We have audited the accompanying financial statements of Sri
Ramakrishna Mills (Coimbatore) Limited (the Company''), which
comprise the Balance Sheet as at 31st March 2015, 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 Company''s Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 (the Act)
with respect to the preparation and presentation 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 principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules,2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
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 have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under
the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. 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 the 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 financial control relevant
to the Company''s preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of
expressing an opinion on whether the Company has in place an adequate
internal financial controls system over financial reporting and the
operating effectiveness of such controls. An audit also includes
evaluating the appropriateness of the accounting policies used and the
reasonableness of the accounting estimates made by the Company''s
Directors, 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 on the financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid 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, of the state of affairs of the Company as
at 31st March 2015 and its Loss and its cash flows for the year ended
on that date.
Emphasis of Matters
The Company being an ineligible company to retain deposits including
loans ought to have repaid all the deposits and loans before 31st
March 2015. However, in respect of 8 parties, the Company is yet to
repay loans to the extent of Rs 2,57,37,284/-.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2015
(the Order) issued by the Central Government of India in terms
of sub-section (11) of section 143 of the Act, we give in the Annexure
a statement on the matters specified in the paragraph 3 and 4 of the
Order, to the extent applicable.
2. As required by Section 143 (3) of the Act, we report that:
a) We have sought and 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 have been
kept by the Company so far as it appears from our examination of those
books;
c) The Balance Sheet, the Statement of Profit and Loss and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account;
d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014;
e) On the basis of the written representations received from the
directors as on 31 March 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31 March 2015
from being appointed as a director in terms of Section 164 (2) of the
Act; and
f) With respect to the other matters to be included in the Auditor''s
Report in accordance with Rule 11 of the Companies (Audit and
Auditors) Rules, 2014, in our opinion and to the best of our
information and according to the explanations given to us:
i) The Company has disclosed its pending litigations under note no 2
in additional disclosure- Note 27.
ii) The Company does not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses
iii) Transferring of amount to the Investor Education and Protection
Fund does not arise as the Company has not declared any dividend in
the earlier years.
Annexure to the Independent Auditors'' Report
The Annexure referred to in our Independent Auditors'' Report to the
members of the Company on the financial statements for the year ended
31st March 2015, we report that:
1 a The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b The company has physically verified fixed assets during the year in
accordance with a regular and phased programme of verification, which
in our opinion provides for physical verification of all the fixed
assets at reasonable intervals having regard to the size of the
company and nature of its assets. According to the information and
explanations given to us no material discrepancies were noticed on
such verification.
2 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 In our
opinion and according to the information and explanations given to us,
the company has maintained proper records of its inventories and no
material discrepancies were noticed on physical verification as
compared to the book records.
3 The company, during the year, has not granted any loan, secured or
unsecured to companies, firms or other parties covered in the register
maintained under section 189 of the Companies Act, 2013, during the
financial year. Hence, Clause (b) and (c) is not applicable.
4 In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the company and nature of its business for the
purchase of inventory, fixed assets and also for the sale of goods and
services. We have not observed any major weaknesses in internal
control systems during the course of our audit.
5 The Company being an ineligible Company to retain deposits and loans
ought to have repaid all fixed deposits and loans before 31st March
2015. Although the Company repaid all the fixed deposits before 31st
March 2015, yet has not repaid 8 loans to the extent of Rs
2,57,37,284/-.
6 We have broadly reviewed the cost records maintained by the company
specified by the Central Government under sub-section (1) of Section
148 of the Companies Act, 2013, as applicable to the company, and are
of the opinion that prima facie the specified cost records have been
maintained. We have, however, not made a detailed examination of the
cost records with a view to determine whether they are accurate or
complete.
7 a According to the information and explanations given to us and on
the basis of our examination of the records of the Company, subject to
(ii) stated below, amounts deducted/ accrued in the books of account
in respect of undisputed statutory dues including provident fund,
income tax, sales tax, wealth tax, service tax, duty of customs, value
added tax, cess and other material statutory dues have been regularly
deposited during the year by the Company with the appropriate
authorities. As explained to us, the Company did not have any dues on
account of employees'' state insurance and duty of excise.
According to the information and explanation given to us, the
undisputed arrears of statutory dues which were outstanding as at 31st
March 2015 for a period of more than Six months from the date they
became payable are as follows:
Nature of Statute Amount Year to which it relates
Income tax 17 13 585 A.Y 2010-11
b According to the information and explanations given to us, the
statutory dues which have not been deposited on account of dispute are
as follows:
Name of the Nature of the Dues Amount [Rs.]
Statute (in lakhs)
TNGST Addl. Sales tax 7.43
TNGST Sales tax 54.59
TNGST Sales tax 89.37
TNGST* Sales Tax 61.66*
TNGST TNGST, AST 121.97
Customs Customs duty on Cotton 8.26
APEB Fuel Surcharge adjustment 3.20
Name of the Period to which the amount Forum where dispute is
Statue relates pending
TNGST A.Y2004-05 to A.Y.2006-07 Madras High Court
TNGST A.Y.1995-96 Madras High Court
TNGST A.Y.1999-00 Madras High Court
TNGST* A.Y.1998-99 Madras High Court
TNGST A.Y.2000-01 Madras High Court
Customs A.Y.2003-04 Madras High Court
APEB July 2012 and November 2012 AP High Court
* [Rs.31 lakhs, since paid]
c Transferring of amount to the Investor Education and Protection Fund
does not arise as the Company has not declared any dividend in the
earlier years.
8 The Company has accumulated losses amounting to Rs. 13,50,08,056/-
as at 31st March 2015. The Company has incurred cash losses during the
financial year covered by our audit and in the immediately preceding
financial year.
9 In our opinion and according to the information and explanation
given to us, the company has not defaulted in repayment of dues to any
of the banks.
10 According to the information and explanations given to us the
company has not given any guarantee for loans taken by others from
banks or financial institutions.
11 In our opinion, and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purposes for which they were obtained.
12 To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the
company was noticed or reported during the year that causes the
financial statements to be materially misstated.
For M.S. Jagannathan and Visvanathan
Chartered Accountants
Firm Regd No: 001209 S
M.V. JEGANATHAN
Place: Coimbatore Partner
Date : 28-05-2015 M. No. 214178
