To the Members of Sri Ramakrishna Mills (Coimbatore) Limited Report on the FinancialStatements
We have audited the accompanying financial statements of Sri Ramakrishna Mills(Coimbatore) Limited(the Company') which comprise the Balance Sheet as at 31stMarch 2017 the Statement of Profit and Loss and the Cash Flow Statement for the yearended and a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. 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 accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement. An audit involves performing procedures to obtain audit evidence about theamounts and the disclosures in the financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company's preparation ofthe financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances. An audit also includes evaluatingthe appropriateness of the accounting policies used and the reasonableness of theaccounting estimates made by the Company's Directors as well as evaluating the overallpresentation of the financial statements. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2017 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 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters specified in the paragraph3 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 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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;
(d) In our opinion the aforesaid financial statements comply with the AccountingStandards 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 31March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 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 be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed its pending litigations in Note No 27 under additionalinformation.
ii. The Company does not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses iii. As the Company has not declaredany dividends in the earlier years transferring of dividendsto Investor Education andProtection Fund does not arise. iv. The Company has provided requisite disclosures in itsfinancial statements as to holdings as well as dealings in Specified Bank Notes during theperiod from 8th November2016 to 30th December2016 and these are in accordance with thebooks of accounts maintained by the Company.
Annexure to the Independent Auditors' Report
The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the financial statements for the year ended 31st March 2017 we report that:
1 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 period andno material discrepancies were noticed on such verification. In our opinion thisperiodicity of physical verification is reasonable having regard to the size of to theCompany and the nature of its assets.
c According to the information and explanations given to us and the records examined byus and based on the examination of the registered sale deed provided to us we reportthat the title deeds comprising all the immovable properties which are freehold areheld in the name of the company as at the balance sheet date. Immovable properties ofwhose title deeds have been pledged as security for borrowings taken from Banks are heldin the name of the Company based on the confirmations received from Banks.
2 a As explained to us inventories have been physically verified by the management atregular intervals during the year. b In our opinion and according to the information andexplanations given to us the procedures of physical verification of inventories followedby the management are reasonable and adequate in relation to the size of the company andthe nature of its business. c In our opinion and according to the information andexplanations given to us the company has maintained proper records of its inventories andno material discrepancies were noticed on physical verification as compared to the bookrecords.
3 During the year the company has not granted any loan secured or unsecured tocompanies firms or other parties covered in the register maintained under section 189 ofthe Companies Act 2013 and hence Clause (b) and (c) are not applicable.
4 During the year Company has not made any loans or investments or given anyguarantees and hence disclosure under this clause related to compliance with theprovisions of Section 185 and 186 of the Act does not arise.
5 The company has not accepted any deposits from the public and as such clause 3(v) ofthe Order is not applicable.
6 We have broadly reviewed the cost records maintained by the company specified by theCentral Government under sub-section (1) of Section 148 of the Companies Act 2013 asapplicable to the company and are of the opinion that prima facie the specified costrecords have been maintained. We have however not made a detailed examination of thecost records with a view to determine whether they are accurate or complete.
7 a According to the information and explanations given to us the company is regular indepositing undisputed statutory dues including Provident Fund Employees' State insuranceIncome tax Service Tax value added tax and any other statutory dues with theappropriate authorities during the year.However the company is yet to remit TDS inrespect of few months with the appropriate authorities within the due date.
According to the information and explanations given to us no undisputed amountspayable in respect of the aforesaid dues were outstanding as at 31st March 2017 for aperiod of more than six months from the date they became payable. b According to theinformation and explanations given to us the statutory dues which have not been depositedon account of dispute are as follows:
|Name of the Statute ||Nature of the Dues ||Amount [Rs.] ||Period to which the amount relates ||Forum where dispute is pending |
| || ||(in lakhs) || || |
|TNGST ||Addl. Sales tax ||7.43 ||A.Y.2004-05 to A.Y.2006-07 ||Madras High Court |
|TNGST ||Sales tax ||54.59 ||A.Y.1995-96 ||Madras High Court |
|TNGST ||Sales tax ||89.37 ||A.Y.1999-00 ||Madras High Court |
|TNGST* ||Sales Tax ||61.66* ||A.Y.1998-99 ||Madras High Court |
|TNGST ||TNGST AST ||121.97 ||A.Y.2000-01 ||Madras High Court |
|Customs ||Customs duty on Cotton ||8.26 ||A.Y.2003-04 ||Madras High Court |
|APEB ||Fuel Surcharge adjustment ||3.20 ||July 2012 and November 2012 ||AP High Court |
* [Rs.31 lakhs since paid]
8 In our opinion and according to the information and explanation given to us thecompany has not defaulted in repayment of dues to any of the banks.
9 The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year. Accordingly clause 3(ix) of the Order is not applicable.
10 To the best of our knowledge and belief and according to the information andexplanations given to us no fraud on or by the company was noticed or reported during theyear that causes the financial statements to be materially misstated.
11 According to the information and explanations give 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.
12 In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly clause 3(xii) of the Order is not applicable.
13 According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
14 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.
15 According to the information and explanations given to us and based 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.
16 The Company is not required to be registered under section 45-1A of the Reserve Bankof India Act 1934.
Annexure B to the Auditors' Report
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 SriRamakrishna Mills (Coimbatore) Limited as of 31st March 2017 in conjunction with our auditof the standalone financial statements of the Company for the period ended on that 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'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
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 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 auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's internal financial controls system over financialreporting.
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.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For M.S. Jagannathan and Visvanathan |
| ||Chartered Accountants |
| ||Firm Regd No: 001209 S |
| ||M.V. JEGANATHAN |
|Place: Coimbatore ||Partner |
|Date : 30-05-2017 ||M. No. 214178 |