Mar 31, 2015
We have audited the accompanying financial statements of Sri
Ramakrishna Mills (Coimbatore) Limited (Âthe Company'), which
comprise the Balance Sheet as at 31st March 2015, the Statement of
Profit and Loss and the Cash Flow Statement for the year then ended,
and a summary of significant accounting policies and other explanatory
information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 ("the Act")
with respect to the preparation and presentation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules,2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under
the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and the disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal financial control relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of
expressing an opinion on whether the Company has in place an adequate
internal financial controls system over financial reporting and the
operating effectiveness of such controls. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Company's
Directors, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31st March 2015 and its Loss and its cash flows for the year ended
on that date.
Emphasis of Matters
The Company being an ineligible company to retain deposits including
loans ought to have repaid all the deposits and loans before 31st
March 2015. However, in respect of 8 parties, the Company is yet to
repay loans to the extent of Rs 2,57,37,284/-.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015
("the Order") issued by the Central Government of India in terms
of sub-section (11) of section 143 of the Act, we give in the Annexure
a statement on the matters specified in the paragraph 3 and 4 of the
Order, to the extent applicable.
2. As required by Section 143 (3) of the Act, we report that:
a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
b) In our opinion proper books of account as required by law have been
kept by the Company so far as it appears from our examination of those
books;
c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account;
d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014;
e) On the basis of the written representations received from the
directors as on 31 March 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March 2015
from being appointed as a director in terms of Section 164 (2) of the
Act; and
f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and
Auditors) Rules, 2014, in our opinion and to the best of our
information and according to the explanations given to us:
i) The Company has disclosed its pending litigations under note no 2
in additional disclosure- Note 27.
ii) The Company does not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses
iii) Transferring of amount to the Investor Education and Protection
Fund does not arise as the Company has not declared any dividend in
the earlier years.
Annexure to the Independent Auditors' Report
The Annexure referred to in our Independent Auditors' Report to the
members of the Company on the financial statements for the year ended
31st March 2015, we report that:
1 a The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b The company has physically verified fixed assets during the year in
accordance with a regular and phased programme of verification, which
in our opinion provides for physical verification of all the fixed
assets at reasonable intervals having regard to the size of the
company and nature of its assets. According to the information and
explanations given to us no material discrepancies were noticed on
such verification.
2 a As explained to us, inventories have been physically verified by
the management at regular intervals during the year.
b In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the management are reasonable and adequate in relation to
the size of the company and the nature of its business. c In our
opinion and according to the information and explanations given to us,
the company has maintained proper records of its inventories and no
material discrepancies were noticed on physical verification as
compared to the book records.
3 The company, during the year, has not granted any loan, secured or
unsecured to companies, firms or other parties covered in the register
maintained under section 189 of the Companies Act, 2013, during the
financial year. Hence, Clause (b) and (c) is not applicable.
4 In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the company and nature of its business for the
purchase of inventory, fixed assets and also for the sale of goods and
services. We have not observed any major weaknesses in internal
control systems during the course of our audit.
5 The Company being an ineligible Company to retain deposits and loans
ought to have repaid all fixed deposits and loans before 31st March
2015. Although the Company repaid all the fixed deposits before 31st
March 2015, yet has not repaid 8 loans to the extent of Rs
2,57,37,284/-.
6 We have broadly reviewed the cost records maintained by the company
specified by the Central Government under sub-section (1) of Section
148 of the Companies Act, 2013, as applicable to the company, and are
of the opinion that prima facie the specified cost records have been
maintained. We have, however, not made a detailed examination of the
cost records with a view to determine whether they are accurate or
complete.
7 a According to the information and explanations given to us and on
the basis of our examination of the records of the Company, subject to
(ii) stated below, amounts deducted/ accrued in the books of account
in respect of undisputed statutory dues including provident fund,
income tax, sales tax, wealth tax, service tax, duty of customs, value
added tax, cess and other material statutory dues have been regularly
deposited during the year by the Company with the appropriate
authorities. As explained to us, the Company did not have any dues on
account of employees' state insurance and duty of excise.
According to the information and explanation given to us, the
undisputed arrears of statutory dues which were outstanding as at 31st
March 2015 for a period of more than Six months from the date they
became payable are as follows:
Nature of Statute Amount Year to which it relates
Income tax 17 13 585 A.Y 2010-11
b According to the information and explanations given to us, the
statutory dues which have not been deposited on account of dispute are
as follows:
Name of the Nature of the Dues Amount [Rs.]
Statute (in lakhs)
TNGST Addl. Sales tax 7.43
TNGST Sales tax 54.59
TNGST Sales tax 89.37
TNGST* Sales Tax 61.66*
TNGST TNGST, AST 121.97
Customs Customs duty on Cotton 8.26
APEB Fuel Surcharge adjustment 3.20
Name of the Period to which the amount Forum where dispute is
Statue relates pending
TNGST A.Y2004-05 to A.Y.2006-07 Madras High Court
TNGST A.Y.1995-96 Madras High Court
TNGST A.Y.1999-00 Madras High Court
TNGST* A.Y.1998-99 Madras High Court
TNGST A.Y.2000-01 Madras High Court
Customs A.Y.2003-04 Madras High Court
APEB July 2012 and November 2012 AP High Court
* [Rs.31 lakhs, since paid]
c Transferring of amount to the Investor Education and Protection Fund
does not arise as the Company has not declared any dividend in the
earlier years.
8 The Company has accumulated losses amounting to Rs. 13,50,08,056/-
as at 31st March 2015. The Company has incurred cash losses during the
financial year covered by our audit and in the immediately preceding
financial year.
9 In our opinion and according to the information and explanation
given to us, the company has not defaulted in repayment of dues to any
of the banks.
10 According to the information and explanations given to us the
company has not given any guarantee for loans taken by others from
banks or financial institutions.
11 In our opinion, and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
12 To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the
company was noticed or reported during the year that causes the
financial statements to be materially misstated.
For M.S. Jagannathan and Visvanathan
Chartered Accountants
Firm Regd No: 001209 S
M.V. JEGANATHAN
Place: Coimbatore Partner
Date : 28-05-2015 M. No. 214178
Mar 31, 2014
1 We have audited the accompanying financial statements of SRI
RAMAKRISHNA MILLS [COIMBATORE] LIMITEDwhich comprise the Balance Sheet
as at 31 March 2014, the Statement of Profit and Loss and the Cash
Flow St atement for the year then ended and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements:
2. Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance of the Company in accordance with the Account
-ing Standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 ( the Act ) read with the General Circular
15/2013 dated 13th September 2013 of the Ministry of Corporate
Affairs in respect of section 133 of the Companies Act, 2013.
This responsibility includes the design, implementation and
maintenance of internal control relevant to the preparation and
presentation of the financial statements that give a true and fair
view and are free from material misstatement, whether due to fraud or
error.
Auditor''s Responsibility:
3. Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
4. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor s Judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company s preparation and fair presentation of the financial statements
in order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
5. W e believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Opinion:
6. In our opinion and to the best of our information and according to
the explanations given to us, the financial statements give the
information required by the Act in the manner so required and give a
true and fair view in confor mity with the accounting principles
generally accepted in India!
(i) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March 2014;
(ii) In the case of the Statement of P rofit and Loss, of the LOSS for
the year ended on that date) and
(iii) In the case of the Cash Flow St atement, of the cash flows for
the year ended on that date.
Report on Other Legal and Regulatory Requirements:
7. As required by the Companies (Auditor s Report) Order, 2003 (" the
Order ), as amended, issued by the Central Government of India in terms
of sub-section (4A) of section 227 of the Act, we give in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the
Order.
8. As required by section 227(3) of the Act, we report that!
a. We have obtained all the infor mation and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit)
b. In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books)
c. The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this R eport are in agreement with the books of
account)
d. In our opinion, the Balance Sheet and Statement of Profit and Loss
comply with the Accounting Standards notified under the Companies Act,
1956 read with the General Circular 15/2013 dated 13 September 2013 of
the Ministry of Corporate Affairs in respect of section 133 of the
Companies Act, 2013 and
e. On the basis of written representations received from the directors
as on 31 March 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31 March 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT
The Annexure referred to in paragraph 7 of our report of even date to
the members of M/s SRI RAMAKRISHNA MILLS (CBE) LIMITED('' the Company )
for the year ended 31st March 2014:
i) a The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b The fixed assets have been physically verified by the management
according to a phased programme designed to cover all the items over
a period of three years, which in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets. Pursuant
to the programme, a portion of the fixed assets has been physically
verified by the management during the year. Dis crepancies noticed on
such physical verification were not material and have been properly
dealt with in books of accounts.
c There were no sale of substantial part of fixed assets during the
year and hence the going concern of the company is not affected.
ii) a Physical verification of Inventory [excluding stocks with third
parties] has been conducted at reasonable intervals by the Management.
In respect of inventory lying with third parties, these have substanti
-ally been confirmed by them. In our opinion, the frequency of verific
-ation is reasonable.
b The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the
company and the nature of its business.
c The company has maintained proper records of inventory and
discrepancies noticed on physical verification of inventories as
compared to book records were not material and have been appropriately
dealt with.
iii) a During the year, the Company has not granted any loans, secured
or unsecured to parties covered in the register maintained under
section 301 of the Companies Act, 1956 and hence sub clauses b, c & d
of clause (iii) are not applicable
b During the year, the company has taken unsecured loans amounting to
Rs.5,03,56,122/- from two parties covered in the register maintained
under section 301 of the Act .
c The rate of interest and other terms and conditions of the unsecured
loans taken are not prima facie prejudicial to the interest of the
company.
iv) a In our opinion and according to the explanation and information
given to us, there are adequate internal control procedures commensur
-ate with the size of the Company and the nature of the business for
the purchase of inventory and fixed assets and for the sale of goods.
b During the course of our Audit no major weakness has been noticed in
the internal controls.
v) a The transactions made in pursuance of contracts or arrangements,
that need to be entered in the register maintained under section 301
of the Companies Act, 1956 have been recorded in the register
maintained for the purpose.
b In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Act, have been made at prices which are reasonable having regard
to the Prevailing Market prices at the relevant time other than for
conversion charges received amounting to Rs.35,29,825/- (Net) for
which no comparable market prices were available and are considered
to be of special nature as explained by the management of the Company.
vi) In our opinion and according to the information and explanations
given to us the company has complied with the provisions of section 58A
and 58AA of the Companies Act, 1956 and the Companies [Acceptance of
Deposits] Rules 1975 with regard to the deposits accepted from the
public. No order has been passed by the National Company Law Tribunal
or Reserve Bank of India or any Court or any other Tribunal.
vii) In our opinion and according to the information and explanations
given to us, the internal audit was carried out by an external
Chartered Accountant and is commensurate with the size of the company
and the nature of its business.
viii) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the order made by the Central Government for the
maintenance of cost records under section 209(1) (d) of the companies
Act, 1956 and are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
ix) a According to the information and explanation given to us and
records examined by us, the company Subject tO (b) stated belowis
regular in depositing undisputed statutory dues including Investor
Education and Protection Fund, Income Tax, Value Added Tax, Wealth Tax,
Service Tax and any other statutory dues with the appropriate
authorities. b According to the information and explanation given to
us, the undisputed arrears of statutory dues which were outstanding as
at 31st March 2014 for a period of more than Six months from the date
they became payable are as follows:
Name of the Statute Amount Period to which the
Income tax 13,00,000/- A.Y 2010-2011
c According to the information and explanations given to us, the
statutory dues which have not been deposited on account of dispute are
as follows:
Name of Nature of the Amount Period to which
the Statute Dues (in lakhs) the amount relates
TNGST Addl.Sales tax 7.43 A.Y2004-05 to A.Y2006-07
TNGST Sales tax 54.59 A.Y 1995-96
TNGST Sales tax 89.37 A.Y 1999-00
TNGST* Sales Tax 61.66* A.Y 1998-99
TNGST TNGST, AST 121.97 A.Y2000-01
Customs Customs duty 8.26 A.Y2003-04
on Cotton
APEB Fuel Surcharge 3.20 July 2012 and
adjustment November 2012
Name of the Statue Formate dispute is pending
TNGST Madras High Court
TNGST Madras High Court
TNGST Madras High Court
TNGST Madras High Court
TNGST Madras High Court
Customs Madras High Court
APEB AP High Court
x) The company has accumulated loss of Rs.9,75,29,199/- for the year
ended 31st March 2014 and it has incurred cash losses both during the
current financial year and in the immediately preceding financial year.
xi) In our opinion and according to the information and explanation
given to us the company has not defaulted in repayment of dues to any
of the banks.
xii) During the year, the Company has not granted loans and advances on
the basis of security by way of pledge of shares, debentures and other
securities.
xiii) In our opinion the company is not a chit fund or a nidhi / mutual
benefit/society. Therefore, c lause 4(xiii) of the Companies (Auditors
Report) order 2003 is not applicable to the Company.
xiv) In our opinion and according to the information and explanation
given to us, the Company is not dealing or trading in Shares,
Securities, debentures and other Investments.
xv) In our opinion and according to the information and explanation
given to us, the company, during the year has not given any guarantee
for loans taken by others from banks or financial institutions.
xvi) In our opinion, and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
xvii) According to the information and explanation given to us and on
an overall examination of the Balance sheet of the company, we report
thatfunds raised on
short term basis to the extent of Rs 5,22,33,094/- have been used for
long-term
xviii) The Company has not made any preferential allotment of shares
during the year to the parties and companies covered in the Register
maintained under section 301 of the Companies Act, 1956.
xix) The C ompany has not issued any debentures during the financial
year and hence creation of security in respect thereof does not arise.
xx) The C ompany has not raised any money through a public issue during
the year.
xxi) Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the company has been noticed or reported during the course of our
Audit.
For M.S.Jagannathan & Visvanathan
Chartered Accountants
Firm R egistration No. 001209S
Place! Coimbatore (sd.) M.J.VIJAYARAGHAVAN
Date ! 14.08.2014 Partner
M.No.7534
Mar 31, 2013
Report on the Financial Statements:
We have audited the accompanying financial statements of SRI
RAMAKRISHNA MILLS [COIMBATORE] LIMITED which comprise the Balance Sheet
as at 31 March 2013, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements:
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of in''ernal control relevant
to the preparation and presentation of the financial statements that
give a true and fair view and are free from material misstatement,
whether due to fraud or error.
Auditor''s Responsibility:
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor1 s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
the reasonableness of the accounting estimates made by management, as
well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion:
In our opinion and to the best of our information and according to the
explanations given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(i) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31 March 2013;
(ii) In the case of the Statement of Profit and Loss, of the LOSS for
the year ended on that date; and
(iii) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements:
1. As required by the Companies (Auditor" s Report) Order, 2003 ("the
Order"), as amended, issued by the Central Government of India in terms
of sub-section (4A) of section 227 of the Act, we give in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the
Order.
2. As required by section 227(3) of the Act, we report that:
a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. In our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c. The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account;
d. In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Row Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956; and
e. On the basis of written representations received from the directors
as on 31 March 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31 March 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
ANNEXURE TO THE AUDITORS* REPORT
The Annexure referred to in our report to the Members of SRI
RAMAKRISHNA MILLS [COIMBATORE] UMITED for the year ended 31 March 2013.
We report that: i) a The Company is maintaining proper records showing
full particulars, including quantitative details and situation of fixed
assets. b The fixed assets have been physically verified by the
management according to a phased programme designed to cover all the
items over a period of three years, which in our opinion, is reasonable
having regard to the size of the Company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the management during the year discrepancies
noticed on such physical verification were not material and have been
properly dealt with in books of accounts. c There were no sale of
substantial part of fixed assets during the year and hence the going
concern of the company is not affected. ii) a Physical verification of
Inventory [excluding stocks with third parties] has been conducted at
reasonable intervals by the Management. In respect of inventory lying
with third parties, these have substantially been confirmed by them.
In our opinion, the frequency of verification is reasonable. b The
procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
company and the nature of its business. c The company has maintained
proper records of inventory and discrepancies noticed on physical
verification of inventories as compared to book records were not
material and have been appropriately dealt with. iii) a During the
year, the Company has not granted any loans, secured or unsecured to
parties covered in the register maintained under section 301 of the
Companies Act, 1956 and hence sub clauses b, c & d of clause (iii) are
not applicable b During the year, the company has taken unsecured loans
amounting to Rs.33,44,451/- from one party covered in the register
maintained under section 301 of the Act. c The rate of interest and
other terms and conditions of the unsecured loans taken are not prima
facie prejudicial to the interest of the company. iv) a In our opinion
and according to the explanation and information given to us, there are
adequate internal control procedures commensurate with the size of the
Company and the nature of the business for the purchase of inventory
and fixed assets and for the sale of goods. b During the course of our
Audit no major weakness has been noticed in the internal controls. v)
a The transactions made in pursuance of contracts or arrangements, that
need to be entered in the register maintained under section 301 of the
Companies Act, 1956 have been recorded in the register maintained for
the purpose b In our opinion and according to the information and
explanations given to us, the transactions made in pursuance of
contracts or arrangements entered in the register maintained under
section 301 of the Act, have been made at prices which are reasonable
having regard to the Prevailing Market prices at the relevant time
other than for conversion charges paid amounting to Rs.80,45,320/-
(Net) for which no comparable market prices were available and are
considered to be of special nature as explained by the management of
the Company. vi) In our opinion and according to the information and
explanations given to us the company has complied with the provisions
of section 58A and 58AA of the Companies Act, 1956 and the Companies
[Acceptance of Deposits] Rules 1975 with regard to the deposits
accepted from the public. No order has been passed by the National
Company Law Tribunal or Reserve Bank of India or any Court or any other
Tribunal. vii) In our opinion and according to the information and
explanations given to us, the internal audit was carried out by an
externa] Chartered Accountant and is commensurate with the size of the
company and the nature of its business. viii) We have broadly reviewed
the books of accounts maintained by the Company pursuant to the order
made by the Central Government for the maintenance of cost records
under section 209(1) (d) of the companies Act, 1956 and are of the
opinion that prima facie the prescribed accounts and records have been
made and maintained. We have not, however, made a detailed examination
of the records with a view to determine whether they are accurate or
complete. ix) a According to the information and explanation given to
us and records examined by us, the company subject to (b) stated below
is regular in
depositing undisputed statutory dues including Investor Education and
Protection Fund, Income Tax, Value Added Tax, Wealth Tax, Service Tax
and any other statutory dues with the appropriate authorities. b
According to the information and explanation given to us, the
undisputed arrears of statutory dues which were outstanding as at 31st
March 2013 for a period of more than six months from the date they
became payable are as follows:
Name of the Statute Amount Period to which the
(Rs.) amount relates
The Income tax Act, 1961 17,13,585 A.Y2010-2011
x) The company has accumulated loss of Rs.625,24,472 /- for the year
ended 31st March 2013 and it has incurred cash losses both during the
current financial year and in the immediately preceding financial year.
xi) In our opinion and according to the information and explanation
given to us the company has not defaulted in repayment of dues to any
of the banks.
xii) During the year, the Company has not granted loans and advances on
the basis of security by way of pledge of shares, debentures and other
securities.
xiii) In our opinion the company is not a chit fund or a nidhi/mutual
benefit/society. Therefore, clause 4(xiii) of the Companies (Auditors
Report) order 2003 is not applicable to the Company
xiv) In our opinion and according to the information and explanation
given to us, the Company is not dealing or trading in Shares,
Securities, debentures and other Investments.
xv) In our opinion and according to the information and explanation
given to us, the company, during the year has not given any guarantee
for loans taken by others from banks or financial institutions.
xvi) In our opinion, and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
xvii) According to the information and explanation given to us and on
an overall examination of the Balance sheet of the company, we report
that no funds raised on short term basis have been used for long-term
investment.
xviii) The Company has not made any preferential allotment of shares
during the year to the parties and companies covered in the Register
maintained under section 301 of the Companies Act, 1956.
xix) The Company has not issued any debentures during the financial
year and hence creation of security in respect thereof does not arise.
xx) The Company has not raised any money through a public issue during
the year.
xxi) Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the company has been noticed or reported during the course of our
Audit.
For M S Jagannathan & Visvanathan
Chartered Accountants
Firm Regd. No. 001209S
(Sd/-)
M J Vrjayaraghavan Coimbatore
Partner
30.05.2013 M No 7534
Mar 31, 2012
1) We have audited the attached balance sheet of SRI RAMAKRISHNA MILLS
(COIMBATORE) LIMITED as at 31st March, 2012 and Statement of Profit and
Loss for the year ended on that date annexed thereto and the cash flow
statement for the year ended on that date. These financial statements
are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements based on our
audit.
2) We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management. as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3) As required by the Companies (Auditors' Report) Order, 2003, and as
amended by the Companies (Auditors' Report) Amendment order, 2004
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4) Further to our comments in the Annexure referred to above, we report
that;
a) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purposes of
our audit;
b) In our opinion, proper books of account, as required by law have
been kept by the Company so far as appears from our examination of
those books;
c) The Balance Sheet, Statement of Profit and Loss and Cash Flow
statement dealt with by this report are in agreement with the books of
account;
d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow statement dealt with by this report comply with accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956.
e) On the basis of written representations received from the directors,
as on 31st March, 2012 and taken on record by the Board of Directors,
we report that none of the directors are disqualified as on 31st March,
2012 from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956 on that said
date.;
5) In our opinion, and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act 1956, in the manner so required give a
true and fair view in conformity with the accounting principles
generally accepted in India:
a) In the case of Balance sheet, of the state of affairs of the company
as at 31st March 2012.
b) In the case of Statement of Profit and Loss, of the Loss for the
year ended on that date
c) In the case of the Cash Flow statement, of the cash flows for the
year ended on that date
ANNEXURE REFERRED TO IN PARAGRAPH (3) OF OUR REPORT OF EVEN DATE
i) a. The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b. The fixed assets have been physically verified by the management
according to a phased programme designed to cover all the items over a
period of three years, which in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the management during the year discrepancies
noticed on such physical verification were not material and have been
properly dealt with in books of accounts.
c. There were no sale of substantial part of fixed assets during the
year and hence the going concern of the company is not affected.
ii) a. Physical verification of Inventory (excluding stocks with third
parties) has been conducted at reasonable intervals by the Management.
In respect of inventory lying with third parties, these have
substantially been confirmed by them. In our opinion, the frequency of
verification is reasonable.
b. The procedures of physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
iii) c. The company has maintained proper records of inventory and
discrepancies noticed on physical verification of inventories as
compared to book records were not material and have been appropriately
dealt with. During the year, the company has neither granted nor taken
any loans, secured or unsecured from or to parties covered in the
register maintained under section 301 of the Companies Act, 1956 and
hence sub clauses b, c & d of clause (iii) are not applicable.
iv) a. In our opinion and according to the explanation and information
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of the
business for the purchase of inventory and fixed assets and for the
sale of goods.
b. During the course of our Audit no major weakness has been noticed
in the internal controls.
v) a. The transactions made in pursuance of contracts or arrangements,
that need to be entered in the register maintained under section 301 of
the Companies Act, 1956 have been recorded in the register maintained
for the purpose
b. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Act, have been made at prices which are reasonable having regard to
the prevailing market prices at the relevant time other than for
conversion charges paid amounting to Rs. 1,93,28,907/- (Net) for which
no comparable market prices were available and are considered to be of
special nature as explained by the management of the Company.
vi) In our opinion and according to the information and explanations
given to us the company has complied with the provisions of section 58A
and 58AA of the Companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules 1975 with regard to the deposits accepted from the
public. No order has been passed by the National Company Law Tribunal
or Reserve Bank of India or any Court or any other Tribunal.
vii) In our opinion and according to the information and explanations
given to us, the internal audit was carried out by an external
Chartered Accountant and is commensurate with the size of the company
and the nature of its business.
viii) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the order made by the Central Government for the
maintenance of cost records under section 209(1) (d) of the companies
Act, 1956 and are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
ix) a According to the information and explanations given to us and
records examined by us, the company subject to (b) stated below is
regular in depositing undisputed statutory dues including Investor
Education and Protection Fund, Income Tax, Value Added Tax, Wealth Tax,
Service Tax and any other statutory dues with the appropriate
authorities.
b. According to the information and explanation given to us, the
undisputed arrears of statutory dues which were outstanding as at 31st
March 2012 for a period of more than six months from the date they
became payable are as follows:
Name of the Amount Period to which the
Statute (Rs.) amount relates
Income tax 57,63,387 A.Y 2010-2011
c. According to the information and explanations given to us, the
statutory dues which have not been deposited on account of dispute are
as follows:
Name of Nature of Amount Period to Forum where
Statute Dues (Rs. In which the dispute is
crore) amount pending
relates
TNGST Addl. 7.43 A.Y.2004-05 Madras High Court
Sales tax to 2006-07
TNGST Sales tax 54.59 A.Y. 1995-96 Madras High Court
TNGST Sales tax 89.37 A.Y 1999-00 Madras High Court
TNGST* Sales Tax 61.66* A.Y.1998-99 Madras High Court
TNGST TNGST, AST 121.97 F.Y.2000-01 Madras High Court
Customs Customs duty
on Cotton 8.26 F.Y.2003-04 Madras High Court
*(Rs. 31 lakhs, since paid)
x) The Company has accumulated loss of Rs. 3,54,78,715/- for the year
ended 31st March 2012 and it has incurred cash loss for the above year.
However, in the immediately preceding Financial Year, there was no cash
loss.
xi) In our opinion and according to the information and explanation
given to us the company has not defaulted in repayment of dues to any
of the banks.
xii) During the year, the Company has not granted loans and advances on
the basis of security by way of pledge of shares, debentures and other
securities.
xiii) In our opinion the company is not a chit fund or a nidhi/mutual
benefit/society. Therefore, clause 4(xiii) of the Companies (Auditors'
Report) order 2003 is not applicable to the Company.
xiv) In our opinion and according to the information and explanation
given to us, the Company is not dealing or trading in shares,
securities, debentures and other Investments.
xv) In our opinion and according to the information and explanation
given to us, the company, during the year has not given any guarantee
for loans taken by others from banks or financial institutions.
xvi) In our opinion, and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
xvii) According to the information and explanation given to us and on
an overall examination of the Balance sheet of the company, we report
that short term funds amounting to Rs. 2.94 crores have been used for
long term application.
xviii) The Company has not made any preferential allotment of shares
during the year to the parties and companies covered in the Register
maintained under section 301 of the Companies Act, 1956.
xix) The Company has not issued any debentures during the financial
year and hence creation of security in respect thereof does not arise.
xx) The Company has not raised any money through a public issue during
the year.
xxi) Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the company has been noticed or reported during the course of our
Audit.
For M. S. Jagannathan & Visvanathan
Chartered Accountants
Firm Regd. No. 001209S
(Sd.) M. J. Vijayaraghavan
Partner
M. No. 7534
Coimbatore
13.08.2012
Mar 31, 2011
1) We have audited the attached balance sheet of SRI RAMAKRISHNA MILLS
[COIMBATORE] LIMITED as at 31st March, 2011 and also the Profit and
Loss Account for the year ended on that date annexed thereto and the
cash flow statement for the year ended on that date. These financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
2) We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3) As required by the Companies [ Auditors Report] Order, 2003, and as
amended by the Companies (Auditors Report) Amendment order, 2004
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4) Further to our comments in the Annexure referred to above, we report
that;
a) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purposes of
our audit;
b) In our opinion, proper books of account, as required by law have
been kept by the Company so far as appears from our examination of
those books;
c) The Balance Sheet, Profit and Loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
d) In our opinion, the Balance Sheet, Profit and Loss account and Cash
Flow statement dealt with by this report comply with accounting
standards referred to in sub-section (3C) of section 211 of the
Companies Act, 1956.
e) On the basis of written representations received from the directors,
as on 31st March, 2011 and taken on record by the Board of Directors,
we report that none of the directors are disqualified as on 31st March,
2011 from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956 on that said
date.;
5) In our opinion, and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act 1956, in the manner so required give a
true and fair view in conformity with the accounting principles
generally accepted in India:
a) In the case of Balance sheet, of the state of affairs of the company
as at 31st March 2011.
b) In the case of Profit and Loss account, of the Profit for the year
ended on that date
c) In the case of the cash flow statement, of the cash flows for the
year ended on that date
ANNEXURE REFERRED TO IN PARAGRAPH [3] OF OUR REPORT OF EVEN DATE
i) a The Company is maintaining proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b The fixed assets have been physically verified by the management
according to a phased programme designed to cover all the items over a
period of three years, which in our opinion, is reasonable having
regard to the size of the Company and the nature of its assets.
Pursuant to the programme, a portion of the fixed assets has been
physically verified by the management during the year. Discrepancies
noticed on such physical verification were not material and have been
properly dealt with in books of accounts.
c There were no sale of substantial part of fixed assets during the
year and hence the going concern of the company is not affected.
ii) a Physical verification of Inventory [excluding stocks with third
parties] has been conducted at reasonable intervals by the Management.
In respect of inventory lying with third parties. These have
substantially been confirmed by them. In our opinion, the frequency of
verification is reasonable.
b The procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
company and the nature of its business.
c The company has maintained proper records of inventory and
discrepancies noticed on physical verification of inventories as
compared to book records were not material and have been appropriately
dealt with.
iii) a During the year, the Company has not granted any loans, secured
or unsecured to parties covered in the register maintained under
section 301 of the Companies Act, 1956 and hence sub clauses b, c & d
of clause (iii) are not applicable
b During the year, the company has taken unsecured loans in the nature
of trade deposit amounting to Rs.2.00 Crore from one party covered in
the register maintained under section 301 of the Act and the maximum
amount outstanding as on the date is Rs.6.02 Crores.
c The rate of interest and other terms and conditions of the unsecured
loans taken are not prima facie prejudicial to the interest of the
company.
d There are no overdue principal and interest on loans taken from
parties covered in the Register maintained under Section 301 of the
Companies Act, 1956.
iv) a In our opinion and according to the explanation and information
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of the
business for the purchase of inventory and fixed assets and for the
sale of goods.
b During the course of our Audit no major weakness has been noticed in
the internal controls.
v) a The transactions made in pursuance of contracts or arrangements,
that need to be entered in the register maintained under section 301 of
the Companies Act, 1956 have been recorded in the register maintained
for the purpose
b In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Act, have been made at prices which are reasonable having regard to
the Prevailing Market prices at the relevant time other than for
conversion charges paid amounting to Rs.4,05,54,795/- (Net) for which
no comparable market prices were available and are considered to be of
special nature as explained by the management of the Company.
vi) In our opinion and according to the information and explanations
given to us the company has complied with the provisions of section 58A
and 58AA of the Companies Act, 1956 and the Companies [Acceptance of
Deposits] Rules 1975 with regard to the deposits accepted from the
public. No order has been passed by the National Company Law Tribunal
or Reserve Bank of India or any Court or any other Tribunal.
vii) In our opinion and according to the information and explanations
given to us, the internal audit was carried out by an external
Chartered Accountant and is commensurate with the size of the company
and the nature of its business.
viii) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the order made by the Central Government for the
maintenance of cost records under section 209(1) (d) of the companies
Act, 1956 and are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
ix) a. According to the information and explanation given to us and
records examined by us, the company subject to (b) stated below is
regular in depositing undisputed statutory dues including Investor
Education and Protection Fund, Income Tax, Value Added Tax, Wealth Tax,
Service Tax and any other statutory dues with the appropriate
authorities.
b. According to the information and explanation given to us, the
undisputed arrears of statutory dues which were outstanding as at 31st
March 2011 for a period of more than Six months from the date they
became payable are as follows:
Name of the Statute Amount Period to which the
(Rs.) amount relates
Income tax 1,14,84,366 A.Y. 2010-2011
c. According to the information and explanations given to us, the
statutory dues which have not been deposited on account of dispute are
as follows:
x) The company does not have any accumulated losses as at 31st March
2011. The company has not incurred any cash losses during the financial
year covered by
Name of Nature of Amount Period to Forum where
the the dues (Rs. in which the dispute is
statue lakhs) amount pending
relates
TNGST Addl. Sales tax 7.43 A.Y.2004-05 Madras High Court
to 2006-07
TNGST Sales tax 54.59 A.Y.1995-96 Madras High Court
TNGST Sales tax 89.37 A.Y.1999-00 Madras High Court
TNGST* Sales Tax 61.66* A.Y.1998-99 Madras High Court
TNGST TNGST, AST 121.97 F.Y.2000-01 Madras High Court
Customs Customs duty
on Cotton 8.26 F.Y.2003-04 Madras High Court
*(Rs.31 lakhs, since paid)
our audit and in the immediately preceding financial year.
xi) In our opinion and according to the information and explanation
given to us the company has not defaulted in repayment of dues to any
of the banks.
xii) During the year, the Company has not granted loans and advances on
the basis of security by way of pledge of shares, debentures and other
securities.
xiii) In our opinion the company is not a chit fund or a nidhi/mutual
benefit/society. Therefore, clause 4(xiii) of the Companies (Auditors
Report) order 2003 is not applicable to the Company.
xiv) In our opinion and according to the information and explanation
given to us, the Company is not dealing or trading in Shares,
Securities, debentures and other Investments.
xv) In our opinion and according to the information and explanation
given to us, the company, during the year has not given any guarantee
for loans taken by others from banks or financial institutions.
xvi) In our opinion, and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
xvii) According to the information and explanation given to us and on
an overall examination of the Balance sheet of the company, we report
that no funds raised on short time basis have been used for long-term
investment.
xviii) The Company has not made any preferential allotment of shares
during the year to the parties and companies covered in the Register
maintained under section 301 of the Companies Act, 1956.
xix) The Company has not issued any debentures during the financial
year and hence creation of security in respect thereof does not arise.
xx) The Company has not raised any money through a public issue during
the year.
xxi) Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the company has been noticed or reported during the course of our
Audit.
For M S Jagannathan & Visvanathan
Chartered Accountants
Firm Regd. No. 001209S
(Sd.) M J Vijayaraaghavan
Partner
M No.7534
Coimbatore
30.05.2011
Mar 31, 2010
1. We have audited the attached balance sheet of SRI RAMAKRISHNA MILLS
[COIMBATORE] LIMITED as at 31st March, 2010 and also the Profit and
Loss Account for the year ended on that date annexed thereto and the
cash flow statement for the year ended on that date. These financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies [Auditors Report] Order, 2003, and as
amended by the Companies (Auditors Report) Amendment order, 2004
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to above, we
report that;
a) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purposes of
our audit;
b) In our opinion, proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) The Balance Sheet, Profit and Loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
d) In our opinion, the Balance Sheet, Profit and Loss account and cash
flow statement dealt with by this report comply with the Accounting
Standards referred to in sub- section (3C) of section 211 of the
Companies Act, 1956.
e) On the basis of written representations received from the directors,
as on 31st March, 2010 and taken on record by the Board of Directors,
we report that none of the directors are disqualified as on 31st March,
2010 from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956 on that said
date.;
5. In our opinion, and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
accepted in India:
a. In the case of Balance Sheet, of the state of affairs of the
company as at 31st March 2010
b. In the case of Profit and Loss account, of the PROFIT for the year
ended on that date; and
c. In the case of the cash flow statement, of the cash flows for the
year ended on that date;
ANNEXURE REFERRED TO IN PARAGRAPH [3] OF OUR REPORT OF EVEN DATE
i) a) The company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) The fixed assets have been physically verified by the management
according to a phased programme designed to cover all the items over a
period of three years, which in our opinion, is reasonable having
regard to the size of the Company and nature of its assets. Pursuant to
the programme, a portion of the fixed assets has been physically
verified by the management during the period and discrepancies noticed
on such physical verification were not material and have been properly
dealt with in books of Accounts.
c) There were no disposal of substantial part of fixed assets during
the period and hence the going concern status of the Company is not
affected.
ii) a) Physical verification of Inventory [excluding stocks with third
parties] has been conducted at reasonable intervals by the Management.
In respect of inventory lying with third parties, these have
substantially been confirmed by them. In our opinion, the frequency of
verification is reasonable.
b) The procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
company and the nature of its business.
c) The company has maintained proper records of inventory and
discrepancies noticed on physical verification of inventories as
compared to book records were not material and have been appropriately
dealt with.
iii) The company has neither granted nor taken any loans, secured or
unsecured to firms, Companies or other parties covered in the register
maintained under section 301 and hence sub clauses b, c & d of clause
(iii) are not applicable.
iv) a) In our opinion and according to the explanation and information
given to us there is adequate internal control system commensurate with
the size of the Company and the nature of the business for the purchase
of inventory and fixed assets and for the sale of goods.
b) During the course of our Audit no major weakness has been noticed in
the internal controls.
v) a) The transactions made in pursuance of contracts or arrangements,
that need to be entered in the register maintained under section 301 of
the Companies Act, 1956 have been recorded in the register maintained
for the purpose.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Act, have been made at prices which are reasonable having regard to
the prevailing market prices at the relevant time other than for
conversion charges amounting to Rs.4,49,61,104/- (Net) for which no
comparable market prices were available and are considered to be of
special nature as explained by the management of the Company.
vi) The Company during the period has not accepted any deposit from the
public and hence provisions of section 58A of the Companies Act, 1956
and the companies (Acceptance of Deposits) Rules 1975 are not
applicable.
vii) On the basis of Internal audit reports broadly reviewed by us, we
are of the opinion that, the coverage of Internal Audit functions
carried by a Chartered Accountant appointed by the Management is
commensurate with the size of the Company and the nature of its
business.
viii) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the order made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956 and are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
ix) a) According to the information and explanations given to us and
records examined by us , the company is regular in depositing
undisputed statutory dues including Provident Fund, Investor Education
and Protection Fund, Employees State Insurance, Income- tax, Wealth
tax, Service tax and any other statutory dues with the appropriate
authorities.
b) According to the information and explanations given to us, no
undisputed arrears of statutory dues were outstanding as at 31st March
2010 for a period of more than six months from the date they became
payable.
c) According to the information and explanations given to us, the
statutory dues which have not been deposited on account of dispute are
as follows:
Name Amount Period to
Nature of Forum where
of the Rs. in which the
the Dues dispute is pending
Statute lakhs) amount relates
TNGST Addl. Sales
tax 7.43 A.Y.2004-05 Madras High Court
to 2006-07
TNGST Sales tax 54.59 A.Y.1995-96 Madras High Court
TNGST Sales tax 89.37 A.Y.1999-00 Madras High Court
TNGST Sales Tax 61.66 * A.Y.1998-99 Madras High Court
TNGST TNGST, AST 121.97 A.Y.2000-01 Madras High Court
Customs Customs duty
on Cotton 8.26 A.Y.2003-04 Madras High Court
-(Rs.31 lakhs, since paid)
x) The Company has accumulated losses of Rs. 1.02 crores as at 31st
March 2010 . The Company has not incurred cash losses during the year
covered by our audit but has incurred cash losses in the immediately
preceding financial year.
xi) According to the information and explanation given to us and on the
basis of records examined by us, the Company has during the period not
defaulted in repayment of loans to Bank.
xii) During the period, the Company has not granted loans and advances
on the basis of security by way of pledge of shares, debentures and
other securities.
xiii) In our opinion the company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, clause 4 (xiii) of the Companies
(Auditors Report) order, 2003 is not applicable to the Company.
xiv) In our opinion and according to the information and explanation
given to us, the Company is not dealing or trading in Shares,
Securities, debentures and other Investments.
xv) In our opinion and according to the information and explanation
given to us, the company, during the period has not given any guarantee
for loans taken by others from banks or financial Institutions.
xvi) In our opinion, and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
xvii) According to the information and explanations given to us and on
an overall examination of the Balance sheet of the company, we report
that the funds raised on short term basis amounting Rs. 491.92 lakhs
have been used for long-term investment.
x v iii) The company has not made any preferential allotment of shares
to parties and companies covered in the Register maintained under
Section 301 of the Companies Act, 1956.
xix) The company has not issued any debentures during the period and
hence creation of security in respect of debentures does not arise.
xx) The company has not raised any money through a public issue during
the period.
xxi) Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our
audit.
For M S Jagannathan & Visvanathan
Chartered Accountants
Firm Regd. No. 001209S
(Sd.) M J Vijayaraghavan
Partner
M No.7534
Coimbatore
28.06.2010