Sri Ganapathy Mills Company Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion:

In our opinion and to the best of our Information and according to the explanations given to us except to note 4a of notes on accounts regarding provision for gratuity, the financial statements give the information required by the Act In the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the returns received from branches not visited by us;

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards, referred to in 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 1956.

e) On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 11, 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 AUDITORS'' REPORT

1. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification,

b) In our opinion, the Company has not disposed of substantial part of its fixed assets during the year and the going concern status of the company Is not affected.

2. In respect of Its inventories:

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

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

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

3. In respect of loans secured or unsecured granted or taken by the company to/from companies, firms or other parties covered In the register maintained under Section 301 of the Companies Act, 1956;

a) The Company has not granted any fresh unsecured loans and no loans have been taken from any party other than directors during the year.

b) In our opinion and according to the information and explanation given to us, the rate of Interest and other terms and conditions are not prima facie prejudicial to the interest of the company.

c) Since the Company has rot taken any loans other than directors, there is no question of overdue amount.

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

5. Based on the information and explanation furnished that transactions that need to be entered in the registers in pursuant of 301 of Act, have been entered and they have made at a rate which is not prejudicial to the interest of the company.

6. The Company has not accepted any deposits from Public and in our opinion and according to the explanations given to us the provisions of Section 5SA and 58AAof the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules 1975 is not applicable.

7. In our opinion the internal audit system of the company is commensurate with its size and nature of its business.

8. The Central Government has prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company. We have broadly reviewed the accounts and records of the company in this connection 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 same.

9. a) ln our opinion and according to the information and explanations given to us, during the year, the Company is not regular in depositing the Provident Fund and Employees State Insurance dues, with the appropriate authorities.

b) The disputed statutory dues pertaining to earlier years aggregating to Rs. 52.36 lacs that, have not been deposited on account of matters pending before appropriate authorities are as under and for which no provision had been made in the accounts

10. The Company has accumulated Losses to tune of Rs. 1013.10 lacs as at 31.3.2014 and has incurred cash loss of Rs. 140.27 lacs during the financial year covered by our audit and no cash loss was incurred in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has defaulted in repayment of dues to financial institutions subject to the clause no 8 (i) in the notes on accounts.

12. In our opinion and according to the information and explanation 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.

13. 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.

14. Since the Company is not Investment Company, the reporting regarding trading of Securities, Debentures and other Investments is not applicable.

15. According to the information and explanations given to us and based on the records examined by us, the Company has not given any guarantees for loans taken by others from banks or financial institutions during the year under review

16. The Company has raised Short Term loan of Rs. 30 lacs during the year. The term loans outstanding at the beginning of the year and those raised during the year were applied for the purpose for which they were raised.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the Company has utilized the amount from Short term Sources towards repayment of long term borrowings.

18. The company has not issued any debentures and hence creation of securities in respect of the same does not arise.

19. The company has not raised any money by way of Public Issue during the year.

20. In our opinion and according to the information and explanations given to us, no fraud on or by the Company has beer noticed or reported during the year that causes the financial statements to be materially misstated.

for M/S Krishnan and Raman

Chartered Accountants FRM0151S

Place : Tirunelveli CA. K.V. Raman Date : 18-O8-2014 M.No. 009790

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Mar 31, 2012

We have audited the attached Balance sheet of The Sri Ganapathy Mills Company Limited as at 31st March 2012 and the Profit and Loss account for the year ended on that date annexed thereto and 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.

1. 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 misstatements. An Audit includes examining, on test basis evidence supporting the amounts and disclosures in 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.

2. As required by the Companies (Auditor's Report) Order 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 hereto a statement on the matters specified in paragraphs 4 and 5 of the said order.

3. Further to our comments in the Annexure referred to in paragraph 2 and 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 has been kept by the company so far as it 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 company comply with the Mandatory Accounting Standards referred in Sub Section (3C) of Section 211 of the Companies Act, 1956 and in accordance with the accounting standards (AS) issued by the Institute of Chartered Accountants of India referred to in section 227 (3(1 )(d)) of the company's amendment ordinance 1998 with exception of non provision of gratuity (note 4a vide (AS 15) for treatment of retirement gratuity).

e) In our opinion and based on information and explanations given to us, none of the directors are disqualified as on 31st March 2012 from being appointed as directors 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 read together with significant policies and other notes thereon give the information required by the Companies Act 1956, in the manner so required, and present a true and fair view, in conformity with the accounting principles generally accepted in India:

(i) in so far as it relates to Balance Sheet, of the State of affairs of the Company as at 31st March, 2012

(ii) in so far as it relates to the Profit and Loss Account of the Profit of the Company for the year ended on that date: and

(iii) in so far as it relates to the Cash flow Statement, of the Cash flows of the Company for the year ended on that date.

ANNEUXRE TO AUDITORS' REPORT U/s 227 (4A)

(Referred to in Paragraph 2 of our report of even date)

1. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

b. In our opinion, the Company has not disposed of substantial part of its fixed assets during the year and the going concern status of the company is not affected.

2. In respect of its inventories:

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

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

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

3. In respect of loans secured or unsecured granted or taken by the company to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956;

a. The Company has not granted any fresh unsecured loans and no loans have been taken from any party other than directors during the year.

b. In our opinion and according to the information and explanation given to us, the rate of interest and other terms and conditions are not prima facie prejudicial to the interest of the company.

c. Since the Company has not taken any loans other than directors, there is no question of overdue amount.

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

5. In respect of transactions covered under Section 301 of the Companies Act, 1956.

a. In our opinion and according to the information and explanations given to me, the transactions made in -vv pursuance of contracts or arrangements, that needed to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b. In my opinion and according to the information and explanation given to me there are no transactions in pursuance of contracts or arrangements entered in the register maintained during the year to Rs.500000/- (Rupees Five Lakhs only) or more in respect of any party.

6. The Company has not accepted deposits from Public and in my opinion and according to the explanations given to us the provisions of Section 58A and 58AA of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules 1975 is not applicable.

7. In our opinion the internal audit system of the company is commensurate with its size and nature of its business.

8. The Central Government has prescribed maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company. We have broadly reviewed the accounts and records of the company in this connection 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 same.

9. a) In our openion and According to the information and explanations given to us during the year, the company is

regular in depositing the provident Fund and Employees State Insurance dues, with the appropriate authorities. b)The disputed statutory dues pertaining to earlier years aggregating to Rs. 82.64 lacs that have not been deposited on account of matters pending before appropriate authorities are as under and for which no provision had been made in the accounts:

10. The Company has accumulated Losses to tune of Rs..668.81 lakhs as at 31.3.2012 and has incurred cash loss during the financial year covered by our audit and no cash loss was incurred in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions and banks subject to the clause no 8 (ii) in the notes on accounts.

12. In our opinion and according to the information and explanation 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.

13. 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.

14. Since the Company is not Investment Company, the reporting regarding trading of Securities, Debentures and other investments is not applicable.

15. According to the information and explanations given to us and based on the records examined by us, the Company has not given any guarantees for loans taken by others from banks or financial institutions during the year under review

16. The Company has hire purchase loan of Rs.. 211.50 lakhs during the year. The term loans outstanding at the beginning of the year and those raised during the year were applied for the purpose for which they were raised.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the Company has not utilized any amount from Short term Sources towards repayment of long term borrowings.

18. The company has not issued any debentures and hence creation of securities in respect of the same does not arise.

19. The company has not raised any money by way of Public Issue during the year.

20. In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year that causes the financial statements to be materially mtstated.

for M/s Krishnan and Raman

Chartered Accountants

FRN 01515S

Place : Tirunelveli CA. K.V.Raman

Date : 29-08-2012 M.No. 009790

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Mar 31, 2010

We have audited the attached Balance sheet of The Sri Ganapathy Mills Company Limited as at 31st March 2010 and the Profit and Loss account for the year ended on that date annexed thereto and 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.

1. 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 misstatements. An Audit includes examining, on test basis evidence supporting the amounts and disclosures in 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.

2. As required by the Companies (Auditors Report) Order 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 hereto a statement on the matters specified in paragraphs 4 and 5 of the said order.

3. Further to our comments in the Annexure referred to in paragraph 2 and 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 has been kept by the company so far as it 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 company comply with the Mandatory Accounting Standards referred in Sub Section (3C) of Section 211 of the Companies Act, 1956 and in accordance with the accounting standards (AS) issued by the Institute of Chartered Accountants of India referred to in section 227 (3(1 )(d)) of the companys amendment ordinance 1998 with exception of non provision of gratuity (note 4a vide (AS 15) for treatment of retirement gratuity).

e) In our opinion and based on information and explanations given to us, none of the directors are disqualified as on 31st March 2010 from being appointed as directors 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 read together with significant policies and other notes thereon give the information required by the Companies Act 1956, in the manner so required, and present a true and fair view, in conformity with the accounting principles generally accepted in India:

(i) in so far as it relates to Balance Sheet, of the State of affairs of the Company as at 31st March, 2010

(ii) in so far as it relates to the Profit and Loss Account of the Loss of the Company for the year ended on that date: and

(iii) in so far as it relates to the Cash flow Statement, of the Cash flows of the Company for the year ended on that date.

ANNEUXRE TO AUDITORS REPORT U/s 227 (4A) (Referred to in Paragraph 2 of our report of even date)

1. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

b. In our opinion, the Company has not disposed of substantial part of its fixed assets during the year and the going concern status of the company is not affected.

2. In respect of its inventories:

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

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

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

3. In respect of loans secured or unsecured granted or taken by the company to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956;

a. The Company has not granted any fresh unsecured loans and no loans have been taken from any party other than directors during the year.

b. In our opinion and according to the information and explanation given to us, the rate of interest and other terms and conditions are not prima facie prejudicial to the interest of the company.

c. Since the Company has not taken any loans other than directors, there is no question of overdue amount.

4. In our opinion and according to the information and explanations given to us, there are adequa nternal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and also for the sale of goods. During the course of our audit, we have not observed any major weaknesses in internal controls.

5. In respect of transactions covered under Section 301 of the Companies Act, 1956.

a. In my opinion and according to the information and explanations given to me, the transactions made in pursuance of contracts or arrangements, that needed to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b. In my opinion and according to the information and explanation given to me there are no transactions in pursuance of contracts or arrangements entered in the register maintained during the year to Rs.500000/- (Rupees Five Lakhs only) or more in respect of any party.

6. The Company has not accepted deposits from Public and in my opinion and according to the explanations given to me the provisions of Section 58A and 58AA of the Companies Act, 1956 read with Companies (Acceptance of Deposits) Rules 1975 is not applicable.

7. In our opinion the internal audit system of the company is commensurate with its size and nature of its business.

8. The Central Government has prescribed maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company. We have broadly reviewed the accounts and records of the company in this connection 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 same.

9. According to the records of the company provident fund, Employee State insurance dues have been regularly deposited during the year with the appropriate authorities subject to the following.

a. The disputed statutory dues pertaining to earlier years aggregating to Rs. 100.30 lacs that have not been deposited on account of matters pending before appropriate authorities are as under arid for which no provision had been made in the accounts:



S. No.Name of the Statue Name of Forum where Amount the Dues dispute is pending Rs. in lacs

1 Central Excise Act, 1944 Service Tax High Court, Chennai 2.22

2 Tamil Nadu General Sales Hank Yarn Appellate Tribunal 4.68 Tax Act,1956 Obligation Madurai.

----do---- High Court, Chennai. 4.34

----do---- Taxation Special 2.90 Tribunal, Chennai.

3 Employees Provident Fund Liquidity Damages High Court, Chennai. 23.54 and Miscellaneous Act, 1958 and Interest

4 Employees S te Insurance Interest Labour Court 16.20 Act, 1974

5 Central Excise Act, 1944 Service Tax Customs, excise and 1.16 service tax appellate tribunal 6. Income Tax Act 1961 Income Tax Appeal before GT, (appeal) 45.26 Madurai.

10. The Company has accumulated Losses to tune of Rs.362.60 lakhs as at 31.3.2010 and has not incurred any cash losses during the financial year covered by our audit or in the immediately preceding financial year.

11. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions and banks subject to the clause no 8 (ii) in the notes on accounts.

12. In our opinion and according to the information and explanation 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.

13. 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.

14. Since the Company is not Investment Company, the reporting regarding trading of Securities, Debentures and other investments is not applicable.

15. According to the information and explanations given to me and based on the records examined by me, the Company has not given any guarantees for loans taken by others from banks or financial institutions during the year under review

16. The Company has raised new working capital term loan of Rs. 50 lacs and HP finance of Rs. 14.20 lacs during the year. The term loans outstanding at the beginning of the year and those raised during the year were applied for the purpose for which they were raised.

17. According to the information and explanations given to us and on an over I examination of the Balance Sheet of the Company, we are of the opinion that the Company has not utilized any amount from Short term Sources towards repayment of long term borrowings and acquisition of fixed assets.

18. During the year 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.

19. The company has not issued any debentures and hence creation of securities in respect of the same does not arise.

20. The company has not raised any money by way of Public Issue during the year.

21. In our opinion and according to the information and explanations given to us; no fraud on or by the Company has been noticed or reported during the year that causes the financial statements to be materially misstated.

for M/s Krishnan and Raman Chartered Accountants FRN01515S

CA. K.V.Raman M.No. 009790

Place : Tirunelveli Date : 23-08-2010