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Tamarai Mills Ltd.

BSE: 531443 Sector: Industrials
NSE: N.A. ISIN Code: N.A.
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Tamarai Mills Ltd. (TAMARAIMILLS) - Auditors Report

Company auditors report

TAMARAI MILLS LIMITED ANNUAL REPORT 2007-2008 AUDITORS' REPORT 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 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 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 [Auditor's Report] Order, 2003, and as amended by the Companies (Auditor's 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; and 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; and For M.S. JAGANNATHAN & VISVANATHAN, M.J. VIJAYARAAGHAVAN, Partner Chartered Accountants Membership No.: 7534 Place: Chennai Date : 01.09.2008 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 Period to Forum Statute of the [Rs.] which the where Dues amount dispute is relates pending Employee's Provident 7,75,781/- 1996 to 1999 Madras Provident Fund 2,46,973/- 1999-2000 High Court Fund (Damages) EPF Appellate Tribunal, New Delhi Employees ESI 2,58,356/- 1998-2000 ESI Court, State (Damages) Coimbatore Insurance 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, M.J. VIJAYARAAGHAVAN, Partner Chartered Accountants Membership No.: 7534 Place: Chennai Date : 01.09.2008