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.
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.
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
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
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
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
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
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
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
for M/S Krishnan and Raman
Place : Tirunelveli CA. K.V. Raman
Date : 18-O8-2014 M.No. 009790