We have audited the attached Balance Sheet of M/S.THAMBBI MODERN
SPINNING MILLS LIMITED, for the year ended 31st March 2012 and the
Profit and Loss Account and also the cash flow statement of the Company
for the year ended on that date, annexed thereto. 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.
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 from material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
As required by the Companies (Auditor''s Report) Order, 2003, 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
Further to our comments in the Annexure referred to above. We report
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 the
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 & Loss account and Cash
Flow Statement comply with the Accounting Standards referred to in
subsection 3C of section 211 of the Companies Act, 1956.
e. There are no observations/comments which has adverse effect on the
functioning of the company.
f. In our opinion and according to the information and explanations
given to us the Directors of this company are not disqualified from
being appointed as director under clause (g) of sub section (1) of
section 274 of the Companies Act 1956.
g. In our opinion and to the best of our information and according to
the explanations given to us, the accounts read with the Notes thereon
and subject to
I. Note No.5.1 regarding amount due to SSI Units exceeding 1 lakh for
more than 30 days.
II. Note No.5.2 with regard to non-ascertainment of overdue amount as
on 31.3.2012 and non-provision of interest to Micro, Small & Medium
Enterprises for the year ended 31.3.2012.
III. Non-provision of liability towards Electricity Tax of Rs.30.11
lakhs (Refer Note No.5.3).
Give the information required by the Companies Act, 1956 in the manner
so required and give a true and fair view :
I) In the case of the Balance Sheet , of the state of affairs of the
Company as at 31st March 2012
II) In the case of the Profit and Loss Account, of the LOSS for the
year ended 31st March 2012
III) In the case of Cash Flow Statement, of the cash flow for the year
ended 31 st March 2012.
ANNEXURE TO THE AUDITORS REPORT
i) a) In our opinion, the company is maintaining proper records to show
full particulars including quantitative details and situation of Fixed
b) These fixed assets have been physically verified by the management
during the year at reasonable intervals and no material discrepancies
were noticed in such verification.
c) During the year the company had disposed-off land measuring 34400
sq.ft for Rs.34.45 lakhs and also certain old machinery for Rs.82.79
ii) a) Inventories have been physically verified by the Management, at
b) In our opinion, 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 is maintaining proper records of inventory and no
material discrepancies were noticed on such verification as compared to
the book records.
iii) The company has not taken / granted any loans, secured or
unsecured from / to companies, firms or other parties listed in the
register maintained under Section 301 of the Companies Act 1956.
iv) In our opinion, there is an adequate Internal Control System
commensurate with the size of the company and nature of business for
the purchase of inventory and fixed assets and for the sale of goods
and services. During the course of our audit no major weakness has been
noticed in the internal system.
v) a) In our opinion, and according to the information and explanations
provided to us, there are no contracts or arrangements, that need to be
entered in the register maintained under section 301 of the Companies
b) In our opinion, and according to the information and explanations
given to us, the Company has not sold goods, materials and services
exceeding Rs.5,00,000 to any party listed in the register maintained
under section 301 of the Companies Act, 1956.
vi) The Company has not accepted any deposits from Public during the
year and hence the clause relating to acceptance of Fixed Deposits is
vii) In our opinion, the Company has an adequate Internal Audit System
commensurate with its size and nature of business.
viii) As per the information and explanations furnished to us, the
company has maintained the cost records as prescribed by the Central
Government under Sec.209 (1) (d) of the Companies act, 1956.
ix)a) In our opinion and according to the information and explanations
provided to us, there are no undisputed statutory dues as at
31.03.2012, outstanding for a period exceeding 6 months from the date
they became payable.
b) As per the information and explanations provided to us there are no
disputed statutory dues outstanding as on 31.03.12, except towards
i. entry tax on car purchase of Rs.4.65 lakhs pending before the High
Court of Chennai.
ii. Electricity Tax of Rs.30.11 lakhs which is pending for filing writ
petition before the High Court of Chennai.
x) As on 31.03.2012 the accumulated loss is more than Equity plus
Reserves. The company has also incurred cash loss during the year and
not incurred cash loss during the previous Financial Year.
xi) Company has taken Term Loan from a Bank and has not defaulted in
repayment of dues during the Financial Year. The company has no
xii) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities
during the year.
xiii) The Company is not a Chit, Nidhi / Mutual Benefit Fund/Society.
xiv) The Company is not dealing or trading in shares, securities,
debentures and other investments.
xv) In our opinion, the company has not given guarantees for loans
taken by others from banks or financial institutions.
xvi) The company has borrowed term loan during the year and utilized
the same for the purpose for which it is obtained.
xvii) On an overall examination of the financial statements of the
company, we report that no funds raised on short term basis have been
used for long term investment.
xviii) There has been no preferential allotment of shares by the
company during the year, to any party.
xix) The company has not issued any debentures, during the year.
xx) The company has not raised any money by public issue of shares or
other securities during the year.
xxi) According to the information and explanations given to us, no
frauds on or by the company has been noticed or reported during the
For SANKARAN & KRISHNAN
Firm Registration No: 003582S
30th May 2012 Membership No. 16271