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Rajapalayam Mills Ltd.

BSE: 532503 Sector: Industrials
NSE: RAJPALAYAM ISIN Code: INE296E01026
BSE LIVE 15:40 | 12 Dec 1185.90 9.15
(0.78%)
OPEN

1179.00

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1190.00

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1142.00

NSE 00:00 | 29 Jan Stock Is Not Traded.
OPEN 1179.00
PREVIOUS CLOSE 1176.75
VOLUME 1372
52-Week high 1250.00
52-Week low 510.15
P/E 21.78
Mkt Cap.(Rs cr) 875
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1179.00
CLOSE 1176.75
VOLUME 1372
52-Week high 1250.00
52-Week low 510.15
P/E 21.78
Mkt Cap.(Rs cr) 875
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Rajapalayam Mills Ltd. (RAJPALAYAM) - Auditors Report

Company auditors report

TO SHAREHOLDERS

INDEPENDENT AUDITOR'S REPORT

To the Members of M/s. Rajapalayam Mills Limited

Report on the Separate Ind AS Financial Statements

We have audited the accompanying separate Ind AS financial statements of RajapalayamMills Limited ('the Company') which comprise the balance sheet as at 31st March 2017the statement of profit and loss (including other comprehensive income) the statement ofcash flows and the statement of changes in equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information (herein afterreferred to as "Separate Ind AS financial statements").

Management's Responsibility for the Separate Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese separate Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) prescribed underSection 133 of the Act read with relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the separate IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these separate Ind AS financialstatements based on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe separate Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the separate Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the separate Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the separate Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the separate Ind AS financialstatements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide 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 explanationsgiven to us the aforesaid separate Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thefinancial position of the Company as at 31st March 2017 and its financial performanceincluding other comprehensive income its cash flows and the changes in equity for theyear ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act we givein the Annexure A a statement on the matters specified in the paragraph 3 and 4 of theorder.

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 bestof 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 theCompany 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 flowsand the statement of changes in equity dealt with by this Report are in agreement with thebooks of account;

(d) in our opinion the aforesaid separate Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with relevant rule issuedthereunder;

(e) on the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164 (2) of the Act;

(f) with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and (g) with respect to the other matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 in our opinion and to the best of our information and according tothe explanations given to us:

i. the Company has disclosed the impact of pending litigations on its financialposition in its separate Ind AS financial statements - Refer Note No.39 (iii) and (iv) tothe separate Ind AS financial statements;

ii. the Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative 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 tothe Investor Education and Protection Fund by the Company; and iv. the Company hasprovided requisite disclosures in its separate Ind AS financial statements as to holdingsas well as dealings in Specified Bank Notes during the period from 8th November 2016 to30th December 2016 and these are in accordance with the books of accounts maintained bythe Company.

Refer Note No.49 to the separate Ind AS financial statements.

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.

"ANNEXURE - A" TO THE INDEPENDENT AUDITORS' REPORT - 31ST MARCH 2017(Referred to Paragraph 1 under the heading of - "Report on other Legal and RegulatoryRequirements" of our report of even date)

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and natureof its assets.

(c) According to the information and explanations given to us on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(ii) The inventories except goods in transit have been physically verified by themanagement at reasonable intervals during the year. In our opinion the frequency of suchverification is reasonable. In respect of inventories lying with third parties these havesubstantially been confirmed by them. The discrepancies noticed on verification betweenthe physical stocks and book records were not material.

(iii) The Company has granted loan to one body corporate covered in the registermaintained under Section 189 of the Companies Act 2013.

(a) In our opinion the rate of interest and other terms and conditions on which theloan had been granted to the body corporate listed in the register maintained underSection 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 registermaintained under Section 189 of the Act the borrowers have been regular in the payment ofinterest as stipulated. The terms of arrangements do not stipulate any repayment scheduleand the loan is repayable on demand. Accordingly paragraph (iii) (b) of the Order is notapplicable 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 corporatelisted in the register maintained under Section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act with respectto the loans investments guarantees and security made.

(v) The Company has not accepted any deposits within the meaning of Section 73 to 76 ofthe 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 Act2013 has specified maintenance of cost records for the Company and such accounts andrecords have been made and maintained by the Company.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company is regular in depositingundisputed statutory dues including provident fund employees' state insurance incometax sales tax service tax duty of customs duty of excise value added tax cess andany other statutory dues with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax service tax duty of customsduty of excise value added tax cess and other statutory dues were in arrears as at 31stMarch 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 ofservice 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 financialinstitutions or bank. The Company did not have any loans or borrowings from the governmentor borrowings by way of debentures.

(ix) The Company has not raised any money by way of initial public offer (includingdebt instruments).

The moneys raised by way of Term Loans were applied for the purposes for which theywere raised.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable to the Company.

(xiii) According to information and explanations given to us and based on ourexamination of the records of the Company transactions with related parties are incompliance with Sections 177 and 188 of the Act where applicable. The details of suchrelated party transactions have been disclosed in the separate financial statements asrequired by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

(xv) According to the information and explanations given to us and base on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with Directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable to the Company.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable 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.

"Annexure - B" to the Independent Auditor's Report of even date on theFinancial Statements of Rajapalayam Mills Limited

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of RajapalayamMills Limited ("the Company") as of 31st March 2017 in conjunction with ouraudit of the Separate Ind AS financial statements of the Company for the year ended onthat date

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under Section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls and both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the Separate Ind AS financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany'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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe 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 explanationsgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at March 31 2017 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

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
25th May 2017.