Mar 31, 2014
We have audited the accompanying financial statements of M/s Sterling
Spinners Ltd., Chennai ("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 principles generally accepted in India including
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956 ("the Act"), This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that give
a true and fair view and are free from material misstatement, whether
due to fraud or error.
Auditors Responsibility:
Our responsibility is to express an opinion on these financial
statements based on our audit. We Conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements, the procedures
selected depend on the auditor''s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. 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
Subject to the following comments:
BIFR SCHEDULE:
The Company has been declared sick by BIFR on 6.5.2003. Pending
Proceedings before BIFR action has been initiated under SARFAESI Act,
2002 by TIIC. BIFR has abated the proceedings, since SARFAESI action
has been taken. Appeal against the Abatement Order also been dismissed
by AAIFR. SARFAESI action has been challenged and when it is pending,
settlement has been made to TIIC. There is no liability either with
Secured or Unsecured Creditors.
GOING CONCERN BASIS:
The Company has stopped its operations since October, 2007 and whole of
the Plant and Machineries has been disposed off leaving only Land and
Building. In spite of all the above, accounts has been prepared on a
going concern basis.
UN-SECURED LOANS FROM RELATED PARTIES:
In order to settle the dues to Banks and other Creditors, the Company
has taken Unsecured Loans from its Managing Director and one of Its
related Company. The Company has paid an amount of Rs.241.02 lakhs
towards interest on the above loans.
SUBJECT TO ABOVE COMMENTS:
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 31,2014;
(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, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227 (3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(b) In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books.
(c) the Balance Sheet, Statement of Profit and Loss, and Cash. Flow
Statement dealt with by this Report are in agreement With the books of
account.
(d) in our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in subsection (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, 2013;
(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
Referred to in Paragraph 1 of our Report of even date to the
Members of M/s Sterling Spinners Ltd, (the Company) on the Financial
Statement for the Year ended March 31, 2014.
(i) In respect of Fixed Assets :
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of Fixed Assets.
(b) All the Fixed Assets were physically verified by the Management
during the year and there is a regular programme of verification,
which, in our opinion, is reasonable haying regard to size of the
Company and the nature of its assets. No material discrepancies were
noticed during verification.
(c) During the year the Company has not disposed off any Fixed Assets
(ii) In respect of its Inventory :
The Company has stopped production at the mill. There is no inventory,
Therefore the provisions of Clause 4 (ii) of the order are not
applicable to the Company.
(iii) (a) As informed the Company has not granted any loans, Secured or
unsecured to Companies, firms or other parties covered in the Register
maintained under Section 301 of the Companies ACt. 1956.
(b) 1. The Company has taken Un-Secured loans from two parties covered
in the Register maintained under Section 301 of the Companies Act,
1956. The maximum Amount involved during the year for those loans was
Rs. 1760.94 lakhs. The year end balance of those loans was Rs. 1760.94
Lakhs.
2, The rate of Interest and all other Terms and Conditions for the
loans taken are not prima facie, prejudicial to the interest of the
Company, they are regular in payment of interest, wherever applicable.
3. The terms of arrangement do no stipulate any principal
repayment schedule and is repayable on demand.
4. There is no overdue amount of Loan taken from the party covered
in the Register maintained under Section 301 of the Companies Act,
1956.
(iv) In our opinion, and according to the information and explanations
given to us, there is an adequate internal control and procedures
commensurate with the size of the Company and the nature of its
business, with regard to purchase of inventory, fixed assets and with
regard to the sale of goods. During the course of our audit, we have
not observed any continuing failure to correct major weakness in the
internal control system of the Company.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in Section 301 of the Companies Act, 1956have been entered
into the register required to be maintained under that Section.
(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 Companies Act, 1956, have been made at prices that are reasonable
having regard to the prevailing market prices at the relevant time.
(vi) In our opinion, and according to the information and explanations
given to us, the Company has not accepted any deposits from the Public
and consequently the provisions of Sections 58A and 58AA or any other
relevant provisions of the Companies Act, 1956 and the rules framed
there under are: not applicable.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and the nature of its business.
(viii) Since the Company has stopped operations in the plant, reporting
under Clause 4 (viii) of the Companies'' (Auditor''s Report) Order, 2003
does not arise.
(ix) (a) According to the information and explanations given to us,the
Company is regular In depositing with appropriate authorities
undisputed statutory dues including Provident Fund, Investor education
protection fund, Emloyees State Insurance, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other
material statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth
Tax, Service Tax, Excise Duty and Cess were in arrears, as at 31st
March, 2014 for a period of more than six months from the
date they became payable.
(c) Income Tax, Sales Tax, Wealth Tax, Service Tax, Excise Duty and
Cess which have not been deposited on account of any dispute
(x) In our opinion, accumulated losses have exceeded its net worth at
the end of financial year. The company has incurred cash losses in this
financial year, but incurred cash Profit in the immediate preceding
financial year.
(xi) According to the information and explanations given to us, the
Company has no loans due to bank and Financial Institutions.
(xii) In our opinion and according to information and explanations
given to us, no loans and advances have been granted by the Company 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 / Nidhi / Mutual
Benefit Fund / Society, therefore, the provisions of Clause 4 (xiii) of
the Companies (Auditors Reprot) Order, 2003 are not applicable to the
Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, Securities, debentures and other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order,
2003 are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by M/s Savorit Limited from
Banks. According to the information and explanations given to us, we
are of the opinion that the Terms and Conditions thereof are not
primafacie prejudicial to the interest of the Company.
(xvi) The Term Loans raised by the Company, was applied for the purpose
of loans 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 no funds raised on short-term basis have been used for long-term
investment.
(xviii) According to the information and explanation given to us, the
Company has not made preferential allotment of shares to parties and
companies covered In the register maintalned under Section 301 of the
Companies Act, 1956
(xix) According to the information and explanations given to us, during
the period covered by our audit report, the Company has not issued any
debentures.
(xx) The Company has not raised any money by public issues during the
year.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit
PLACE: CHENNAI For D.SAMPATH KUMAR & CO.,
DATE : 30.05.2014 CHARTERED ACCOUNTANTS
(FRN. 003556S)
M.K.RAVINDRAN
(PARTNER)
Membership No: 20887
Mar 31, 2012
1. We have audited the accompanying financial statements of M/s
Sterling Spinners Ltd, Chennai which comprise the Balance Sheet as at
31st March, 2012, the statement of Profit and Loss and the Cash Flow
Statement for the Year ended and a summary of the significant
accounting policies and other explanatory information.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statements
presentation. We believe that Our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 (as
amended) ("the order") issued by the Central Government of India in
terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956,
("the Act"), we enclose in the Annexure a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we
report that:
a) i. The Company's networth has eroded due to losses and the Company
has become a Sick Industrial Company within the meaning of (Clause 'O')
of Sub-Section (1) of Section 3 of Sick Industrial Companies(Special
Provisions) of Act, 1985. The Company has made a reference before BIFR
on 28.05.2001. The Company has been declared as Sick Industrial Company
by the BIFR on 06.05.2003.
However, proceedings before BIFR were abated as per the Order by BIFR
on 22.04.2010 and the Company has filed an Appeal against the above
said Order of BIFR with AAIFR which has been disallowed. Now, the
matter is pending before the High Court of Madras.
Since Oct' 2007 the Company has stopped operations in its plant.
Despite erosion of Networth the accounts have been prepared on a going
concern basis.
ii. The Company has already settled M/s Punjab National Bank Loans and
M/s Tamilnadu Industrial Investment Corporation Limited Term Loans and
is in the process of settling dues with M/s State Industries Promotion
Corporation of Tamilnadu Ltd., under One Time Settlement Scheme,
pending settlement the amount paid Rs. 2,04,00,000/- has been shown
under Other Loans and Advances.
iii. Some of the balances of Short Term Loans and Advances and Trade
payables are subject to confirmation.
b) Subject to our comments above, 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;
c) 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;
d) 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;
e) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in Sub-Section (3C) of Section 211 of
the Companies Act, 1956;
f) 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 is disqualified as on 31st March,
2012, from being appointed as Director in terms of Clause (g) of
Sub-section (1) of Section 274 of the Companies Act, 1956;
g) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
i. In the case of the Balance Sheet, of the State of Affairs of the
Company as at 31st March, 2012;
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 the date.
ANNEXURE TO THE AUDITORS' REPORT
Referred to in paragraph 1 of our Report of even date
RE : Sterling Spinners Ltd. ("The Company")
(i) In respect of Fixed Assets :
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) All Fixed Assets were physically verified by the Management during
the year and there is a regular programme of verification which, in our
opinion, is reasonable having regard to the size of the Company and the
nature of its assets. No material discrepancies were noticed on such
verification.
(c) During the year, the Company has not disposed off any Fixed Assets.
(ii) In respect of its Inventory :
The Company has stopped production at the mill. Except old stores and
spares, there is no inventory. Therefore the provisions of Clause 4(ii)
of the order are not applicable to the Company.
(iii) (a) As informed the Company has not granted any loans, Secured or
unsecured to companies, firms or other parties covered in the Register
maintained under Section 301 of the Companies Act. 1956.
(b) The Company has taken loan from one party covered in the Register
maintained under Section 301 of the Companies Act, 1956. The maximum
amount involved during the year was Rs. 678.26 lakhs. The year end
balance of loan was Rs. 678.26 Lakhs.
(c) In our opinion, the rate of Interest and other terms and conditions
for such loan are not prima facie, prejudicial to the interest of the
Company.
(d) The Company is regular in repaying the Principal Amount as
stipulated and no interest has been paid as it is waived by the Party.
(e) There is no overdue amount of Loan taken from the party covered in
the Register maintained under Section 301 of the Companies Act, 1956.
(iv) In our opinion, and according to the information and explanations
given to us, there is an adequate internal control procedure
commensurate with the size of the Company and the nature of its
business, with regard to purchase of inventory, fixed assets and with
regard to the sale of goods. During the course of our audit, we have
not observed any continuing failure to correct major weakness in the
internal control system of the Company.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contracts or arrangements
referred to in Section 301 of the Companies Act, 1956 have been entered
into the register required to be maintained under that Section.
(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 Companies Act, 1956, have been made at prices that are reasonable
having regard to the prevailing market prices at the relevant time.
(vi) In our opinion, and according to the information and explanations
given to us, the Company has not accepted any deposits from the Public
and consequently the provisions of Sections 58A and 58AA or any other
relevant provisions of the Companies Act, 1956 and the rules framed
there under are not applicable.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size and the nature of its business.
(viii) Since the Company has stopped operations in the plant, reporting
under Clause 4 (viii) of the Companies' (Auditor's Report) Order, 2003
does not arise.
(ix)(a) According to the information and explanations given to us, the
Company is regular in depositing with appropriate authorities
undisputed statutory dues including Provident Fund, Investor education
protection fund, Employees State Insurance, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other
material statutory dues applicable to it.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth
Tax, Service Tax, Excise Duty and Cess were in arrears, as at 31st
March, 2012 for a period of more than six months from the date they
became payable.
(c) According to the information and explanations given to us, there
are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Excise
Duty and Cess which have not been deposited on account of any dispute.
(x) In our opinion, the accumulated losses of the Company are more than
fifty percent of its networth and the Company has incurred cash losses
during the financial year, covered by our audit and also in the
immediately preceding financial year. The company has been declared as
Sick Industrial Company by the BIFR on 06.05.03.
(xi) In our opinion and according to the information and explanations
given to us, the Company has defaulted in repayment of dues to
Financial Institutions as detailed below.
Name of the Principal Funded
Financial Rs. interest and TOTAL
Institution interest accrued Rs.
Rs.
A. TERM LOAN:
M/s. SIPCOT 3,00,00,000 25,86,63,433 28,86,63,433
TOTAL 3,00,00,000 25,86,63,433 28,86,63,433
Name of the Remarks
Financial
Institution
A. TERM LOAN: Paid against the Loans
M/s. SIPCOT Rs. 2,04,00,000 (under
OTS Scheme)
(xii) In our opinion and according to information and explanations
given to us, no loans and advances have been granted by the Company on
the basis of security by way of pledge of shares, debentures and other
securities.
(xiii) In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, the provisions of Clause 4 (xiii) of
the Companies (Auditor's Report) Order, 2003 are not applicable to the
Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, Securities, debentures and other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order,
2003 are not applicable to the Company.
(xv) 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.
(xvi) The Company has not raised any fresh Term Loan during the year.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) According to the information and explanation given to us, the
Company has not made preferential allotment of shares to parties and
companies covered in the register maintained under Section 301 of the
Companies Act, 1956.
(xix) According to the information and explanations given to us, during
the period covered by our audit report, the Company has not issued any
debentures.
(xx) The Company has not raised any money by public issues during the
year.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For D. SAMPATHKUMAR & CO.,
Regn.No.003556S
CHARTERED ACCOUNTANTS
M.K. RAVINDRAN
Partner
CHARTERED ACCOUNTANTS
M. No. 20887
Place: Chennai
Date : 09.04.2012
Mar 31, 2010
1. We have audited the attached Balance Sheet of M/s Sterling Spinners
Ltd, Chennai as at 31st March, 2010, the Profit and Loss Account on
that date and also 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.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued
by the Central Government of India in terms of Section 227(4A) 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) The Companys net worth has eroded due to losses and the Company
has become a Sick Industrial Company within the meaning of (Clause O)
of Sub Section (1) of Section 3 of the Sick Industrial Companies
(Special Provisions) Act 1985. The Company has made a reference before
BIFR on 28.05.2001 and the Company has been declared as Sick Industrial
Company by the BIFR on 06.05.2003. The rehabilitation package is still
not formulated. Since Oct. 2007 the Company has stopped operations in
its Plant. Despite erosion of net worth the accounts have been prepared
on a going concern basis.
ii The Company has defaulted in payment to M/s. SIPCOT and M/s. TIIC.
a) M/s. SIPCOT : Principal and interest outstandingRs. 2394 lac. This
includes interest of Rs. 417.69 charged during the year. The company is
yet to enter into OTS Scheme (one time settlement) M/s. SIPCOT.
b) M/s. TIIC : The company has entered into one time settlement (OTS)on
23.03.2007 for payment of Rs. 270 lakhs, but did not comply with time
schedule. M/s. TIIC has taken possession of mill on 10.02.2010 under
SARFAESI Act. The company is renegotiating OTS Scheme. Total dues as
per earlier OTS Rs. 296.16 lakhs, including interest of Rs.25.02 lacs
charged during the year.
iii. Some of the balances of Loans.and Advances, Sundry Debtors and
Sundry Creditors are subject to confirmation.
a) Subject to our comments above, 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, 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 Section 211 (3C) of the Companies Act, 1956;
e) On the basis of written representation 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 31 st 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;
f) 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 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 st March, 2010;
ii. In the case of the Profit and Loss Account, 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 the date.
ANNEXURE TO THE AUDITORS REPORT Referred to in paragraph 1 of our
Report of even date
i. In respect of Fixed Assets :
a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
b) All the assets have been physically verified by the Management
during the year and there is a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the Company
and the nature of its assets. No material discrepancies were noticed on
such verification.
c) During the year, the Company has not disposed off any fixed assets.
ii. In respect of Inventory :
The company has stopped production at the mill. Except old stores and
spares, there is no inventory. Therefore the provisions of Clause 4
(ii) of the order are not applicable to the company.
iii. a) As informed the company has not granted any loans, Secured or
unsecured to companies, firms or other parties covered in the Register
maintained under Section 301 of the Companies Act, 1956.
b) The Company has taken loan from one party covered in the Register
maintained under Section 301 of the Companies Act, 1956. The maximum
amount involved during the year was Rs.331.82 lakhs, The year end
balance of loan was Rs.288 71 Lakhs.
c) In our opinion, the rate of Interest and other terms and conditions
on which loan has been taken from the party covered in the Register
maintained under Section 301 of the Companies Act, 1956 are not, prima
facie, prejudicial to the interest of the Company.
d) The company is regular in repaying the Principal Amount as
stipulated and rrn in*orpSt has been paid as it is waived by him.
e) There is no overdue amount of Loan taken from the party covered in
the Register maintained under Section 301 of the Companies Act, 1956.
iv. In our opinion, and according to the information and explanations
given to us, there are adequete internal control procedures
commensurate with the size of the Company and the nature of its
business with regard to purchase of inventory, fixed assets and with
regard to the sale of goods. During the course of our audit, we have
not observed any continuing failure to correct major weakness in
internal controls.
v. a) According to the information and explanations given to us, we are
of the opinion that the particulars of contracts and arrangements
referred to in Section 301 of the Companies Act, 1956 have been entered
in the register required to be maintained under that Section.
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 Companies Act, 1956, have been made at prices that are reasonable
having regard to prevailing market prices at the relevant time.
vi. In our opinion, and according to the information and explanations
given to us, the Company has not accepted any deposits from the Public
and consequently the provisons of Sections 58A and 58AA or any other
relevant provisions of the Companies Act, 1956 and the rules framed
there under are not applicable.
vii. In our opinion, the Company has an internal audit system
commensurate with its size and the nature of its business.
viii. Since the Company has stopped operations in the plant, reporting
under Clause 4 (viii) of the Companies (Auditors Report) Order, 2003
does not arise.
ix. a) According to the information and explanations given to us, the
Company is regular in depositing with appropriate authorities
undisputed statutory dues including Provident Fund, Investor Education
Protection Fund, Employees State Insurance, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other
material statutory dues applicable to it.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth
Tax, Service Tax, Excise Duty and Cess were in arrears, as at 31 st
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, except
the following there are no dues of Income Tax, Sales Tax, Wealth Tax,
Service Tax, Excise Duty and Cess which have not been deposited on
account of any dispute.
Name of the Nature of Amount Period to
which the Forum where
dispute
State Act Dues Rs. amount
relates is pending
P.F. ACT P. F. Dues Rs. 2.95
lakhs 22.09.97 to
05.07.99 Madras High
Court
x. In our opinion, the accumulated losses of the Company are more than
fifty percent of its networth and the Company has incurred cash losses
during the financial year, covered by our audit and also in the
immediately preceeding financial year. The company has been declared as
Sick Industrial Company by the BIFR on 06.05.03.
xi. In our opinion and according to the information and explanations
given to us, the Company has defaulted in repayment of dues to
Financial Institutions as detailed below.
Rs. in Lakhs
Name of the
Financial Institution Prinicipal Funded interest Total
and interest
accured
A. TERM LOAN:
M/s. SIPCOT 300.00 2094.00 2394.00
M/s. TIIC (Under OTS) 244.32 51.84 296.16
Total 544.32 2145.84 2690.16
xii. In our opinion and according to information and explanations given
to us, no loans and advances have been granted by the company on the
basis of security byway of pledge of shares, debentures and other
securities.
xiii. In our opinion, the company is not a chit fund or a nidhi /
mutual benefit fund/society. Therefore the provisions of clause 4
(xiii) of the Companies (Auditors Report) Order, 2003 are not
applicable to the Company
xiv. In our opinion, the Company is not dealing in or trading in
shares, Securities, debentures and other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditors Report) Order,
2003 are not applicable to the company.
xv. 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.
xvi. The Company has not raised any fresh Term Loan during the year.
xvii. According to the infromation and explanations 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. According to the information and explanation given to us, the
Company has not made preferential allotment of shares to parties and
companies covered in the register maintained under Section 301 of the
Companies Act, 1956.
xix. According to the information and explanations given to us,during
the period covered by our audit report, the Company has not issued any
debentures
xx. The Company has not raised any money by public issues during the
year.
xxi. According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
Place: Chennai For S. DHANYAKUMAR & CO.,
Date: 23.04.2010 Chartered Accountants
(Regn. No.000748S)
D. SAMPATH KUMAR
Proprietor
M. No. 3483
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