unsecured loans taken by the company are not prima facie prejudicial to the interest of the company and the principal amount is payable on demand and interest as stipulated.

IV. The company has an internal control system which is, in general, commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness in internal controls.

V. Based on the information and explanations given to us, and declarations furnished by the directors and taken on record by the Board under section 299(3)(a) of the Companies Act 1956, transactions that required to be maintained into a register in pursuance of section 301 of the Act have been so maintained. Each of these transactions have been made at prices which are reasonable having regard to the prevailing market rate at the relevant time.

VI. The company has complied with the provisions of sections 58A and 58AA or any other relevant provisions of the Act and the rules framed there under wherever applicable have been complied with regard to the deposits accepted from the public. No order in this regard has been passed by company Law Board or National company law tribunal or Reserve Bank of India or any court or any other tribunal subject to the remarks that the percentage that the deposits held by the company exceeded the norms prescribed by Companies Act, 1956.

VII. The company has an internal audit system commensurate with its size and nature of its business.

VIII. As regards cost records u/s.209(1)(d) of the Companies Act, 1956, we are of the opinion that prima facie prescribed records have been maintained. We have however not made detailed examination of the records to determine whether they are accurate or complete.

IX. According to the records of the Company the company has been regular in depositing undisputed statutory dues (to the extent applicable) including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, TN VAT, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities.

According to the records of the Company there were no arrears of outstanding statutory dues which have remained outstanding as at 31.03.2010 for a period of more than six months from the date they became payable.

The disputed dues that have not been deposited on account of matters pending before the respective authorities are as under.

Nature of Disputed Relating T he Authority before Statutory Due Amount (Rs) to the whom the dispute Financial Year Ended is pending

1 Income-Tax 25,68,895 31.03.2001 ITAT, Chennai

2 Sales Tax 144771 31.03.1999 STAT - Madurai

163198 31.03.2000 STAT - Madurai

221683 31.03.2001 CTO, Aruppukottai

1286570 31.03.2004 ACCT, Chennai

X. The company has accumulated losses amounting to Rs.11.96 Crores as at 31.03.2010 which exceeds 50 % of the Net worth of the company. The company has not incurred cash loss during the financial year Covered by our Audit Report and cash loss in the immediately financial year.

XI. On the basis of examination of books of account carried out by us and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institution or bank. The company is not having any debenture holder.

XII. In our opinion and according to the information and explanations given to us, the company has not granted any loan or advance on the basis of security by way of pledge of shares, debentures and other security.

XIII. The company is not a chit or nidhi or mutual benefit company or society and therefore the provisions of special statutes applicable to those companies or societies do not apply to this company.

XIV. The company is not dealing in or trading in shares, securities, debentures and other investments and as such clause 4(xiv) of the Company (Auditors Report Order) 2004 is not applicable to this Company.

XV. As explained, the company has not given any guarantees for loans taken by others from bank or financial institutions and Paragraph 4 (xv) of the Order is not applicable.

XVI. To the best of our knowledge and according to the information and explanations given to us, term loans availed by the company were applied for the purposes for which the loans were obtained.

XVII. According to information and explanations given to us and on an overall examination of the balance sheet of the company, funds raised on short term basis have prima-facie not been used for long term investment.

XVIII. During the year, the company has not made any preferential allotment of shares.

XIX. As the Company has not issued any debentures, Paragraph 4(xix) of the Order is not applicable.

XX. The Company has not raised any money by way of public issue during the year. Hence the end use of money does not arise.

XXI. According to the information and explanations given to us, and as per report of the Audit Committee there has been no fraud on/by the company noticed/reported during the year.

For Krishnan & Raman, For K. Subramanian & Co.,

Chartered Accountants Chartered Accountants

K. V. Raman,Partner. R. Ramamoorthy , Partner.

Membership No.9790 Membership No.21836

Chennai

Date : 24.05.2010

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