We have audited the accompanying financial statements of The Sri
Ganapathy Mills Company Limited (the Company) which Comprise the Balance
sheet as at 31st March, 2013, the statement of profit and loss and the
Cash Flow Statement for the year 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 given 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 the 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 standard 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 risks 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
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, 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 accounting principles generally accepted in
(i) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st 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 of 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 (4 A) of Section 227 of the Act, we give in the Annexure
a statement on the matter 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
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
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
d. In our opinion, the Balance sheet, Statement of profit and Loss and
Cash flow Statement comply with Accounting Standards referred to 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
e. On the basis of written representations received from the directors
as on 31st March, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31st 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.
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 us, 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 us there are no transactions in pursuance of contracts or
arrangements entered in the register maintained during the year to
Rs.5000007- (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 opinion 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. 82.51 lacs that have not been deposited on account of
matters pending before appropriate authorities
2 Employees Provident Fund Liquidity Damages High Court, Chennai.
53.84 and Miscellaneous Act, 1958 and Intrest
3 Employees State Insurance Interest Labour Court 16.75 Act, 1974
10. The Company has accumulated Losses to tune of Rs.716 lakhs as at
31.3.2013 and has hot incurred cash loss during the financial year
covered by our audit and a cash loss of Rs.229.10 lac 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 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 Corporate Term Loan of Rs.. 300.00 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 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 been noticed or reported
during the year that causes the financial statements to be materially
for M/s Krishnan and Raman
Chartered Accountants FRN01515S
Place : Tirunelvel CA. K.V.Raman
Date : 29-05-2013 M.No. 009790