Report on the Financial Statements
We have audited the accompanying financial statements of M/s MARIS
SPINNERS LIMITED, (''the Company'') No 11, Cathedral Road, Chennai - 600
086 at 31st March 2013, which comprise the Balance Sheet as at March
31, 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
The 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 fair presentation of the financial statements
that are free from material misstatement, whether due to fraud or
Our responsibility is to express an opinion on these financial
statements based on our audit. We have conducted our audit in
accordance with the Standards on Auditing issued by the Institute of
Chartered Accountants of India. These 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
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our qualified audit opinion.
Basis for Qualified Opinion
The balances of trade receivables, trade payables, advances paid to
trade creditors, advances received from customers are subject to
confirmation as mentioned in Note No. 1(H). The balances of such
parties are subject to reconciliation of differences, if any.
The Management have sent letters of Confirmations to various parties
who are classified as Sundry Debtors and Creditors and to parties from
whom Trade advances have been received and to whom Trade advances are
Some of the Parties to whom such confirmation letters have been sent
have responded pursuant to which their accounts have been reconciled.
As all the Parties to whom the letters have been sent have not
responded due to which their accounts could not be reconciled, the same
cannot be treated as confirmed, although in the opinion of Management
the balances of such Parties are in order.
As some of the parties to whom letters have been sent have not
responded, their account balances could not be verified and to that
extent, differences if any could not be ascertained.
With regard to the provision for Leave Encashment as mentioned in Note
No. 1 (A) (viii) B (iii), the Management has been consistently
following the policy of accounting for the same on the basis of the
calendar year with respect to the liability of the workers and on the
basis of the financial year with respect to the staff at both units
which is strictly not in accordance with the requirement of Accounting
Standard 15 issued by ICAI and the preparation of accounts on accrual
The effect of not providing for the leave encashment on accrual basis
based on the financial year for the workers is not material and cannot
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph, the financial
statements, along with notes accompanying such 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 March 31, 2013;
b) in the case of the Statement of Profit and Loss, 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. Report on Other Legal and Regulatory
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 (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 under provisions of section 227(3) of the Companies
Act, 1956, 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
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 the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956 except for
Accounting Standard 15 with regard to provision of liability towards
e) on the basis of written representations received from the Directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors are disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Act.
f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
ANNEXURE TO AUDITORS'' REPORT
Statement of matters to be reported as specified in Paragraphs 4 and 5
of COMPANY''S (AUDITORS'' REPORT) ORDER, 2003
i. a. The Company is maintaining proper records showing full
particulars including quantitative details and situation of its fixed
b. According to the information and explanations given to us, physical
verification of Fixed Assets have been carried out by the management at
reasonable intervals and no material discrepancies have been noticed on
c. As the Company has not disposed off substantial part of its fixed
assets, reporting under Para 4(i)(c) of the Order does not arise.
ii. a. As per the information and explanation given to us, the
management has conducted physical verification of inventory at
reasonable intervals during the year.
b. As per the information and explanation given to us and in our
opinion, the procedures of physical verification of inventory followed
by the management are reasonable and commensurate with the size of the
Company and the nature of its business.
c. The Company is maintaining proper records of inventory and as per
the information and explanation given to us and based on our
observation no material difference was noticed during the year.
iii. 1. In respect of the 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 granted/ received unsecured loan during the
financial year to the following parties covered in the register to be
maintained under section 301 of the Companies Act, 1956.
iv. There is an adequate internal control procedure commensurate with
the size of the Company and the nature of its business, with regard to
the purchase of inventory and fixed assets and for the sale of goods.
Further, on the basis of our examination of the books and records of
the Company, and according to the information and explanation given to
us we have neither come across nor have we been informed of any
continuing failure to correct weaknesses in the aforesaid internal
v. a. All the transactions that need to be entered into a register in
pursuance of Section 301 of the Act have been entered. b. In our
opinion the prices at which such transactions have been entered into
are reasonable having regard to the prevailing market prices for such
vi. The Company has not accepted any deposits from the public within
the meaning of Section 58A and 58AA of the Companies Act 1956 and the
rules framed thereunder, and hence reporting under Clause 4(vi) of the
Order does not arise.
vii. According to the information made available and explanation given
to us and in our opinion, the Company''s present internal audit system
is commensurate with its size and nature of its business.
viii. We have 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 opinion that prima-facie the prescribed accounts
and records have been maintained. However, we have not made a detailed
examination of the records with a view to determining whether they are
accurate or complete.
ix. According to the books of accounts and other records as produced
before us and examined by us, the Company is regular in depositing
undisputed statutory dues including provident fund, investor education
and protection fund, employee''s state insurance, Income-tax, custom
duty, cess and any other statutory dues except for marginal delays in a
few cases except in the case of wealth tax where payment is yet to be
x. The accumulated losses of the Company at the end of the financial
year does not exceed 50% of its net worth. The company has not
suffered cash losses during the present financial year but had suffered
cash losses in the immediately preceding financial year.
xi. According to the records made available to us, the Company has not
defaulted in repayment of its dues to any financial institutions or
banks and hence reporting under Clause 4(xi) does not arise
xii. The Company has not granted loans and advances on the basis of
the security by way of pledge of shares, debentures and other
securities and hence reporting under Clause 4(xii) of the order does
xiii. In our opinion, considering the nature of activities carried on
by the Company during the year, the provisions of any special statute
applicable to chit fund / nidhi / mutual benefit fund/ societies are
not applicable to it, hence reporting under Clause 4(xiii) of the order
does not arise.
xiv. The Company is not dealing or trading in shares, securities,
debentures and other investments, hence reporting under Clause 4(xiv)
of the order does not arise
xv. According to the information made available and explanation given
to us and in our opinion, the Company has not given any guarantee for
Joans taken by others from banks or financial institutions, and
therefore reporting under Clause 4(xv) of the order does not arise.
xvi. The Company has obtained term loans under the Textile Upgradation
Fund scheme from the Indian Overseas Bank, Indian Bank and Karur Vysya
Bank. On the basis of review of utilization of funds pertaining to the
term loans on an overall basis and related information made available
to us, the term loans taken by the Company have been primarily applied
for the purposes for which they were obtained.
xvii. According to the information made available and records produced
before us and in our opinion, the Company has used the short-term funds
obtained by it primarily only for the purpose of meeting its working
capital requirements. However it is not possible to ascertain with
reasonable accuracy as to whether such short-term funds were also used
for long-term purposes.
xviii. The Company has not made any preferential allotment of shares to
parties and companies covered in the Register maintained under Section
301 of the Act. Hence reporting under Clause 4(xviii) of the order does
ix. The Company has not issued any debentures and hence reporting
under Clause (xix) of the order does not arise.
xx. The Company has not raised any money by way of public issue during
the financial year under reporting and hence reporting under Clause
4(xx) does not arise.
xxi. According to the information made available to us and
explanations given to us, no fraud on or by the Company has been
noticed or reported during the year.
For N.C.S. RAGHAVAN & CO.
(Firm Registration No.: 007335S)
N.C. SUNDARA RAGHAVAN
Place : Bangalore PARTNER
Date : 30.05.2013 (Membership No. 5952)