| We have audited the accompanying financial statements of THAMBBI
MODERN SPINNING 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 Policiesand other explanatory
information.
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 flowsof the Company in accordance with the accounting
principles generally accepted in India, including theAccounting
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 inaccordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventingand detecting frauds and other irregularities; selection
and application of appropriate accountingpolicies; making judgments and
estimates that are reasonable and prudent; and design,
implementationand maintenance of adequate internal financial controls,
that were operating effectively for ensuringthe accuracy and
completeness of the accounting records, relevant to the preparation and
presentationof the financial statements that give a true and fair view
and are free from material misstatement,whether due to fraud or error.
Auditors' 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 theRules 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 theaudit to
obtain reasonable assurance about whether the financial statements are
free from materialmisstatement.
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 dueto fraud or error. In making those risk
assessments, the auditor considers internal financial controlrelevant
to the Company's preparation of the financial statements that give a
true and fair view in orderto design audit procedures that are
appropriate in the circumstances, but not for the purpose ofexpressing
an opinion on whether the Company has in place an adequate internal
financial controlssystem over financial reporting and the operating
effectiveness of such controls. An audit also includesevaluating the
appropriateness of the accounting policies used and the reasonableness
of theaccounting estimates made by the Company's Directors, as well
as evaluating the overall presentation ofthe financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis forour 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, its Loss and its cash flows for the year ended on
that date.
Emphasis of Matters
We draw attention to the following matters in the Notes to the
financial statements of the Company, which describes the uncertainty
related to the outcome of the law suit filed against the Company.
Note no 6.2 regarding non ascertainment of overdue amounts and
non-provision of interest due if any, due to micro, small and medium
enterprises.
Report on Other Legal and Regulatory Requirements
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 sub-section 11 of Section 143 of the
Companies Act, we give in the Annexure a statement on the matters
specified in Paragraph 3 of the Companies (Auditors Report) Order 2015.
(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 Company has disclosed the impact of pending litigations on its
financial position.
Note no 10.4 in respect of demand of Rs 98.76 lakhs raised by assistant
commissioner of income tax and pending before ITAT
ii. The Company does not have any long-term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. As per the information and explanation furnished to us, there is
no amount required to be transferred to investor education and
protection fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules made there under.
Annexure to the Auditors' Report
The Annexure referred to in our report to the members of THAMBI MODERN
SPINNING MILLS LTD for the year Ended on 31st March 2015. We report
that:
S.No. Particulars
(i) (a) The company has maintained proper records showing full
particulars including quantitative details and situation of its fixed
assets.
(b) The management has physically verified the fixed assets of the
company during the year. No material discrepancies were noticed on such
verification.
(ii) Since the company does not have any inventory at the end of the
year, the clause ii(a)(b)and(c) are not applicable.
(iii) The company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 189 of the Companies Act.
(iv) In our opinion and according to the information and explanation
given to us, there exists an adequate internal control system
commensurate with the size of the company and the nature of its
business, for the purchase of fixed assets and for rendering of
services. The activities of the company do not involve purchase of
inventory and sale of goods. During the course of our audit, we have
not observed a continuing failure to correct major weaknesses in
Internal Control System.
(v) According to the information and explanation given to us, the
Company has not accepted any deposits from the Public.
(vi) According to the information and explanation given to us, the
Central Government has not prescribed the maintenance of cost records
under Sub- section 1 of Section 148 of the Companies Act, 2013.
(vii) (a) 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 any other statutory dues with the
appropriate authorities to the extent applicable and there are no
arrears of outstanding statutory dues as at the last day of the
financial year concerned for a period of more than six months from the
date they became payable.
b)According to the information and explanation given to us and as per
the records of the Company examined by us, the disclosed amount are not
paid on account of pending dispute
1) Entry tax on purchase of car amounting to Rs 4.65 lakhs pending
before the high court of Chennai.
2) Sales tax dues amounting to Rs 712 lakhs pending before sales tax
tribunal.
3) Income tax due of Rs 98.76 lakhs for AY 2011-12 which is contested
and pending before CIT (Appeals).
(c) as per the information and explanation furnished to us, there is no
amount required to be transferred to investor education and protection
fund in accordance with the relevant provisions of the Companies Act,
1956 (1 of 1956) and rules made there under.
(viii) The Company has accumulated losses at the end of the Financial
Year and it has incurred cash losses in the Financial Year and in the
immediately preceding Financial Year.
(ix) The company has not defaulted in repayment of dues to a financial
institution or bank or debenture holders.
(x) The company has not given any guarantee for loans taken by others
from bank or financial institutions, the terms and conditions whereof
are prejudicial to the interest of the company.
(xi) The Company has availed term loan during the Financial Year and
applied the same for the purpose for which the loans were obtained.
(xii) During the course of our examination of books of account and
records of the Company carried out in accordance with the generally
accepted auditing practices in India, we have not come across any fraud
on or by the company, noticed or reported during the year, nor have
been informed of such case by the management.
for Sankaran & Krishnan
Chartered Accountants
FRN 003582S
M.Balachandran
Partner
Place : Salem Membership number: 016271
Date : 28.05.2015
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