TAMARAI MILLS LIMITED
ANNUAL REPORT 2007-2008
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
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
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
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,
Membership No.: 7534
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
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
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
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
Employee's Provident 7,75,781/- 1996 to 1999 Madras
Provident Fund 2,46,973/- 1999-2000 High Court
Fund (Damages) EPF
Employees ESI 2,58,356/- 1998-2000 ESI Court,
State (Damages) 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
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
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
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,
Membership No.: 7534
Date : 01.09.2008