| 1. We have audited the attached balance sheet of TAMARAI MILLS LIMITED
as at 31st March 2008 and also the Profit and Loss Account for the year
ended on that date annexed thereto and the cash flow statement for the
year ended on that date. 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 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 the 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, and as
amended by the Companies (Auditors Report) Amendment order, 2004
issued by the Central Government of India in terms of sub-section (4A)
of section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to above, 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 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 appears from our examination of those
books;
c) The Balance Sheet, Profit and Loss account and cash flow statement
dealt with by this report are in agreement with the books of account;
d) In our opinion, the Balance Sheet, Profit 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.
e) On the basis of one time settlement made with their secured lenders
and on the basis of written representations received from the
directors, as on 31st March 2008 and taken on record by the Board of
Directors, we report that none of the directors are disqualified as on
31st March 2008 from being appointed as a director in terms of clause
(g) of sub-section (1) of section 274 of the Companies Act, 1956 on
that said date.
5. In our opinion, and to the best of our information and according to
the explanations given to us, the said accounts give the information
required by the Companies Act 1956, in the manner so required and give
a true and fair view in conformity with the accounting principles
accepted in India:
a. In the case of Balance Sheet, of the state of affairs of the
company as at 31st March 2008;
b. In the case of Profit and Loss account, of the profit for the year
ended on that date; and
c. In 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
i) a) The company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) The assets have been physically verified by the management in
accordance with a phased programme of verification, which in our
opinion, is reasonable, considering the size and the nature of
business. The frequency of verification is reasonable and discrepancies
noticed on such physical verification were not material and have been
properly dealt with in books of accounts.
c) The Company during the year had disposed of substantial part of
fixed assets but as the disposal of the assets was in terms of
rehabilitation scheme filed before BIFR, the status of going concern is
not affected.
ii) a) Physical verification of inventory has been conducted at
reasonable intervals by the management.
b) The procedures of physical verification of inventory followed by the
management are reasonable and adequate in relation to the size of the
company and the nature of its business.
c) The company has maintained proper records of inventory and
discrepancies noticed on physical verification of inventories as
compared to book records were not material and have been appropriately
dealt with.
iii) a) The Company has not granted any loans secured or unsecured to
firms, Companies or other parties covered in the register maintained
under section 301 and hence sub clauses b.c & d are not applicable. b)
During the year, the company has taken interest free secured loans from
one party amounting to Rs. 1878.73 lakhs covered in the register
maintained under section 301 of the Companies Act, 1956. The above loan
was received from the party before she became the director of the
company but on the date of the balance sheet she is a director of the
company. The amount outstanding as on the date of balance sheet is Rs.
1608.73 lakhs.
iv) a) In our opinion and according to the explanation and information
given to us there are adequate internal control systems commensurate
with the size of the Company and the nature of the business for the
purchase of inventory and fixed assets and for the sale of goods.
b) During the course of our Audit no major weakness has been noticed in
the internal controls.
v) a) According to the information and explanations given to us, we are
of the opinion that the transactions 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 rupees five 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) During the year the company has not accepted any deposits from the
public and hence the provisions of section 58A and 58AA of the
Companies Act, 1956 and the Companies [Acceptances of Deposit Rules
1975] is not applicable.
vii) On the basis of Internal audit reports broadly reviewed by us, we
are of the opinion that, the coverage of Internal Audit functions
carried by a firm of Chartered Accountants appointed by the Management
is commensurate with the size of the Company and the nature of its
business.
viii) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the order made by the Central Government for the
maintenance of cost records under section 209(1)(d) of the Companies
Act, 1956 and are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have not,
however, made a detailed examination of the records with a view to
determine whether they are accurate or complete.
ix) a) According to the information and explanations given to us and
records examined by us, the company is regular in depositing undisputed
statutory dues including Provident Fund, Investor Education and
Protection Fund, Employees State Insurance, Income-tax, Tnvat, Wealth
tax, Service tax, Custom Duty, Excise Duty, Cess and any other
statutory dues with the appropriate authorities.
b) According to the information and explanations given to us, no
undisputed arrears of statutory dues were outstanding as at 31st March
2008 for a period of more than Six months from the date they became
payable.
c) The disputed statutory dues are as under:
Name of the Nature Amount
Statute of the [Rs.]
Dues
Employees Provident 7,75,781/-
Provident Fund 2,46,973/-
Fund (Damages)
Employees ESI 2,58,356/-
State (Damages)
Insurance
Period to Forum
which the where
amount dispute is
relates pending
1996 to 1999 Madras
1999-2000 High Court
EPF
Appellate
Tribunal,
New Delhi
1998-2000 ESI Court,
Coimbatore
x) The Company has accumulated losses of Rs. 379.77 lakhs at the end of
the financial year and it has not incurred cash loss during the year.
However, the company has incurred cash loss amounting to Rs. 1863.18
lakhs in the immediately preceding financial year and its accumulated
losses exceeds the fifty percent of its net worth.
xi) The Company during the year had settled outstanding dues to the
secured creditors under one time settlement scheme (OTS) and hence
disclosure under this clause does not arise.
xii) During the year, the Company has not granted loans and advances on
the basis of security by way of pledge of shares, debentures and other
securities.
xiii) In our opinion the company is not a chit fund or a nidhi/mutual
benefit fund/ society. Therefore, clause 4 (xiii) of the Companies
(Auditors Report) order 2003 is not applicable to the Company.
xiv) In our opinion and according to the information and explanation
given to us, the Company is not dealing or trading in Shares,
Securities, debentures and other Investments.
xv) According to the information and explanation given to us, the
company, during the year has not given any guarantee for loans taken by
others from banks.
xvi) The company has not availed any term loans from banks or financial
institutions during the financial year.
xvii) According to the information and explanations given to us and on
an overall examination of the Balance sheet of the company, we report
that no funds raised on short time 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 any debentures during the financial
year and hence creation of security in respect of debentures does not
arise.
xx) The company has not raised any money through a public issue during
the year.
xxi) Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our
audit.
For M.S.JAGANNATHAN & VISVANATHAN,
Chartered Accountants
M.J.VIJAYARAAGHAVAN,
Chennai Partner
01.09.2008 Membership No.7534 | 