INDEPENDENT AUDITOR
TO THE MEMBERS OF THE MYSORE TOBACCO COMPANY LTD
Report on the Financial Statements.
We have audited the accompanying financial statements of The Mysore Tobacco Company
Limited (" the Company ") which comprise the Balance Sheet as at March 31, 2014,
and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and
a summary of significant accounting policies and other explanatory information.
Managements Responsibility for the Financial statements.
Management is responsible for the preparation of these financial statements that give a
true and fair view of the financial position, financial performance and cash flow of the
Company in accordance with the Accounting Standards referred to in sub-section (3C) of
section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes
the design, implementation and maintenance of internal control relevant to the preparation
and presentation of the financial statements that give a true and fair view and are free
from material misstatement, whether due to fraud or error.
Auditors Responsibility.
Our responsibility is to express an opinion on these financial statements based on our
audit. We conducted our audit in accordance with the Standards on Auditing issued by the
Institute of Chartered Accountants of India. Those Standards require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers eternal control relevant to the Companys preparation and fair presentation of
the financial statements in order to design audit procedures that are appropriate in the
circumstances., but not for the purpose of expressing an opinion on the effectiveness of
the Companys internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Opinion.
In our opinion and to the best of our information and according to the explanations
given to us, the financial statements read together with accounting policies and notes
thereon, give the information required by the Act in the manner so required.without
considering the qualifications which are not quantified as mentioned in Annexure to this
report ,the effect of which could not be determined, subject to the Annexure to this
report, give a true and fair view in conformity with the accounting principles generally
accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the Company as at
March 31, 2014
b) in the case of the Profit and Loss Account, of the loss for the year ended on
that date.
c) in the case of the Cash flow Statement.of the Cash flow of the Company for the
year ended on that date.
Report on other Legal and Regulatory Requirements.
1 . As required by the Companies (Auditors Report) Order, 2003 as amended by the
Companies (Auditors 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 of India and
on the basis of such checks of the books and records of the Company as we considered
appropriate and according to the information and explanation given to us.we give in the
Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.
2. As required by section 227(3) of the Act, 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 purpose 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 and Statement of Profit and Loss Account and the Cash flow
Statement.dealt with by this Report are in agreement with the books of account.
d) in our opinion, the Balance Sheet and Statement of Profit and Loss Account and the
Cash flow Statement, dealt with by this report comply with the Accounting Standards
referred to in subsection (3C) of section 211 of the Companies Act, 1956,tothe extent
applicable subject to matters referred in Annexure to this Report.
e) on the basis of written representations received from the directors as on March 31,
2014, and taken on record by the Board of Directors, none of the directors is disqualified
as on March 31, 2014, from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956.
f) Since the Central Government has not issued any notification as to the rate at
which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it
issued any Rules under the said section, prescribing the manner in which such cess is to
be paid, no cess is due and payable by the Company.
|
V.S.RANGANATHA & CO |
|
Chartered Accountants |
|
FRN: 005909S |
|
Sd/- |
|
(V. S. RANG ANATHA) |
| Place: Bangalore |
Sole Proprietor |
| Date: 30th June 2014 |
Membership No 019163 |
The Annexure referred to in our Report of even date to the members of The Mysore
Tobacco Co Ltd , on the Financial Statements of the company for the year ended 31st
March, 2014.
On the basis of such checks as we considered appropriate and according to the
information and explanation given to us during the course of our audit, we report that:
1. (a) Ther Company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets.
(b) As explained to us, fixed assets have been physically verified by the
management at reasonable intervals; no material discrepancies were noticed on such
verification.
(c) In our opinion and according to the information and explanations given to us,
no fixed asset has been disposed during the year.
2. The Company does not carry Inventories as at Balance sheet date and therefoe.the
clauses pertaining to Inventories are not applicable to the Company.
3. (a) According to the information and explanations given to us and on the basis
of our examination of the books of account, the Company has not granted any loans, secured
or unsecured, to companies, firms or other parties listed in the register maintained under
section 301 of the Companies Act, 1956. Consequently, the provisions of clauses iii (b),
iii(c) and iii (d) of the order are not applicable to the Company.
(b) According to the information and explanations given to us and on the basis of
our examination of the books of account, the Company has taken Unsecured loans aggregating
to Rs 90,00,000 in the years July 1981 & Aug 1982 from Kamataka Agro Industries
Corporation Limited (KAICL) at a rate of interest of 9.75 % p.a.
(c) The Terms and conditions of unsecured loans taken by the Company is prima facie
not Prejudicial to the interest of the Company.
(d) There was no repayment of the principal amount during the year
(e) The loans referred to in (b) above were overdue as per details given below.
| Name of the party |
Nature of Relationship Rs |
Opening Balance Rs |
Loan taken /Int Accrued Rs |
Repayment during the year Rs |
Closing Balance Rs |
| Govt, of Karnataka Through KAICL |
Holding ** Company |
90,00,000 |
— |
— |
90,00,000 |
| Accrued Interest on above KAICL Loan payable to Govtof kamataka |
Holding Company |
12,43,82,571 |
59,24,472 |
— |
13,03,07,043 |
** at the time of taking loan
4 .In our opinion and according to the information and explanations given to us,
the Company has closed its operations since 19th Sept 1984,from there onwards
no activities of purchase and sales have taken place. Hence, we report that question of
adequacy of internal control procedure and continuing failure to correct major weakness
does not arise.
5 (a) Based on the audit procedures applied by us and according to the information
and explanations provided by the management, there are no such contracts or arrangements
referred to in section 301 of the Act, that need to be entered in the register required to
be maintained under that section.
(b) As per information & explanations given to us and in our opinion, there are
no such transactions made in pursuance of such contracts or arrangements and exceeding the
value of rupees five lakshs in respect of any party during the year that have been made at
prices which are not reasonable having regards to the prevailing market prices at relevant
time.
6. The Company has not accepted any deposits from the public covered under section
58A & 58AA of the Companies Act, 1956. and the rules framed there under
7. The Company does not have an internal audit system commensurate with its size
and the nature of its business.
8.. As per information and explanation given by the management, the Central Govt has
not Prescribed the maintenance of Cost records under clause (d) of sub-section (1) of
section 209 of the Companies Act 1956 for the products of the Company.
9 (a) According to the records of the company, undisputed statutory dues including
Provident Fund, Investor Education and Protection Fund, Employees State Insurance,
Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the
extent applicable and any other statutory dues have generally been regularly deposited
with the appropriate authorities. According to the information and explanations given to
us there were no outstanding statutory dues as on 31s1 of March, 2014 for a
period of more than six months from the date they became payable.
(b) According to the information and explanations given to us, there are no amounts
payable in respect of income tax, wealth tax, service tax, sales tax, customs duty and
excise duty which have not been deposited on account of any disputes.
10. The Companys accumulated losses at the end of the year is Rs 14,54,78,815 .The
Company has incurred cash losses during the financial year ended 31s1 March
2014 covered by our audit and also in the immediately preceding financial year. The
Accumulated losses and Cash losses have been computed after considering the qualifications
in the audit report for the year ended March 31,2014 and March 31,2013 that were
quantified.
|
31-03-2014 |
31-03-2013 |
|
Rs |
Rs |
| Net Loss for the year |
33,03,811 |
35,38,367 |
| Add: Depreciation |
48,755 |
56,096 |
| Cash Loss |
32,55,056 |
34,82,271 |
11. Based on our audit procedures and on the information and explanations given by
the management, the Company has not taken any loan from any Financial institutions or
Banks and it has not issued any Debentures, but has defaulted in repayment of of Loans due
to Govtof Karnataka as at the balance Sheet date as per details given below:
| Details of Loan |
Principal Amount |
Rate of Interest Rs |
Repayment Schedule Rs |
Repayment upto 31.3.14 Rs |
Balance Payable |
| Soft loan thro Karnataka Agra Industries Corpn. Ltd. |
75,00,000 |
9.75 % |
8 Equal instalments ending on 30.7.1989 |
NIL |
75,00,000 |
| Soft loan thro Dept of Agriculture & Animal Husbandry |
45,00,000 |
9.75% |
8 Equal Instalments ending on 9-9-1990 |
30,00,000 |
15,00,000 |
| Term Loan |
|
|
|
|
|
| under Central GovtVFC Development Scheme |
12,77,059 |
6.00% |
As and when the amount is received from Farmers |
NIL |
12,77,059 |
| Term loan through . Agricultural and Animal Husbandry |
100,00,000 |
.6.25% |
Before 31.03.1984 |
49,00,000 |
51,00,000 |
The Company had received Unsecured Loan from Govt of Karnataka (GOK) under Central Govt
VFC Development Scheme during financial year ended 31st March 1982 of Rs
12,77,059 at an Interest rate of6 % p.a.*The total amount payable including Accrued
Interest aggregated to Rs 45,21,458 (2013: Rs 44,44,834 ) which includes Rs 32,44,399
(2013: Rs 31,67,775) interest accrued and due and repayment of principal amount of Rs
12,77,059 (2013: Rs 12,77,059) fallen due, to the GOK , which is subject to recovery as
arrears of land revenue in case of default. Since the said amounts have already become
overdue causing defaultthe Governament has Lein over Companys ssets for the said loans
under the recovery procedure of Land Revenue.
Non Provision of Penal Interest aggregated to Rs 14,89,623 (2013: Rs 14,89,623) upto 31st
March 1987 on the above loan.Further.the penal Interest is not calculated for subsequent
years also including the year under audit 2013-14,as a result ,the loss for the year is
understated to this extent.
12. According to the information and explanations given to us, the Company has not
granted any loans and advances on the basis of security by way of pledge of shares,
debentures and other securities.
13. The Company is not a chit fund or a nidhi /mutual benefit
fund/society.Therefore, the provision of this clause of the Companies (Auditors Report)
Order, 2003 (as amended) is not applicable to the Company.
14. According to information and explanations given to us, the Company is not
dealing or trading in Shares, Mutual funds,Debentures & other Investments.
15. According to the information and explanations given to us, the Company has not
given any guarantees for loan taken by others from a bank or financial institutions during
the year.
16. Based on our audit procedures and on the information given by the management,
we report that the company has not raised any term loans during the year.
17. Based on the information and explanations given to us and on an overall
examination of the Balance Sheet of the Company as at 31st March, 2014, we
report that no funds raised on short-term basis have been used for long-term investment by
the Company.and vice-versa.
18. Based on the audit procedures performed and the information and explanations
given to us by the management, we report that the Company has not made any preferential
allotment of shares to the parties and Companies covered in the register maintained Under
Sec 301 of the Act during the year.Therefore.the clause pertaining to Preferential
allotment of shares is not applicable to the Company.
19. The Company has not issued debentures Therefore.the clause pertaining to
Debenturesls not applicable to the Company.
20. The Company has not raised any money through public issue. Hence the clause
pertaining to the public issue is not applicable to the Company
21. Based on the audit procedures performed and the information and explanations
given to us, we report that no fraud on or by the Company has been noticed or reported
during the year, nor have we been informed of such case by the management.
|
V.S.RANGANATHA& CO |
|
Chartered Accountants |
|
FRN: 005909S |
|
Sd/- |
|
(V.S.RANGANATHA) |
| Place: Bangalore |
Sole Proprietor |
| Date: 30th June 2014 |
Membership No 019163 |
COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 619(4) OF THE
COMPANIES ACT, 1956 ON THE ACCOUNTS OF THE MYSORE TOBACCO COMPANY LIMITED, BANGALORE FOR
THE YEAR ENDED 31 MARCH 2014.
The preparation of financial statements of The Mysore Tobacco Company Limited,
Bangalore, for the year ended 31 March 2014 in accordance with the financial
reporting framework prescribed under the Companies Act, 1956 is the responsibility of the
management of the Company. The statutory auditors appointed by the Comptroller and Auditor
General of India under Section 619 (2) of the Companies Act, 1956 are responsible for
expressing opinion on these financial statements under Section 227 of the Companies Act,
1956 based on independent audit in accordance with the auditing and assurance standards
prescribed by their professional body the Institute of Chartgered Accountants of India.
This is stated to have been done by them vide their Audit Report dated 30th
June 2014.
I on behalf of the Comptroller and Auditor General of India have decided not to review
the report of the Statutory Auditors on the accounts of "The Mysore Tobacco
Company Limited, Bangalore" for the year ended 31 March 2014 and as such
have no comments to make under section 619 (4) of the Companies Act, 1956.
|
For and on behalf of the |
|
Comptroller & Auditor General of India |
|
Sd/- |
|
(D.J.BHADRA) |
|
Pr.ACCOUNTANT GENERAL |
| BANGALORE |
(GENERAL & SOCIAL SECTOR AUDIT) |
| Dated: 25th July 2014 |
KARNATAKA, BANGALORE |
+91-9892691696
