The Members of
Tamilnadu Jai Bharath Mills Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Tamilnadu Jai Bharath MillsLimited which comprise the Balance Sheet as at March 31 2017 and the Statement ofProfit and Loss and Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 with respect to the preparation of these financialstatements that give a true and fair view of the financial position financial performanceand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Accounting Standards specified under Section 133 of theAct 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 of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgements 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 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 financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditors judgement including the assessment of the risks of material misstatementof the financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to theCompanys preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of the accounting policies usedand the reasonableness of the accounting estimates made by the Companys Directorsas well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
Emphasis of Matter:
a. We draw attention to Note No.I-7 to the financial statements which deal with nonprovisioning of Gratuity in compliance with AS15 issued by ICAI.
b. We draw attention to Note No. II-9 to the financial statements which deals withDeposit accepted from Shareholders without complying with the provisions of Companies Act2013 and Companies (Acceptance of Deposit) Amendment Rules 2016.
c. Also we draw attention to Note II-10 to the financial statements which indicatethat the company has accumulated losses and substantial erosion of Net Worth in additionto cash losses in the current and previous years. These conditions indicate the existenceof a material uncertainty that may cast significant doubt about the companys abilityto continue as a going concern. However the financial statements of the company have beenprepared on a going concern basis for the reasons stated in the said note. Our opinion isnot modified in respect of these matters.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
a) In the case of the Balance Sheet of the state of affairs of the Company as at March31 2017;
b) In the case of the Statement of Profit and Loss of the loss for the year ended onthat date; and
c) In the case of the Cash Flow Statement of the cash flows for the year ended on thatdate.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 issued by theCentral Government of India in terms of sub-section (11) of section 143 of The CompaniesAct 2013 we give in the Annexure a statement on the matters specified in paragraphs 3 and4 of the Order.
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 purpose 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 and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus.
c) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with Accounting Standardsspecified under section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014 except Accounting Standard 15 as detailed in Note No .7.
e) On the basis of written representations received from the directors as on March 312017 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2017 from being appointed as a director in terms of Section 164(2) of theAct.
f) With respect to the other matters to be included in the Auditors 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 the impact of pending litigations on its financialposition in its financial statements Refer to Note I-8 to the financial statements
ii) the company does not have any long-term contracts including derivative contracts requiring a provision for material foreseeable losses.
iii) the company does not have any amounts required to be transferred to the InvestorEducation and Protection Fund.
iv) the Company has provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30 December 2016 and these are in accordance with the books of accountsmaintained by the Company. Refer Note II- 8 to the financial statements.
| ||For M/s.Krishnan and Raman |
|Place: Rajapalayam ||Chartered Accountants |
|Date: 25.05.2017 ||FRN:01515S |
| ||V. Srikrishnan |
| ||M.No.206115 |
ANNEXURE TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE FINANCIALSTATEMENTS OF TAMILNADU JAI
BHARATH MILLS LIMITED
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013
We have audited the Internal Financial Controls over financial reporting of TamilnaduJai Bharath Mills Limited as of March 31 2017 in
conjunction with our audit of the financial statements of the Company for the yearended on that date.
Managements Responsibility for Internal Financial Controls
The companys 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.
These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to companys policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Companys 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 Reportingand the Standards on Auditing issued by ICAI and deemed to be prescribed under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls both applicable to an audit of Internal Financial Controls and bothissued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects. Our audit involves performing procedures to obtainaudit evidence about the adequacy of the internal financial controls system over financialreporting and their operating effectiveness. Our audit of internal financial controls overfinancial reporting included obtaining an understanding of internal financial controlsover financial reporting assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditors judgment includingthe assessment of the risks of material misstatement of the financial statements whetherdue to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companys internal financial control overfinancial reporting includes those policies and procedures that
1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company.
2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorizations of management and directors of the Company; and
3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the Companys assets that could havea 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 March 31 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.
|Place: Rajapalayam ||For M/s.Krishnan and Raman |
|Date: 25.05.2017 ||Chartered Accountants |
| ||FRN:01515S |
| ||V. Srikrishnan |
| ||M.No.206115 |
Annexure referred to in paragraph 1 of our Report of even date to the members ofTamilnadu Jai Bharath Mills Limited on the accounts of the Company for the year ended31stMarch 2017
In terms of Companies (Auditors Report) Order 2016 issued by Central Governmentof India in terms of Section 143(11) of The Companies Act 2013 we further report onthe matters specified in paragraph 3 and 4 of the said Order that: -
1. FIXED ASSETS
i) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
ii) As explained to us all fixed assets have been physically verified by themanagement at reasonable intervals during the year which in our opinion is reasonablehaving regard to the size of the company and nature of its assets. No material discrepancywas noticed on such physical verification.
iii ) According to the information and explanations given to us and on the basis of ourexamination of the records of the company the title deeds of immovable properties areheld in the name of the company.
The management has conducted physical verification of its inventories at reasonableintervals during the year. No material discrepancies were noticed during suchverification.
3. LOANS TO PARTIES LISTED U/S 189 OF THE ACT
The Company has not granted any loans secured or unsecured to parties covered inregister maintained under Section 189 of The Companies Act 2013.
4. COMPLIANCE WITH SECTIONS 185 & 186 OF THE ACT
i) In connection with matters specified u/s 185 of the act the Company has notadvanced any loans directly or indirectly to any of its directors or to any other personin whom the directors are interested or has given any guarantee or provided security inconnection with any loan taken by any other person.
ii) The company has not made any investments in any other companies within the meaningof section 186(1) of the act.
iii) In connection with matters specified under section 186(2) of the act the companyhas not advanced any loans directly or indirectly to any person or body corporate orhas given any guarantee or provided security in connection with any loan taken by anyother body corporate or any other person or acquired any securities of companies in excessof limits stipulated .
5. The Company has not accepted any deposits from the public.
6. We have broadly reviewed the accounts and records of the company in this connectionand we are of the opinion that prima facie the prescribed accounts and records have beengenerally made and maintained. We have not however made a detailed examination of thesame.
7. STATUTORY DUES
i) According to the records maintained by the company and the information andexplanations given to us the company has been generally regular in depositing undisputedstatutory dues including provident fund income tax sales tax value added tax duty ofcustoms service tax cess.
ii) According to the records maintained by the company and the information andexplanations given to us there were no arrears of undisputed statutory dues in respectof provident fund income tax sales tax value added tax duty of customs service taxcess which remained outstanding as at 31st March 2017 for a period of more than sixmonths from the date they became payable.
iii) According to the records of the company and the information and explanations givento us the disputed statutory dues pertaining to earlier years aggregating to Rs. 248.47lakhs on account of matters pending before appropriate authorities is as under and forwhich no provision had been made in the accounts.
|Nature of Due ||Forum where pending ||Period of dispute ||Rs. In lakhs |
|Sales Tax ||STAT-Madurai ||1998-1999 ||1.45 |
|Sales Tax ||STAT-Madurai ||1999-2000 ||1.63 |
|Sales Tax ||ACCT-Chennai ||2003-2004 ||12.86 |
|Central Sales Tax ||Commissioner-Vnr ||2007-2008 ||20.57 |
|Central Sales Tax ||Commissioner-Vnr ||2008-2009 ||12.30 |
|Central Sales Tax ||Commissioner-Vnr ||2009-2010 ||8.98 |
|Central Sales Tax ||Commissioner-Vnr ||2011-2012 ||21.85 |
|Central Sales Tax ||Commissioner-Vnr ||2012-2013 ||6.68 |
|Central Sales Tax ||Commissioner-Vnr ||2014-2015 ||4.24 |
|Provident Fund ||High CourtMadurai ||Apr 09- Dec 09 ||56.48* |
|Provident Fund ||Appellate TribunalDelhi ||Jan 10 Jun11 ||99.07* |
|E.S.I. ||High Court Madurai ||Nov 06 Mar 07 ||2.36 |
| || ||Total ||248.47 |
* Out of a total sum of Rs.155.55 lakhs Rs.66.48 lakhs already deposited with PFAuthority under protest.
8. The Company has not defaulted in the repayment of any dues to a financialinstitution bank or government or debenture holders.
9. Term loans were utilized for the purposes for which they were obtained.
10. Based upon the audit procedures performed and information and explanations given tous by the management no fraud by the company or on the Company by its officers oremployees have been noticed or reported during the course of our audit.
11. According to the information and explanations given to us and based on ourexamination of the records of the company the company has not paid / provided for anymanagerial remuneration . Hence the provisions of section 197 read with Schedule V to theCompanies Act 2013 is not applicable.
12. The provisions of section 406(1) of the act do not apply to the company.
13. The transactions entered into with related parties are in compliance withrequirements of sections 177 & 188 of the act and the details have been disclosed inthe financial statements etc. as required by the applicable accounting standards.
14. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year.
15. The Company has not entered into any non-cash transactions with directors orpersons connected with directors during the year.
16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
| ||For KRISHNAN&RAMAN |
|Place: Rajapalayam ||Chartered Accountants |
| ||FRN-01515S |
|Date: 25.05.2017 ||V.SRIKRISHNAN |
| ||M.No.206115 |