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Auditor Report of Rajapalayam Mills Ltd.
Mar 31, 2025
We have audited the Separate Financial Statements of RAJAPALAYAM MILLS LIMITED
("the Company"), which comprise the Separate Balance Sheet as at March 31, 2025, and the
Separate Statement of Profit and Loss, the Separate Statement of changes in Equity and the
Separate Statement of cash flows for the year ended on that date, and notes to the Separate
Financial Statements, including a summary of material accounting policies and other explanatory
information (hereinafter referred to as "the Separate Financial Statements")
In our opinion and to the best of our information and according to the explanations given to us,
the aforesaid Separate Financial Statements give the information required by the Companies Act,
2013 (''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
March 31, 2025, and the loss and total comprehensive loss, changes in equity and its cash flows
for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under
Section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further
described in the Auditor''s Responsibilities for the Audit of the Separate Financial Statements
section of our report. We are independent of the Company in accordance with the Code of Ethics
issued by the Institute of Chartered Accountants of India together with the ethical requirements that
are relevant to our audit of the Separate Financial Statements under the provisions of the Companies
Act, 2013 and the Rules there under, and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the Code of Ethics. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance
in our audit of the Separate Financial Statements of the current period. These matters were
addressed in the context of our audit of the Separate Financial Statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters. We have
determined the matters described below to be the key audit matters to be communicated in our
report.
|
S.No. |
Key Audit Matter |
Auditors'' Response |
|
1 |
Recognition and measurement of deferred The recognition and measurement of Assessment of Deferred Tax Assets is done We have considered the assessment of (Refer to Note No. 5C (iii), (iv), (v) & 6(iv) |
Principal Audit Procedures The key matter was addressed by performing Furthermore we assessed the adequacy and |
|
2 |
Evaluation of uncertain Tax Position / The Company has material uncertain tax (Refer to Note No. 45 to the Separate |
Principal Audit Procedures The Audit addressed this Key Audit Matter We reviewed the significant litigations and We also reviewed the relevant judgments Furthermore we assessed the adequacy and |
|
S.No. |
Key Audit Matter |
Auditors'' Response |
|
3 |
Existence and impairment of Trade Trade Receivables are significant to the (Refer to Note no. 17 to the Separate |
Principal Audit Procedures We performed audit procedures on the We also reviewed the system of obtaining Furthermore we assessed the adequacy and |
|
4 |
Evaluation of Carrying value of The Company has Non-Current Investments |
Principal Audit Procedures We examined the policies and We evaluated the assessment techniques |
|
S.No. |
Key Audit Matter |
Auditors'' Response |
|
less any impairment. These investments are |
to assess the future prospect of the investee We examined the report furnished to us by We reviewed and compared the estimates |
Information other than the Separate Financial Statements and Auditors'' Report thereon
The Company''s Management and Board of Directors are responsible for the other information.
The other information comprises the information included in the Company''s annual report, Board''s
Report including Annexure to Board''s Report, Corporate Governance and Report on CSR activities,
and Shareholders information but does not include the Separate Financial Statements and our
auditors'' report thereon.
Our opinion on the Separate Financial Statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the Separate Financial Statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the Separate Financial Statements or our knowledge obtained during the course of our audit
or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact. We have nothing to report in this regard.
Management''s Responsibility for the Separate Financial Statements
The Company''s Management and Board of Directors are responsible for the matters stated in
Section 134(5) of the Act with respect to the preparation of these Separate Financial Statements
that give a true and fair view of the financial position, financial performance including other
comprehensive income, changes in equity and cash flows of the Company in accordance with the
Indian Accounting Standards (Ind AS) prescribed under Section 133 of Companies Act, 2013 read
with relevant rules issued there under and accounting principles generally accepted in India. This
responsibility also includes maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of 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 Separate Financial Statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
In preparing the Separate Financial Statements, Management and Board of Directors are responsible
for assessing the Company''s ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting
process.
Auditors'' Responsibilities for the Audit of the Separate Financial Statements
Our objectives are to obtain reasonable assurance about whether the Separate Financial Statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditors'' report that includes our opinion. Reasonable assurance is a high level of assurance, but
is not a guarantee that an audit conducted in accordance with SAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these Separate Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the Separate Financial Statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
⢠Obtain an understanding of internal controls relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under Section 143(3)(i) of the Companies Act, 2013,
we are also responsible for expressing our opinion on whether the company has adequate internal
financial controls with reference to Separate Financial Statements in place and the operating
effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company''s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditors'' report to the related disclosures in the Separate Financial Statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditors'' report. However, future events or conditions may cause the Company
to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Separate Financial Statements,
including the disclosures, and whether the Separate Financial Statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Separate Financial Statements that, individually or
in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of
the Separate Financial Statements may be influenced. We consider quantitative materiality and qualitative
factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to
evaluate the effect of any identified misstatements in the Separate Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the Separate Financial Statements of the current period and
are therefore the key audit matters. We describe these matters in our auditors'' report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central
Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we
give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
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 Separate Balance Sheet, the Separate Statement of Profit and Loss including Other
Comprehensive Income, the Separate Statement of changes in equity and the Separate
statement of Cash Flow dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid Separate Financial Statements comply with the Indian 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 March 31, 2025
taken on record by the Board of Directors, none of the directors is disqualified as on
March 31, 2025 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the
Company and the operating effectiveness of such controls, refer to our Separate Report in
Annexure B. Our report expresses an unmodified opinion on the adequacy and operating
effectiveness of the company''s internal financial control over financial reporting.
(g) With respect to the other matters to be included in the Auditors'' Report in accordance with the
requirements of Section 197(16) of the Act, as amended.
In our opinion and to the best of our information and according to the explanations given to
us, the remuneration paid by the Company to its directors during the year is in accordance
with the provisions of Section 197 of the Act.
(h) With respect to the other matters to be included in the Auditors'' 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 the details of the pending litigations and its impact on the
financial position in its Separate Financial Statements have been disclosed in Note No.
45 of the Disclosures forming part of the Separate Financial Statements for the year
ended March 31, 2025;
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the
Investor Education and Protection Fund by the Company.
iv. (a) The Management has represented that, to the best of its knowledge and belief, no
funds have been advanced or loaned or invested (either from borrowed funds or
share premium or any other sources or kind of funds) by the Company to or in any
other persons or entities, including foreign entities ("Intermediaries"), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall,
directly or indirectly lend or invest in other persons or entities identified in any
manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The Management has represented that, to the best of its knowledge and belief, no
funds have been received by the Company from any persons or entities, including
foreign entities ("Funding Parties"), with the understanding, whether recorded in
writing or otherwise, that the Company shall directly or indirectly, lend or invest in
other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries")
by or on behalf of the Funding Parties or provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures performed that have been considered reasonable and
appropriate in the circumstances, nothing has come to our notice that has caused us
to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) of
Companies (Audit and Auditors) Rules, 2014, as provide under (a) and (b) above,
contain any material mis-statement.
v. The dividend proposed in the previous year, declared and paid by the Company during
the year is in accordance with Section 123 of the Act.
As stated in Note No. 57 to the Separate Financial Statements, the Board of Directors of
the Company have proposed dividend for the year which is subject to the approval of the
members at the ensuing Annual General Meeting. The amount of dividend proposed is
in accordance with Section 123 of the Act.
vi. Based on our examination, which included test checks, the company has used accounting
software for maintaining its books of account for the financial year ended March 31, 2025
which has a feature of recording audit trail (edit log) facility and the same has operated
throughout the year for all relevant transactions recorded in the software. Further, during
the course of audit, we did not come across any instance of the audit trail feature being
tampered with and the audit trail has been preserved by the Company as per the statutory
requirements for record retention.
For N.A. JAYARAMAN & CO For SRSV & ASSOCIATES,
Chartered Accountants Chartered Accountants
Firm Registration No. 001310S Firm Registration No. 015041S
T.G HARISHA V. RAJESWARAN
Partner Partner
Membership No. 246983 Membership No. 020881
UDIN: 25246983BMOKNM2395 UDIN: 25020881BMKQGX7275
Rajapalayam Chennai
28th May, 2025 28th May, 2025
Mar 31, 2024
M/s. RAJAPALAYAM MILLS LIMITED
Report on the Audit of the Separate Financial Statements
Opinion
We have audited the Separate Financial Statements of RAJAPALAYAM MILLS LIMITED ("the Company"), which comprise the Separate Balance Sheet as at March 31, 2024, and the Separate Statement of Profit and Loss, the Separate Statement of changes in Equity and the Separate Statement of cash flows for the year ended on that date, and notes to the Separate Financial Statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the Separate Financial Statements")
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Separate Financial Statements give the information required by the Companies Act, 2013 (''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 March 31, 2024, and the profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Separate Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Separate Financial Statements under the provisions of the Companies Act, 2013 and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Separate Financial Statements of the current period. These matters were addressed in the context of our audit of the Separate Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
|
S.No. |
Key Audit Matter |
Auditors'' Response |
|
1 |
Recognition and measurement of deferred taxes The recognition and measurement of deferred tax items requires determination of differences between the recognition and the measurement of assets, liabilities, income and expenses in accordance with the Income Tax Act and other applicable tax laws including application of ICDS and financial reporting in accordance with Ind AS. Assessment of Deferred Tax Assets is done by the management at the close of each financial year taking into account forecasts of future taxable results. We have considered the assessment of deferred tax liabilities and assets as a key matter due to the importance of management''s estimation and judgment and the materiality of amounts. (Refer to Note No. 5C (iii), (iv), (v) & 6(iv) to the Separate Financial Statements) |
Principal Audit Procedures The key matter was addressed by performing audit procedures which involved assessment of underlying process and evaluation of internal financial controls with respect to measurement of deferred tax and re-performance of calculations and assessment of the items leading to recognition of deferred tax in light of prevailing tax laws and applicable financial reporting standards. Furthermore we assessed the adequacy and appropriateness of the disclosures in the Separate Financial Statements |
|
2 |
Evaluation of uncertain Tax Position / Other contingent liabilities The Company has material uncertain tax position in respect of possible or actual taxation disputes, litigations and claims. The provisions are estimated using a significant degree of management judgment in interpreting the various relevant rules, regulations and practices and in considering precedents in various legal forums. (Refer to Note No. 45 to the Separate Financial Statements) |
Principal Audit Procedures The Audit addressed this Key Audit Matter by assessing the adequacy of tax Provisions by reviewing the management''s underlying assumptions in estimating the tax provisions and the possible outcome of the disputes. We reviewed the significant litigations and claims and discussed with the Company''s legal counsel, external advisors about their views regarding the likely outcome and magnitude of and exposure to relevant litigation and claims. We also reviewed to relevant judgments and the opinions given by the company''s advisers, which were relied on by the management for such claims. Furthermore we assessed the adequacy and appropriateness of the disclosures in the Separate Financial Statements. |
|
S.No. |
Key Audit Matter |
Auditors'' Response |
|
3 |
Existence and impairment of Trade Receivables Trade Receivables are significant to the Company''s financial statements. The Collectability of trade receivables is a key element of the company''s working capital management, which is managed on an ongoing basis by its management. Due to the nature of the Business and the requirements of customers, various contract terms are in place, there is a risk that the carrying values may not reflective of their recoverable amounts as at the reporting date, which would require an impairment provision. Where there are indicators of impairment, the company undertakes assessment of the recoverability of the amounts. Given the magnitude and inherent uncertainty involved in the judgment, involved in estimating impairment assessment of trade receivables, we have identified this as a key audit matter. (Refer to Note no. 17 to the Separate Financial Statements) |
Principal Audit Procedures We performed audit procedures on the assessment of trade receivables, which included substantive testing of revenue transactions, obtaining trade receivable external confirmations and testing the subsequent payments received. Assessing the impact of impairment on trade receivables requires judgment and we evaluated management''s assumptions in determining the provision for impairment of trade receivables, by analyzing the ageing of receivables, assessing significant overdue individual trade receivables and specific local risks, combined with the legal documentations, where applicable. We also reviewed the system of obtaining periodical confirmation from the customers, which are kept in electronic mode by the company. We tested the timing of revenue and trade receivables recognition based on the terms agreed with the customers. We also reviewed, on a sample basis, terms of the contract with the customers, invoices raised, etc., as a part of our audit procedures. Furthermore we assessed the adequacy and appropriateness of the disclosures in the Separate Financial Statements. |
|
4 |
Evaluation of Carrying value of Non-Current Investments The Company has Non-Current Investments in listed and unlisted associates and other companies, amounting to $ 11,721.86 lakhs as at 31st March 2024 which is 6.91% of the total value of assets of the company. The Company''s investments are valued at Cost |
Principal Audit Procedures We examined the policies and methodologies used by the management to estimate the carrying value of each investment. We evaluated the assessment techniques for forecasting the future cash flows and revenue estimates used by the management |
|
S.No. |
Key Audit Matter |
Auditors'' Response |
|
less any impairment. These investments are assessed for impairment when an indicator of impairment exists. The management assess annually the existence of impairment indicators of each investment and made necessary changes in the value of such investment as on Balance Sheet date. The processes and methodologies for valuation and identification of impairment in the value of investments of unlisted companies requires application of significant judgment by the Company. The judgment has to be made with respect to the timing, quantity and estimation of future discounted cash flows of the unlisted entities. It involves significant estimates and judgment by the management because of the inherent uncertainty involved in forecasting the investee''s future performance and discounting future cash flows. We consider the valuation and assessment of impairment in value of such investments to be significant to the audit, because of the materiality of the value of investments in the separate financial statements of the Company and estimates and judgments involved in assessing the various unobservable valuation inputs like estimating the future cash flows. Accordingly, the valuation and assessment of impairment value in such investments of unlisted entities is determined to be key audit matter in our audit of the separate financial statements |
to assess the future prospect of the investee companies. We examined the report furnished to us by the management for the valuation of the business to assess the investment value in Companies. We reviewed and compared the estimates made by the management with the externally available industry data. |
Information Other than the Separate Financial Statements and Auditors'' Report Thereon
The Company''s Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, Board''s Report including Annexure to Board''s Report, Corporate Governance and Report on CSR activities, and Shareholders information but does not include the Separate Financial Statements and our auditors'' report thereon.
Our opinion on the Separate Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Separate Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Separate Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Management''s Responsibility for the Separate Financial Statements
The Company''s Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these Separate Financial Statements that give a true and fair view of the state of affairs, profit or loss including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of Companies Act, 2013 read with relevant rules issued there under and accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 Separate Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Separate Financial Statements, Management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Separate Financial Statements
Our objectives are to obtain reasonable assurance about whether the Separate Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors'' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Separate Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the Separate Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to Separate Financial Statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors'' report to the related disclosures in the Separate Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors'' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Separate Financial Statements, including the disclosures, and whether the Separate Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Separate Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Separate Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Separate Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Separate Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditors'' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Companies Act, 2013, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
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 Separate Balance Sheet, the Separate Statement of Profit and Loss including Other Comprehensive Income, the Separate Statement of changes in equity and the Separate statement of Cash Flow dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid Separate Financial Statements comply with the Indian 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 March 31,2024 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2024 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our Separate Report in Annexure B. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the company''s internal financial control over financial reporting.
(g) With respect to the other matters to be included in the Auditors'' Report in accordance with the requirements of Section 197(16) of the Act, as amended.
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of Section 197 of the Act.
(h) With respect to the other matters to be included in the Auditors'' 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 the details of the pending litigations and its impact on the financial position in its Separate Financial Statements in Note No. 45 of the Disclosures forming part of the Separate Financial Statements for the year ended March 31, 2024;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. (a) The Management has represented that, to the best of its knowledge and belief, no
funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The Management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Parties or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) of Companies (Audit and Auditors) Rules, 2014, as provide under (a) and (b) above, contain any material mis-statement.
v. The dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with Section 123 of the Act.
As stated in Note No. 57 to the Separate Financial Statements, the Board of Directors of the Company have proposed dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with Section 123 of the Act.
vi. Based on our examination, which included test checks, the company has used accounting software for maintaining its books of account for the financial year ended March 31, 2024 which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of audit, we did not come across any instance of the audit trail feature being tampered with.
As Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1,2023, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per statutory requirements for record retention is not applicable for the financial year ended March 31, 2024.
For N.A. JAYARAMAN & CO For SRSV & ASSOCIATES,
Chartered Accountants Chartered Accountants
Firm Registration No. 001310S Firm Registration No. 015041S
R. PALANIAPPAN P. SANTHANAM
Partner Partner
Membership No. 205112 Membership No. 018697
UDIN: 24205112BKEZKB5679 UDIN: 24018697BKHIRU4576
RAJAPALAYAM 29th May, 2024
Mar 31, 2023
M/s. RAJAPALAYAM MILLS LIMITED
Report on the Audit of the Separate Financial Statements
Opinion
We have audited the Separate Financial Statements of RAJAPALAYAM MILLS LIMITED ("the Company"), which comprise the Separate Balance Sheet as at March 31, 2023, and the Separate Statement of Profit and Loss, the Separate Statement of changes in Equity and the Separate Statement of cash flows for the year ended on that date, and notes to the Separate Financial Statements, including a summary of significant accounting policies and other explanatory information (herein after referred to as "the Separate Financial Statements")
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Separate Financial Statements give the information required by the Companies Act 2013 (''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 March 31, 2023, and the profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Separate Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the Separate Financial Statements under the provisions of the Companies Act, 2013 and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Separate Financial Statements of the current period. These matters were addressed in the context of our audit of the Separate Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
|
S.No. |
Key Audit Matter |
Auditor''s Response |
|
1 |
Recognition and measurement of deferred taxes The recognition and measurement of deferred tax items requires determination of differences between the recognition and the measurement of assets, liabilities, income and expenses in accordance with the Income Tax Act and other applicable tax laws including application of ICDS and financial reporting in accordance with Ind AS. Assessment of Deferred Tax Assets is done by the management at the close of each financial year taking into account forecasts of future taxable results. We have considered the assessment of deferred tax liabilities and assets as a key matter due to the importance of management''s estimation and judgment and the materiality of amounts. (Refer to Note No. 5D(iv), (v), (vi) & 7(iv) to the Separate Financial Statements) |
Principal Audit Procedures The key matter was addressed by performing audit procedures which involved assessment of underlying process and evaluation of internal financial controls with respect to measurement of deferred tax and reperformance of calculations and assessment of the items leading to recognition of deferred tax in light of prevailing tax laws and applicable financial reporting standards. Furthermore we assessed the adequacy and appropriateness of the disclosures in the separate financial statements. |
|
2 |
Evaluation of uncertain Tax Position/ Other contingent liabilities The Company has material uncertain tax position in respect of possible or actual taxation disputes, litigations and claims. The provisions are estimated using a significant degree of management judgment in interpreting the various relevant rules, regulations and practices and in considering precedents in various legal forums. (Refer to Note No. 45 to the Separate Financial Statements) |
Principal Audit Procedures The Audit addressed this Key Audit Matter by assessing the adequacy of tax Provisions by reviewing the management''s underlying assumptions in estimating the tax provisions and the possible outcome of the disputes. We reviewed the significant litigations and claims and discussed with the Company''s legal counsel, external advisors about their views regarding the likely outcome and magnitude of and exposure to relevant litigation and claims. We also reviewed to relevant judgments and the opinions given by the company''s advisers, which were relied on by the management for such claims. Furthermore we assessed the adequacy and appropriateness of the disclosures in the separate financial statements. |
|
S.No. |
Key Audit Matter |
Auditor''s Response |
|
3 |
Existence and impairment of Trade Receivables Trade Receivables are significant to the Company''s financial statements. The Collectability of trade receivables is a key element of the company''s working capital management, which is managed on an ongoing basis by its management. Due to the nature of the Business and the requirements of customers, various contract terms are in place, there is a risk that the carrying values may not reflective of their recoverable amounts as at the reporting date, which would require an impairment provision. Where there are indicators of impairment, the company undertakes assessment of the recoverability of the amounts. Given the magnitude and inherent uncertainty involved in the judgment, involved in estimating impairment assessment of trade receivables, we have identified this as a key audit matter. (Refer to Note no. 18 to the Separate Financial Statements) |
Principal Audit Procedures We performed audit procedures on the assessment of trade receivables, which included substantive testing of revenue transactions, obtaining trade receivable external confirmations and testing the subsequent payments received. Assessing the impact of impairment on trade receivables requires judgment and we evaluated management''s assumptions in determining the provision for impairment of trade receivables, by analyzing the ageing of receivables, assessing significant overdue individual trade receivables and specific local risks, combined with the legal documentations, where applicable. We also reviewed the system of obtaining periodical confirmation from the customers. We tested the timing of revenue and trade receivables recognition based on the terms agreed with the customers. We also reviewed, on a sample basis, terms of the contract with the customers, invoices raised, etc., as a part of our audit procedures. Furthermore we assessed the adequacy and appropriateness of the disclosures in the separate financial statements. |
Information Other than the Separate Financial Statements and Auditors'' Report Thereon
The Company''s Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, Board''s Report including Annexure to Board''s Report, Corporate Governance and Report on CSR activities, and Share holders information but does not include the Separate Financial Statements and our auditor''s report thereon.
Our opinion on the Separate Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Separate Financial Statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Separate Financial Statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Management''s Responsibility for the Separate Financial Statements
The Company''s Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these Separate Financial Statements that give a true and fair view of the state of affairs, profit or loss including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of Companies Act, 2013, read with relevant rules issued there under and accounting principles generally accepted in India. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 Separate Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the Separate Financial Statements, Management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Separate Financial Statements
Our objectives are to obtain reasonable assurance about whether the Separate Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Separate Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the Separate Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to Separate Financial Statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the Separate Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the Separate Financial Statements, including the disclosures, and whether the Separate Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Separate Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Separate Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Separate Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Separate Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Companies Act, 2013, (herein after referred to as the âOrderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanation given to us, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
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 Separate Balance Sheet, the Separate Statement of Profit and Loss including Other Comprehensive Income, the Separate Statement of changes in equity and the Separate statement of Cash Flow dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid Separate Financial Statements comply with the Indian 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 March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our Separate Report in Annexure B. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the company''s internal financial control over financial reporting.
(g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of Section 197(16) of the Act, as amended,
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of Section 197 of the Act.
(h) 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 the details of the pending litigations and its impact on the financial position in its Separate Financial Statements have been disclosed in Note No.45 of the Disclosures forming part of the Separate Financial Statements for the year ended March 31, 2023;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. (a) The Management has represented that, to the best of its knowledge and belief, no
funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The Management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Parties or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) of Companies (Audit and Auditors) Rules, 2014, as provide under (a) and (b) above, contain any material mis-statement.
v. The dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with Section 123 of the Act.
As stated in Note No. 57 to the Separate Financial Statements, the Board of Directors of the Company have proposed dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with Section 123 of the Act.
vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023.
For N.A. JAYARAMAN & CO For SRSV & ASSOCIATES,
Chartered Accountants Chartered Accountants
Firm Registration No. 001310S Firm Registration No. 015041S
R. PALANIAPPAN P. SANTHANAM
Partner Partner
Membership No. 205112 Membership No. 018697
UDIN: 23205112BGTQVD3099 UDIN: 23018697BGVDMJ1013
Chennai,
24th May, 2023.
Mar 31, 2018
AUDITORS'' REPORT TO SHAREHOLDERS
INDEPENDENT AUDITORS'' REPORT
To the Members of M/s. Rajapalayam Mills Limited
Report on the Separate Financial Statements
We have audited the accompanying Separate financial statements drawn in accordance with the Indian Accounting Standards ("the Financial Statements"), of Rajapalayam Mills Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), Statement of Changes in Equity and the Statement of Cash Flow for the year ended on 31st March, 2018 and a summary of significant accounting policies and other explanatory information.
Management''s Responsibility for the Separate Financial Statements
Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of the Financial Statements that give a true and fair view of the financial position, Financial Performance (including Other Comprehensive Income), Changes in Equity and Cash Flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian 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 of 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 the Separate 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 thereunder. We conducted our audit of the Separate Financial Statements 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 Separate Financial Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Separate Financial Statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Separate 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 Separate Financial Statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. 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 Separate 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 Separate Financial Statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Separate 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 including the Indian Accounting Standards, of the state of affairs (financial position) of the Company as at 31st March, 2018, its Profits (financial performance including Other Comprehensive Income), Changes in Equity and its Cash Flows for the year ended on 31st March, 2018.
Other Matters
The comparative financial information of the Company for the year ended 31st March, 2017 are based on the previously issued separate financial statements jointly audited by M/s. M.S. Jagannathan & N. Krishnaswami, Chartered Accountants, and M/s. Ramakrishna Raja & Co., Chartered Accountants, the predecessor auditors whose report for the year ended 31st March, 2017 dated 25th May, 2017 expressed an unmodified opinion on those financial statements.
Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditors Report) Order, 2016 ("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", a statement on the matters specified in paragraphs 3 and 4 of the Order.
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, the Statement of Cash Flow and Statement of Changes in Equity dealt with by this report are in agreement with the books of account.
d) In our opinion, the aforesaid Separate Financial Statements comply with the Indian Accounting Standards (Ind AS) 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 31st March, 2018 and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2018 from being appointed as a Director in terms of Section 164 (2) of the Act.
f) We have enclosed our separate report in "Annexure B" with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls. Our reportexpresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.
g) 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 details of the pending litigations and its impact on the Financial Statements have been disclosed in Note No. 41 (iii) & (iv) of the ''Disclosures forming part of Separate Financial Statements'' for the year ended 31st March, 2018;
ii. The Company did not have any long-term contractsincluding derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
|
For N.A. JAYARAMAN & CO |
For SRSV & ASSOCIATES, |
|
Chartered Accountants |
Chartered Accountants |
|
Firm Registration No. 001310S |
Firm Registration No. 015041S |
|
R. PALANIAPPAN |
P. SANTHANAM |
|
Proprietor |
Partner |
|
Membership No. 205112 |
Membership No. 018697 |
|
Rajapalaiyam, 29th May, 2018. |
"ANNEXURE A" TO THE INDEPENDENT AUDITORS'' REPORT
Referred to in paragraph 1 under the heading ''Report on Other Legal & Regulatory Requirements'' of our report of even date to the Financial Statements of the Company for the year ended 31st March, 2018:
1) Fixed Assets
1.1 The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
1.2 The fixed assets were physically verified during the year by the Management in accordance with the regular programme of verification which, in our opinion, provides for physical verification of all fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed during such verification.
1.3 According to the information and explanations given to us, and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
2) Inventory
2.1 The Management has conducted the physical verification of inventory at reasonable intervals.
2.2 The discrepancies noticed on verification between the physical stocks and the book records were properly dealt with in the books of account and were not material.
3) The Company has granted loan to two parties listed in the Register maintained under Section 189 of the Act. The maximum outstanding at any time during the year was Rs. 1,256.81 Lakhs (PY: Rs. 950 Lakhs) and the amount outstanding as on 31st March, 2018 is Rs. 950 Lakhs (PY: Rs. 950 Lakhs).
3.1 In our opinion, the terms and conditions on which the loan has been granted to the parties listed in the Register maintained under Section 189 of the Act are not prejudicial to the interest of the Company.
3.2 The payment of the principal and the interest wherever applicable are regular.
3.3 There are no overdue amounts in respect of the loan granted to the parties listed in the Register maintained under Section 189 of the Act.
4) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Act, in respect of loans, investments, guarantees, and security made.
5) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.
6) The Company is maintaining the accounts and records which have been specified by the Central Government under Section148(1) of the Act.
7) Undisputed and disputed taxes and duties
7.1 The Company is regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess, Goods and Services Tax and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at 31st March, 2018 for a period of more than six months from the date they became payable.
7.2 The disputed statutory dues aggregating to Rs. 204.56 Lakhs (PY: Rs. 193.75 Lakhs) that have not been deposited on account of matters pending before appropriate authorities are as under.
|
Name of the Statute |
Amount (Rs. in Lakhs) |
Forum where dispute is pending |
|
Service Tax |
204.56 |
Central Excise, Customs & Service Tax Appellate Tribunal, Chennai |
8) The Company has not defaulted in repayment of loans and borrowings to Financial Institutions or Banks. The Company did not have any loans or borrowings from the government or borrowings by way of debentures.
9) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments). The Company has raised term loans from Banks during the year and the proceeds have been applied for the purposes for which they were raised.
10) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.
11) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
12) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 3 (xii) of the Order are not applicable to the Company.
13) In our opinion, all transactions with the related parties are incompliance with Section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements as required by the applicable Accounting Standards.
14) Based upon the audit procedures performed and the information and explanations given by the
Management, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of clause 3 (xiv) of the Order are not applicable to the Company.
15) Based upon the audit procedures performed and the information and explanations given by the Management, the Company has not entered into any non-cash transactions with Directors or persons connected with him. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company.
16) In our opinion, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company.
|
For N.A. JAYARAMAN & CO |
For SRSV & ASSOCIATES, |
|
Chartered Accountants |
Chartered Accountants |
|
Firm Registration No. 001310S |
Firm Registration No. 015041S |
|
R. PALANIAPPAN |
P. SANTHANAM |
|
Proprietor |
Partner |
|
Membership No. 205112 |
Membership No. 018697 |
|
Rajapalaiyam, 29th May, 2018. |
"Annexure B" to the Independent Auditors'' Report of even date on the Separate Financial Statements prepared in accordance with Indian Accounting Standards of Rajapalayam Mills Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Rajapalayam Mills Limited ("the Company") as of 31st March, 2018 in conjunction with our audit of the Financial Statements of the Company for the year ended on 31st March, 2018.
Management''s Responsibility for Internal Financial Controls
The Company''s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting ("the Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both applicable to an audit of Internal financial controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
A Company''s internal financial control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of Management and Directors of the Company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Company''s assets that could have a material effect on the Financial Statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, and to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating
effectively as at 31st March, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.
|
For N.A. JAYARAMAN & CO |
For SRSV & ASSOCIATES, |
|
Chartered Accountants |
Chartered Accountants |
|
Firm Registration No. 001310S |
Firm Registration No. 015041S |
|
R. PALANIAPPAN |
P. SANTHANAM |
|
Proprietor |
Partner |
|
Membership No. 205112 |
Membership No. 018697 |
|
Rajapalaiyam, |
|
|
29th May, 2018. |
Mar 31, 2017
Report on the Separate Ind AS Financial Statements
We have audited the accompanying separate Ind AS financial statements of Rajapalayam Mills Limited (âthe Companyâ), which comprise the balance sheet as at 31st March, 2017, the statement of profit and loss (including other comprehensive income), the statement of cash flows and the statement of changes in equity for the year then ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as âSeparate Ind AS financial statementsâ).
Managementâs Responsibility for the Separate Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these separate Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with relevant rules issued thereunder.
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 separate Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these separate Ind AS 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 thereunder.
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 separate Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the separate Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the separate Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the separate Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the separate Ind AS 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 separate Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid separate Ind AS 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 including the Ind AS, of the financial position of the Company as at 31st March, 2017, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure A, a statement on the matters specified in the paragraph 3 and 4 of the order.
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, the statement of cash flows and the statement of changes in equity dealt with by this Report are in agreement with the books of account;
(d) in our opinion, the aforesaid separate Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act read with relevant rule issued thereunder;
(e) on the basis of the written representations received from the directors as on 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2017 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ; and
(g) with respect to the other matters to be included in the Auditorâs 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 the impact of pending litigations on its financial position in its separate Ind AS financial statements - Refer Note No.39 (iii) and (iv) to the separate Ind AS financial statements;
ii. the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note No. 25 to the separate Ind AS financial statements;
iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and
iv. the Company has provided requisite disclosures in its separate Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and these are in accordance with the books of accounts maintained by the Company. Refer Note No.49 to the separate Ind AS financial statements.
âANNEXURE - Aâ TO THE INDEPENDENT AUDITORSâ REPORT - 31st MARCH, 2017
(Referred to Paragraph 1 under the heading of - âReport on other Legal and Regulatory Requirementsâ of our report of even date)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and nature of its assets.
(c) According to the information and explanations given to us on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
(ii) The inventories, except goods in transit, have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable. In respect of inventories lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on verification between the physical stocks and book records were not material.
(iii) The Company has granted loan to one body corporate covered in the register maintained under Section 189 of the Companies Act, 2013.
(a) In our opinion, the rate of interest and other terms and conditions on which the loan had been granted to the body corporate listed in the register maintained under Section 189 of the Act were not, prima facie, prejudicial to the interest of the Company.
(b) In the case of loans granted to the body corporate listed in the register maintained under Section 189 of the Act, the borrowers have been regular in the payment of interest as stipulated. The terms of arrangements do not stipulate any repayment schedule and the loan is repayable on demand. Accordingly, paragraph (iii) (b) of the Order is not applicable to the Company in respect of repayment of the principal amount.
(c) There are no overdue amounts in respect of the loan granted to a body corporate listed in the register maintained under Section 189 of the Act.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Act, with respect to the loans, investments, guarantees and security made.
(v) The Company has not accepted any deposits within the meaning of Section 73 to 76 of the act and Companies (Acceptance of Deposits) Rules 2014 from the public during the year.
(vi) The Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 has specified maintenance of cost records for the Company and such accounts and records have been made and maintained by the Company.
(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company is regular in depositing undisputed statutory dues including provident fund, employeesâ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities.
According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues were in arrears as at 31st March, 2017 for a period of more than six months from the date they become payable.
(b) According to the information and explanations given to us, the following dues of service tax has not been deposited by the Company on account of disputes:
|
Name of the Statute |
Amount (Rs. in Lakhs) |
Forum where dispute is pending |
|
Service Tax |
193.75 |
Central Excise, Customs & Service Tax Appellate Tribunal, Chennai |
(viii) The Company has not defaulted in repayment of loans or borrowing to financial institutions or bank. The Company did not have any loans or borrowings from the government or borrowings by way of debentures.
(ix) The Company has not raised any money by way of initial public offer (including debt instruments). The moneys raised by way of Term Loans were applied for the purposes for which they were raised.
(x) According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
(xi) According to the information and explanations given to us, and based on our examination of the records of the Company, the Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.
(xiii) According to information and explanations given to us, and based on our examination of the records of the Company, transactions with related parties are in compliance with Sections 177 and 188 of the Act where applicable. The details of such related party transactions have been disclosed in the separate financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
(xv) According to the information and explanations given to us and base on our examination of the records of the Company, the Company has not entered into non-cash transactions with Directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable to the Company.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.
For M.S. JAGANNATHAN & N. KRISHNASWAMI For RAMAKRISHNA RAJA AND CO.,
Chartered Accountants Chartered Accountants
Firm Registration No. 001208S Firm Registration No. 005333S
K. SRINIVASAN V. JAYANTHI
Partner Partner
Membership No. 21510 Membership No. 28952
RAJAPALAIYAM,
25th May, 2017.
Mar 31, 2015
Report on the Financial Statements
We have audited the accompanying financial statements of RAJAPALAYAM
MILLS LIMITED ("the Company"), which comprise the Balance Sheet as at
31st March, 2015, the Statement of Profit and Loss, the Cash Flow
Statement for the year then ended, and a summary of the 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 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 of 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 thereunder. 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 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 profit and its 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, 2015 ("the
order") issued by the Central Government of India in terms of Section
143 (11) 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 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164(2) of the
Act.
(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 the impact of pending litigations on its
financial position in its financial statements.
ii. The Company did not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Referred to in paragraph 1 of Report on the legal and regulatory
requirements of our report of even date:
1) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) All assets have been physically verified by the management during
the year and there is a regular programme of verification which, in our
opinion, is reasonable having regard to the size of the company and the
nature of its assets. No material discrepancies were noticed on such
verification.
2) (a) The inventory has been physically verified during the year by
the management. In our opinion the frequency of verification is
reasonable.
(b) 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) On the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. The discrepancies noticed on verification between the
physical stocks and the book records were not material.
3) (a) The Company has granted loans to two parties covered in the
register maintained under section 189 of the Companies Act, 2013.
(b) In the case of loans granted to the parties listed in the register
maintained under Section 189 of the Act, the borrowers have been
regular in the payment of interest as stipulated. The terms of
arrangements do not stipulate any repayment schedule and the loans are
repayable on demand. Accordingly, paragraph 3(iii) (a) of the Order is
not applicable to the company in respect of repayment of the principal
amount.
(c) There are no overdue amounts in respect of the loans granted to the
parties listed in the register maintained under Section 189 of the Act.
4) In our opinion and according to the information and explanations
given to us, there are adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and for the sale of goods and
services. We have not observed any major weakness in the internal
control system during the course of the audit.
5) The Company has not accepted any deposits within the meaning of
Companies (Acceptance of Deposits) Rules 2014, from the public during
the year. The Deposits accepted by the Company before the Commencement
of the Companies Act, 2013 have been repaid as per the provisions of
Section 74 of the Act. No order has been passed by the Company Law
Board or the National Company Law Tribunal or by any Court or by any
other Tribunal against the Company.
6) The Company is maintaining the accounts and records which have been
specified by the Central Government under of Section 148(1) of the
Companies Act, 2013.
7) (a) According to the information and explanations given to us and on
the basis of our examination of the records of the Company, the company
is regular in depositing undisputed statutory dues including provident
fund, employees' state insurance, income tax, sales tax, wealth tax,
service tax, duty of customs, duty of excise, value added tax, cess and
other statutory dues with the appropriate authorities.
According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, income tax,
wealth tax, sales tax, value added tax, service tax, duty of customs,
cess and other statutory dues were in arrears as at 31st March 2015 for
a period of more than six months from the date they become payable.
(b) According to the information and explanations given to us, the
following dues of income tax, Value added tax, service tax have not
been deposited by the Company on account of disputes:
Name of the Amount Forum where dispute is pending
Statute (Rs. in Lakhs)
Service Tax Central Excise, Customs & Service Tax
172.15 Appellate Tribunal, Chennai
Income Tax 92.95 The Commissioner of Income Tax
(Appeal-II), Madurai
(c) According to the information and explanations given to us, the
amounts which were required to be transferred to the investor education
and protection fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules there under has been
transferred to such fund within time.
8) The Company does not have any accumulated losses at the end of the
financial year and has not incurred cash losses in the financial year
and in the immediately preceding financial year.
9) The company has not defaulted in repayment of dues to financial
institutions or banks. The Company has not issued any debenture during
the year.
10) The company has given guarantee for loans taken by others from
banks or financial institutions and the terms and conditions whereof
are not prejudicial to the interest of the Company.
11) The Term Loans obtained by the Company were applied for the purpose
for which the loans were obtained.
12) According to the information and explanations given to us, no
material fraud on or by the Company has been noticed or reported during
the year.
For M.S.JAGANNATHAN & N.KRISHNASWAMI For RAMAKRISHNA RAJA AND CO.,
Chartered Accountants Chartered Accountants
Firm Registration No. 001208S Firm Registration No. 005333S
K.SRINIVASAN VJAYANTHI
Partner Partner
Membership No. 21510 Membership No. 28952
RAJAPALAIYAM,
21st May, 2015.
Mar 31, 2014
We have audited the accompanying financial statements of M/s.
Rajapalayam Mills Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2014, and the Statement of Profit and Loss and
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
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") read with the General Circular
15/2013 dated 13-09-2013 of the Ministry of Corporate Affairs in
respect of Section 133 of the Companies Act, 2013. 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.
Auditor''s Responsibility
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 procedure 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 statement 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, but not for the
purpose of expressing an opinion on the effectiveness of the entity''s
internal control. 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.
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 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, 2014.
(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 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 (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 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
audit;
(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;
(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;
(d) in our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in sub-section (3C) of Section 211 of the Companies Act, 1956 read
with the General Circular 15/2013 dated 13-09-2013 of the Ministry of
Corporate Affairs in respect of Section 133 of the Companies Act, 2013;
and
(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 are disqualified as on March 31, 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 THE AUDITOR''S REPORT
Annexure Referred to in paragraph 1 of "Report on other Legal and
Regulatory requirements" of our Report of even date
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The management is having a regular programme of verification of
fixed assets which, in our opinion, is reasonable having regard to the
size of the company and the nature of its assets. According to the
information and explanations given to us no material discrepancies were
noticed on such verification.
(c) The Company during the year has disposed off Plant and Machinery
and other assets excluding Land and Buildings of the Tissue Culture
Operations which was discontinued, for a sum of Rs. 109.43 Lakhs (Net
book value Rs. 91.00 Lakhs) as approved by the Shareholders through
resolution passed on 26-07-2013. This has no impact on the going
concern status of the company.
(ii) (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) 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 is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material, and have been dealt with in the
books of accounts.
(iii) (a) The Company has granted unsecured loans aggregating to Rs.
6,235.00 Lakhs during
the year (PY: Rs. 625.00 Lakhs) to 2 parties covered in the Register
maintained under Section 301 of the Act, 1956. The maximum amount
outstanding at any time during the year including the opening balance
and the year end balance of such loan aggregate to Rs. 5,036.00 Lakhs
(PY: Rs. 3,361.00 Lakhs) and Rs. 3,450.00 Lakhs (PY: Rs. 1,636.00
Lakhs) respectively.
(b) In our opinion, the rate of interest and other terms and conditions
on which the loan has been given to such companies / persons are not,
prima facie prejudicial to the interest of the company.
(c) In respect of loans granted wherever stipulation have been made,
the principal amounts are received as stipulated and also the payment
of interest is regular where applicable.
(d) There are no over due amount of loan granted by the company.
(e) The Company has taken unsecured loans aggregating to Rs. 1,439.92
Lakhs (PY: Rs. 35.29 Lakhs) from 4 parties covered in the register
maintained under
Section 301 of the Act. The maximum amount involved during the year and
the year end balance of unsecured loans aggregate to Rs. 1,377.77
Lakhs (PY: Rs. 35.42 Lakhs) and Rs. 1,178.71 Lakhs (PY: Rs. 35.42
Lakhs) respectively.
(f) In our opinion, the rate of interest and other terms and conditions
on which the loan has taken from such companies / persons are not,
prima facie prejudicial to the interest of the Company.
(g) The Company is regular in payment of the principal and interest
wherever applicable.
(iv) 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 the nature of its business with regard
to purchases of inventory, fixed assets and also with regard to the
sale of goods. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
systems of the Company.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of transactions made in
pursuance of contracts or arrangements that need to be entered into the
register maintained under Section 301 of the Companies Act, 1956 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act,1956 and exceeding the value of Rs. 5 Lakhs in
respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
time.
(vi) The company has accepted deposits from the public and the company
has complied with the directives issued by the Reserve Bank of India
and the provisions of section 58A and 58AA or any other relevant
provision of the companies Act and rules framed there under. No order
has been passed on the Company by the Company Law Board or National
Company Law Tribunal or Reserve Bank of India or any Court or any other
Tribunal for non-compliance with the provision of Section 58A and 58AA
of the Companies Act, 1956.
(vii) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the
company in respect of products pursuant to the rules made by the
Central Government for the maintenance of cost record under Section 209
(1) (d) of the Companies Act, 1956 and are of the opinion that prima
facie the prescribed accounts and records have been maintained. We have
not however made a detailed examination of the records with a view to
determine whether they are accurate or complete.
(ix) (a) The Company is regular in depositing undisputed statutory dues
including Provident Fund, Investor Education and Production Fund,
Employees State Insurance, Income Tax, Sales Tax, Wealth Tax,
Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues
with the appropriate authorities.
(b) According to the information and explanations given to us, no
undisputed amount payable in respect of Provident Fund, Investor
Education and Production Fund, Income Tax, Sales Tax, Wealth Tax,
Service Tax and other material statutory dues were in arrears as at
31st March, 2014 for a period of more than six months from the date
they became payable.
(c) The disputed statutory dues aggregating to Rs. 157.17 Lakhs (PY:
123.05 Lakhs) that have not been deposited an account of matters
pending before appropriate authorities are as under:
Name of the Statute Forum where dispute is pending Amount
(Rs. in Lakhs)
Service Tax Central Excise, Customs &
Service Tax Appellate
Tribunal, Chennai 153.02
Income Tax The Commissioner of Income
Tax (Appeal-II), Madurai 4.15
(x) The Company has no accumulated losses at the end of the financial
year nor had it incurred any cash loss during the financial year or in
the immediately preceding financial year.
(xi) According to the records of the company examined by us and the
information and explanations given to us, the company has not defaulted
in repayment of dues to any financial institutions or bank during the
year.
(xii) According to the information and explanations given to us, the
company has not granted loans or advances on the basis of security by
way of pledge of shares, debentures or other Investments.
(xiii) In our opinion, the Company is not a Chit fund or a Nidhi /
Mutual benefit fund / Society. Therefore the provisions of Clause 4
(xiii) of the Companies (Auditor''s Report) Order 2003 are not
applicable to the Company.
(xiv) In our opinion, the company is not dealing in or trading in
shares, securities, debenture or other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order
2003 are not applicable to the Company.
(xv) The terms and conditions of the guarantee given by the Company for
loans taken by others from Banks or financial institutions are not
prima facie prejudicial to the interest of the Company.
(xvi) On the basis of review of uitilisation of funds on an overall
basis in our opinion, the terms loans taken by the company were applied
for the purpose for which the loans were obtained.
(xvii) According to the information and explanations given to us and on
the basis of overall examination of the balance sheet of the Company,
we report that no funds raised on short term basis have been used for
long term investment.
(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 Companies Act, 1956.
(xix) The Company has not issued debentures and accordingly no security
or charge has been created in respect of debentures.
(xx) The Company has not made a public issue of any its securities
during the year and accordingly the provisions of Clause 4(xx) of the
Companies (Auditor''s Report) order 2003 are not applicable to the
Company.
(xxi) According to the information and explanations given to us, no
material fraud on or by the Company has been noticed or reported during
the course of our audit.
For M.S.JAGANNATHAN & N.KRISHNASWAMI For RAMAKRISHNA RAJA AND CO.,
Chartered Accountants Chartered Accountants
Firm Registration No. 001208S Firm Registration No. 005333S
K.SRINIVASAN V. JAYANTHI
Partner Partner
Membership No. 21510 Membership No. 28952
RAJAPALAIYAM,
25th May, 2014.
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of M/s.
Rajapalayam Mills Limited ("the Company"), which comprise the Balance
Sheet as at March 31, 2013, and the Statement of Profit and Loss and
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
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.
Auditor''s Responsibility
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 procedure 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 statement 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.
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 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 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 (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 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
audit;
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;
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;
d. in our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in sub-section (3C) of Section 211 of the Companies Act, 1956;
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 in 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 Companies Act, 1956.
f. Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under Section 441 A 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 THE AUDITOR''S REPORT
Annexure Referred to in paragraph 1 of "Report on other Legal and
Regulatory requirements" of our Report of even date
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The management is having a regular programme of verification of
fixed assets which, in our opinion, is reasonable having regard to the
size of the company and the nature of its assets. According to the
information and explanations given to us no material discrepancies were
noticed on such verification.
(c) No substantial part of fixed assets of the company has been
disposed off during the year.
(ii) (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) 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 is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material, and have been dealt with in the
books of accounts.
(iii) (a) The Company has granted unsecured loans of Rs. 6.25 Crores
during the year to 5 parties covered in the Register maintained under
Section 301 of the Act, 1956. The maximum amount outstanding at any
time during the year including the opening balance and the year end
balance of such loan aggregate to Rs. 33.61 Crores and Rs. 16.36 Crores
respectively.
(b) In our opinion, the rate of interest and other terms and conditions
on which the loan has been given to such companies / persons are not,
prima facie prejudicial to the interest of the company.
(c) In respect of loans granted wherever stipulation have been made,
the principal amounts are received as stipulated and also the payment
of interest is regular where applicable.
(d) There are no over due amount of loan granted by the company.
(e) The Company has taken unsecured loans of Rs. 35.29 Lakhs from a
party covered in the register maintained under Section 301 of the Act.
The maximum amount involved during the year and the year end balance of
unsecured loans aggregate to Rs. 35.42 Lakhs and Rs. 35.42 Lakhs
respectively.
(f) In our opinion, the rate of interest and other terms and conditions
on which the loan has taken from such companies/persons are not, prima
facie prejudicial to the interest of the company.
(g) The Company is regular in payment of the principal and interest
wherever applicable.
(iv) 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 the nature of its business with regard
to purchases of inventory, fixed assets and also with regard to the
sale of goods. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal control
systems of the Company.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of transactions made in
pursuance of contracts or arrangements that need to be entered into the
register maintained under Section 301 of the Companies Act, 1956 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding the value of Rs. 5 Lakhs in
respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
time.
(vi) The company has accepted deposits from the public and the company
has complied with the directives issued by the Reserve Bank of India
and the provisions of section 58A and 58AA or any other relevant
provision of the companies Act and rules framed there under. No order
has been passed on the Company by the Company Law Board or National
Company Law Tribunal or Reserve Bank of India or any Court or any other
Tribunal for non-compliance with the provision of section 58A and 58AA
of the Companies Act, 1956.
(vii) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the
company in respect of products pursuant to the rules made by the
Central Government for the maintenance of cost record under Section 209
(1) (d) of the Companies Act, 1956 and are of the opinion that prima
facie the prescribed accounts and records have been maintained. We have
not however made a detailed examination of the records with a view to
determine whether they are accurate or complete.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees'' state insurance, income tax,
sales tax, wealth tax, custom duty, excise duty, service tax, cess and
other material statutory dues applicable to it, have generally been
regularly deposited with the appropriate authorities.
(b) According to the information and explanations given to us, there
are no dues of income tax, wealth tax, sales tax, customs duty, excise
duty, service tax and cess which have not been deposited on account of
any dispute except as follows:
(x) The Company has no accumulated losses at the end of the financial
year nor had it incurred any cash loss during the financial year or in
the immediately preceding financial year.
(xi) According to the records of the company examined by us and the
information and explanations given to us, the company has not defaulted
in repayment of dues to any financial institutions or bank during the
year.
(xii) According to the information and explanations given to us, the
company has not granted loans or advances on the basis of security by
way of pledge of shares, debentures or other Investments.
(xiii) In our opinion, the Company is not a Chit fund or a Nidhi /
Mutual benefit fund / Society. Therefore the provisions of clause 4
(xiii) of the Companies (Auditor''s Report) order 2003 are not
applicable to the Company.
(xiv) In our opinion, the company is not dealing in or trading in
shares, securities, debenture or other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order
2003 are not applicable to the company.
(xv) The terms and conditions of the guarantee given by the Company for
loans taken by others from Banks or financial institutions are not
prima facie prejudicial to the interest of the Company.
(xvi) On the basis of review of utilisation of funds on an overall
basis in our opinion, the terms loans taken by the company were applied
for the purpose for which the loans were obtained.
(xvii) According to the information and explanations given to us and on
the basis of overall examination of the balance sheet of the Company,
we report that no,funds raised on short term basis have been used for
long term investment.
(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 Companies Act, 1956.
(xix) The Company has not issued debentures and accordingly no security
or charge has been created in respect of debentures.
(xx) The Company has not made a public issue of any its securities
during the year and accordingly the provisions of clause 4(xx) of the
Companies (Auditor''s Report) order 2003 are not applicable to the
Company.
(xxi) According to the information and explanations given to us, no
material fraud on or by the company has been noticed or reported during
the course of our audit.
For M.S.JAGANNATHAN &
N.KRISHNASWAMI For RAMAKRISHNA RAJA AND CO.,
Chartered Accountants Chartered Accountants
Firm Registration No. 001208S Firm Registration No. 005333S
K.SRINIVASAN V. JAYANTHI
Partner Partner
Membership No. 21510 Membership No. 28952
RAJAPALAIYAM, 27th May, 2013.
Mar 31, 2012
1. We have audited the attached Balance Sheet of Rajapalayam Mills
Limited as at 31st March, 2012 and the related Statement of Profit and
Loss and Cash Flow Statement for the year ended on that date annexed
thereto, which we have signed under reference to this report. 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.
2. We conducted our audit in accordance with the 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 of 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
our opinion.
3. As required by the Companies (Auditor's Report) Order 2003 as
amended by the Companies (Auditor's Report) (Amendment) Order, 2004,
issued by the Government of India in terms of section 227 (4A) of the
Companies Act, 1956 of India (the Act) and on the basis of such checks
of the books and records of the company as we considered appropriate
and according to the information and explanations give to us, we set
out in the Annexure a statement on the matters specified in paragraphs
4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) 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;
(iii) 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;
(iv) In our opinion, the Balance Sheet and the Statement of Profit and
Loss and Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act 1956;
(v) On the basis of written representations received from the directors
and taken on record by the Board of Directors, none of the directors is
disqualified as on March 31, 2012 from being appointed as a director in
terms of Section 274 (1)(g) of the Act;
(vi) In our opinion, and to the best of our information and according
to the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give in the prescribed
manner the information required by the Act and also 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, 2012;
(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.
ANNEXURE TO THE AUDITOR'S REPORT
Annexure Referred to in paragraph 3 of our report of even date to the
Shareholders of RAJAPALAYAM MILLS LIMITED
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The management is having a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the company
and the nature of its assets. No material discrepancies were noticed
on such verification.
(c) No substantial part of fixed assets of the company has been
disposed off during the year.
(ii) (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) 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 is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material, and have been dealt with in the
books of accounts.
(iii) (a) The Company has granted unsecured loans of Rs. 26.75 Crores
during the year to 6 parties covered in the Register maintained under
section 301 of the Act, 1956. The maximum amount outstanding at any
time during the year including the opening balance and the year end
balance of such loan aggregate to Rs. 75.11 Crores and Rs. 31.61 Crores
respectively.
(b) In our opinion, the rate of interest and other terms and conditions
on which the loan has been given to such companies / persons are not,
prima facie prejudicial to the interest of the company.
(c) In respect of loans granted wherever stipulation have been made,
the principal amounts are received as stipulated and also the payment
of interest is regular where applicable.
(d) There are no over due amount of loan granted by the company.
(e) The Company has taken unsecured loans of Rs. 96.99 Lakhs from a
party covered in the register maintained under section 301 of the Act.
The maximum amount involved during the year and the year end balance of
unsecured loans aggregate to Rs. 92.45 Lakhs and Rs. 4.25 Lakhs
respectively.
(f) In our opinion, the rate of interest and other terms and conditions
on which the loan has taken from such companies / persons are not,
prima facie prejudicial to the interest of the company.
(g) The Company is regular in payment of the principal and interest
wherever applicable.
(iv) 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 the nature of its business with regard
to purchases of inventory, fixed assets and with regard to the sale of
goods. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal systems of
the Company.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contract or arrangements
that need to be entered into the register maintained under Section 301
of the Companies Act, 1956 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act,1956 and exceeding the value of Rs. 5 Lakhs in
respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
time.
(vi) The company has accepted deposits from the public and the company
has complied with the directives issued by the Reserve Bank of India
and the provisions of section 58A and 58AA or any other relevant
provision of the Companies Act and rules framed there under. No order
has been passed by the Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal.
(vii) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the
company in respect of products pursuant to the rules made by the
Central Government for the maintenance of cost record under section 209
(1) (d) of the Companies Act, 1956 and are of the opinion that prima
facie the prescribed accounts and records have been maintained. We have
not however made a detailed examination of the records with a view to
determine whether they are accurate or complete.
(ix) (a) Undisputed statutory dues including provident fund, investor
education and protection fund, employees' state insurance, income tax,
sales tax, wealth tax, custom duty, excise duty, service tax, cess and
other material statutory dues applicable to it have generally been
regularly deposited with the appropriate authorities.
(b) According to the information and explanations given to us, there
are no dues of income tax, wealth tax, sales tax, customs duty, excise
duty, service tax and cess which have not been deposited on account of
any dispute except as follows:
Name of the Statute Forum where dispute Amount
is pending (Rs. in Lakhs)
Service Tax Commissioner (Appeals) 127.40
(x) The Company has no accumulated losses at the end of the financial
year nor had it incurred any cash loss during the financial year or in
the immediately preceding financial year.
(xi) According to the records of the company examined by us and the
information and explanations given to us, the company has not defaulted
in repayment of dues to any financial institutions or bank during the
year.
(xii) According to the information and explanations given to us, the
Company has not granted loans or advances on the basis of security by
way of pledge of shares, debentures or other Investments.
(xiii) The provisions of any special statue applicable to Chit fund /
Nidhi / Mutual benefit fund societies are not applicable to the
company.
(xiv) In our opinion, the company is not dealing in or trading in
shares, securities, debenture or other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order,
2003 are not applicable to the company.
(xv) Based on information and explanations given to us, the terms and
conditions of the guarantee given by the Company to parties consisting
of related parties ([The Ramaraju Surgical Cotton Mills Limited -
Guarantee given Rs. 15,199 Lakhs; Loans outstanding Rs. 9,125 Lakhs];
[Sri Vishnu Shankar Mills Limited - Guarantee given Rs. 15,964 Lakhs;
Loans outstanding Rs. 8,379 Lakhs]; [Sandhya Spinning Mill Limited -
Guarantee given Rs. 15,556 Lakhs; Loans outstanding Rs. 9,716 Lakhs],
[Thanjavur Spinning Mills Limited - Guarantee given Rs. 12,675 Lakhs ;
Loans outstanding Rs. 8,542 Lakhs]); to secure loans availed from banks
by the respective companies are not prejudicial to the interests of
Rajapalayam Mills Limited.
(xvi) On the basis of review of uitilisation of funds on an overall
basis in our opinion, the terms loans taken by the company were applied
for the purpose for which the loans were obtained.
(xvii) According to the information and explanations given to us and an
overall examination of the balance sheet of the Company, we report that
no funds raised on short term basis have been used for long term
investment.
(xviii) The Company has made preferential allotment of shares during
the year to a party covered in the register maintained under section
301 of the Companies Act. In our opinion the price at which shares have
been issued is not prejudicial to the interest of the Company.
(xix) The Company has not issued debentures and accordingly no
securities or charges have been created in respect of debentures.
(xx) The Company has not made a public issue of any its securities
during the year.
(xxi) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
course of our audit.
For M.S.JAGANNATHAN & N.KRISHNASWAMI For RAMAKRISHNA RAJA AND CO.,
Chartered Accountants Chartered Accountants
Firm Registration No. 001208S Firm Registration No. 005333S
K.SRINIVASAN V.JAYANTHI
Partner Partner
Membership No. 21510 Membership No. 28952
RAJAPALAIYAM,
28th May, 2012.
Mar 31, 2011
1. We have audited the attached Balance Sheet of Rajapalayam Mills
Limited as at 31st March, 2011, and the related Profit and Loss Account
and the Cash Flow Statement for the year ended on that date annexed
thereto, which we have signed under reference to this report. These
financial statements are the responsibility of the CompanyÃs
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the 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 of 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
our opinion.
3. As required by the Companies (AuditorÃs Report) Order, 2003, as
amended by the Companies (AuditorÃs Report) (Amendment) Order 2004,
issued by the Government of India in terms of section 227 (4A) of the
Companies Act, 1956 (the Act) and on the basis of such checks of the
books and records of the company as we considered appropriate and
according to the information and explanations given to us, we set out
in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) 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;
(iii) The Balance sheet, Profit and Loss account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet, Profit and Loss account and
Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956;
(v) On the basis of written representations received from the directors
and taken on record by the Board of Directors, none of the directors is
disqualified as on March 31, 2011 from being appointed as a director in
terms of Section 274 (1) (g) of the Act;
(vi) In our opinion, and to the best of our information and according
to the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give in the prescribed
manner the information required by the Act and also 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, 2011;
(b) in the case of the Profit and Loss account, 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.
ANNEXURE TO THE AUDITORÃS REPORT
Annexure Referred to in paragraph 3 of our report of even date to the
Shareholders of RAJAPALAYAM MILLS LIMITED
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The management is having a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the company
and the nature of its assets. No material discrepancies were noticed on
such verification.
(c) No substantial part of fixed assets of the company has been
disposed off during the year.
(ii) (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) 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 is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material, and have been dealt with in the
books of accounts.
(iii) (a) The Company has granted unsecured loans of Rs.87.90 crores
during the year to 5 parties covered in the Register maintained under
section 301 of the Act, 1956. The maximum amount outstanding at any
time during the year including the opening balance and the year end
balance of such loan aggregate to Rs.93.00 Crores and Rs.54.36 Crores
respectively.
(b) In our opinion, the rate of interest and other terms and conditions
on which the loan has been given to such companies / persons are not,
prima facie prejudicial to the interest of the company.
(c) In respect of loans granted wherever stipulation have been made,
the principal amounts are received as stipulated and also the payment
of interest is regular where applicable.
(d) There are no over due amount of loan granted by the company.
(e) The Company has taken unsecured loans of Rs. 2.52 crores from 2
parties covered in the register maintained under section 301 of the
Act. The maximum amount involved during the year and the year end
balance of unsecured loans aggregate to Rs. 2.52 Crores and Rs. 0.57
Crore respectively.
(f) In our opinion, the rate of interest and other terms and conditions
on which the loan has taken from such companies / persons are not,
prima facie prejudicial to the interest of the company.
(g) The Company is regular in payment of the principal and interest
wherever applicable.
(iv) 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 the nature of its business with regard
to purchases of inventory, fixed assets and with regard to the sale of
goods. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal systems.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contract or arrangements
that need to be entered into the register maintained under section 301
of the Companies Act, 1956 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding the value of Rs. 5 lakhs in
respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
time.
(vi) The Company has accepted deposits from the public and the Company
has complied with the directives issued by the Reserve Bank of India
and the provisions of section 58A and 58AA or any other relevant
provision of the Companies Act and rules framed there under. No order
has been passed by the Company Law Board or National Company Law
Tribunal or Reserve Bank of India or any Court or any other Tribunal.
(vii) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the
company in respect of products pursuant to the rules made by the
Central Government for the maintenance of cost record under section 209
(1) (d) of the Companies Act, 1956 and are of the opinion that prima
facie the prescribed accounts and records have been maintained. We have
not however made a detailed examination of the records with a view to
determine whether they are accurate or complete.
(ix) (a) Undisputed statutory dues including provident fund, investor
education protection fund, employeesà state insurance, income tax,
sales tax, wealth tax, customs duty, excise duty, service tax, cess and
other material statutory dues applicable have generally been regularly
deposited with the appropriate authorities.
(b) According to the information and explanations given to us, there
are no dues of income tax, wealth tax, sales tax, customs duty, excise
duty, service tax and cess which have not been deposited on account of
any dispute except as follows :
Name of the Forum where dispute is Amount
Statute pending (Rs. in
Lakhs)
TN VAT Act The Joint Commissoner of 87.55
Commercial Tax
Service Tax Commissioner(Appeals) 0.48
(x) The Company has no accumulated losses at the end of the financial
year nor had it incurred any cash loss during the financial year or in
the immediately preceding financial year.
(xi) According to the records of the Company examined by us and the
information and explanations given to us, the Company has not defaulted
in repayment of dues to any financial institution or bank during the
year.
(xii) According to the information and explanations given to us, the
Company has not granted loans or advances on the basis of security by
way of pledge of shares, debentures or other Investments.
(xiii) The provisions of any special statue applicable to Chit
fund/Nidhi/Mutual benefit fund societies are not applicable to the
Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debenture or other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (AuditorÃs Report) Order,
2003 are not applicable to the Company.
(xv) The terms and conditions of the guarantee given by the Company for
loans taken by others from banks or financial institutions are not
prima facie prejudicial to the interest of the Company.
(xvi) On the basis of review of utilisation of funds on an overall
basis, in our opinion, the term loans taken by the Company were applied
for the purpose for which the loans were obtained.
(xvii) According to the information and explanations given to us and an
overall examination of the balance sheet of the Company, we report that
no funds raised on short term basis have been used for long term
investment.
(xviii) The Company has not made any preferential allotment of shares
during the year to parties and Companies covered in the register
maintained under section 301 of the Act.
(xix) The Company has not issued debentures and accordingly no
securities or charges have been created in respect of debentures.
(xx) The Company has not made a public issue of any of its securities
during the year.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For RAMAKRISHNA RAJA AND CO.,
Chartered Accountants
Firm Registration No. : 005333S
V. JAYANTHI
Partner
Membership No. 28952
For M.S. JAGANNATHAN & N. KRISHNASWAMI,
Chartered Accountants
Firm Registration No. : 001208S
K. SRINIVASAN
Partner
Membership No. 21510
RAJAPALAIYAM,
28th May, 2011.
Mar 31, 2010
1. We have audited the attached Balance Sheet of Rajapalayam Mills
Limited as at 31st March, 2010, and the related Profit and Loss Account
and the Cash Flow Statement for the year ended on that date annexed
thereto, which we have signed under reference to this report. These
financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with the 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 of 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
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 as
amended by the Companies (Auditors Report) (Amendment) Order, 2004,
issued by the Government of India in terms of section 227 (4A) of the
Companies Act, 1956 of India (the Act) and on the basis of such checks
of the books and records of the company as we considered appropriate
and according to the information and explanations given to us, we set
out in the Annexure a statement on the matters specified in paragraphs
4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(i) We have obtained all the information and explanations, which to the
best of our
knowledge and belief were necessary for the purposes of our audit;
(ii) 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;
(iii) The Balance sheet, Profit and Loss account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet, Profit and Loss account and
Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956;
(v) On the basis of written representations received from the directors
and taken on record by the Board of Directors, none of the directors is
disqualified as on March 31, 2010 from being appointed as a director in
terms of Section 274 (1) (g) of the Act;
(vi) In our opinion, and to the best of our information and according
to the explanations given to us, the said financial statements together
with the notes thereon and attached thereto give in the prescribed
manner the information required by the Act and also 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, 2010;
(b) in the case of the Profit and Loss account, 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.
Annexure Referred to in paragraph 3 of our report of even date to the
Shareholders of RAJAPALAYAM MILLS LIMITED
(i) (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
(b) The management is having a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the company
and the nature of its assets. No material discrepancies were noticed on
such verification.
(c) No substantial part of fixed assets of the company has been
disposed off during the year.
(ii) (a) The inventory has been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) 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 is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stocks and
the book records were not material, and have been dealt with in the
books of accounts.
(iii) (a) The Company has granted unsecured loans of Rs.75.30 crores
during the year to 5 parties covered in the Register maintained under
section 301 of the Act, 1956. The maximum amount outstanding at any
time during the year and the year end balance of such loan aggregate to
Rs. 102.29 Crores and Rs.73.00 Crores respectively.
(b) In our opinion, the rate of interest and other terms and conditions
on which the loan has been given to such companies / persons are not,
prima facie prejudicial to the interest of the company.
(c) In respect of loans granted wherever stipulation have been made,
the principal amounts are received as stipulated and also the payment
of interest is regular where applicable.
(d) There are no over due amount of loan granted by the company.
(e) The Company has taken unsecured loans of Rs. 3.24 crores from 4
parties covered in the register maintained under section 301 of the
Act. The maximum amount involved during the year and the year end
balance of unsecured loans aggregate to Rs. 3.14 Crores and Rs. 0.14
Crore respectively.
(f) In our opinion, the rate of interest and other terms and conditions
on which the loan has taken from such companies / persons are not,
prima facie prejudicial to the interest of the company.
(iv) 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 the nature of its business with regard
to purchases of inventory, fixed assets and with regard to the sale of
goods. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal systems.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the particulars of contract or arrangement
referred is in Section 301 of the Act, have been entered in the
register required to be maintained under that section.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 have been made at prices which are reasonable
having regard to prevailing market prices at the relevant time.
(vi) The Company has accepted deposits from the public and the Company
has complied with the directives issued by the Reserve Bank of India
and the provisions of section 58A and 58AA or any other relevant
provision of the Companies Act and rules framed there under.
(vii) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
(viii) We have broadly reviewed the books of accounts maintained by the
company in respect of products pursuant to the rules made by the
Central Government for the maintenance of cost record under section 209
(1) (d) of the Companies Act, 1956 and are of the opinion that prima
facie the prescribed accounts and records have been maintained. We have
not however made a detailed examination of the records with a view to
determine whether they are accurate or complete.
(ix) (a) Undisputed statutory dues including provident fund, investor
education protection fund, employees state insurance, income tax,
sales tax, wealth tax, customs duty, excise duty, service tax, cess and
other material statutory dues applicable have generally been regularly
deposited with the appropriate authorities.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of income tax, wealth tax, sales
tax, customs duty, excise duty, service tax and cess were in arrears,
as at 31st March, 2010 for a period of more than six months from the
date they became payable.
(x) The Company has no accumulated losses at the end of the financial
year nor had it incurred any cash loss during the financial year or in
the immediately preceding financial year.
(xi) According to the records of the Company examined by us and the
information and explanations given to us, the Company has not defaulted
in repayment of dues to any financial institutional or bank during the
year.
(xii) According to the information and explanations given to us, the
Company has not granted loans or advances on the basis of security by
way of pledge of shares, debentures or other Investments.
(xiii) The provisions of any special statue applicable to Chit
fund/Nidhi/Mutual benefit fund societies are not applicable to the
Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debenture or other investments. Accordingly, the
provisions of clause 4 (xiv) of the Companies (Auditors Report) Order,
2003 are not applicable to the Company.
(xv) The terms and conditions of the guarantee given by the Company for
loans taken by others from banks or financial institutions are not
prima facie prejudicial to the interest of the Company.
(xvi) On the basis of review of utilisation of funds on an overall
basis, in our opinion, the terms loans taken by the Company were
applied for the purpose for which the loans were obtained.
(xvii) According to the information and explanations given to us and an
overall examination of the balance sheet of the Company, we report that
no funds raised on short term basis have been used for long term
investment.
(xviii) The Company has not made any preferential allotment of shares
during the year to parties and Companies covered in the register
maintained under section 301 of the Act.
(xix) The Company has not issued debentures and accordingly no
securities or charges have been created in respect of debentures.
(xx) The Company has not made a public issue of any its securities
during the year.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
course of our audit.
For
M.S. JAGANNATHAN & N. KRISHNASWAMI,
For
RAMAKRISHNA RAJA AND CO.,
Chartered Accountants Chartered Accountants
Firm Registration No. : 001208S
Firm Registration No.: 005333S
K. SRINIVASAN V. JAYANTHI
Partner Partner
Membership No. 21510 Membership No. 28952
RAJAPALAIYAM,
28th May, 2010.
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