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Auditor Report of Adinath Textiles Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of ADINATH TEXTILES LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the 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 Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. 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 the disclosures in the financial statements. The procedures selected depend on the auditor's 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 internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, 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 on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, 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 (Audit Report) Order, 2015 ("the order"), issued by central government of India in terms of sub-section (11) of section 143 of the Companies act, 2013, we give in Annexure a statement on the matters specified in paragraphs 3 and 4 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 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 it appears from our examination of those books.

c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards 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 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 financial statements as referred to in Note No. 27 to the financial statements.

ii. The Company did not have any long-term contracts including derivative contracts on which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the investor Education and Protection Fund by the Company.

Annexure to the Auditors' Report

The Annexure referred to in our report to the members of Adinath Textiles Limited ('the Company') for the year ended 31 March 2015.

We report that:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(ii) (a) The inventory has been physically verified during the year, by the management. In our opinion the frequency of verification is reasonable.

(b) The procedure of physical verification of inventories followed by the management, are reasonable & adequate in relation to the size of the company & the nature of business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks & the book records were not material.

(iii) (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 189 of the Companies Act, 2013. Consequently, the provisions of clauses iii (b) and iii (c) of paragraph 3 of the order are not applicable to the Company.

(iv) In our opinio n and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and sale of services. The activities of the Company do not involve purchase of inventory and the sale of goods. We have not observed any major weakness in the internal control system during the course of the audit.

(v) In our opinion and according to the information and explanations given to us, the company has not accepted deposit with the provisions of sections 73 to 76 or any other relevant provisions of the Act. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal. Therefore, the provisions of clause (v) paragraph 3 of the Companies (Auditor's Report) Order, 2015, are not applicable to the company.

(vi) As per information & explanation given by the management, maintenance of cost records is not required to be maintained as required as per Rule 3 of Companies (Cost Records and Audit) Amendment Rules, 2014.

(vi i) (a) According to the information and explanations give n to us, following are the undisputed amounts payable in respect of Statutory dues including Provident Fund, Sales-tax, are in arrears as at 31 March 2015 for a period of more than six months from the date they became payable.

Nature of Dues Amount in (Rs.)

Sales Tax 2277956

Entry Tax 237798

Interest on PF/ESI/ Sales Tax 1847720

(b) According to the information and explanations given to us, the disputed statutory dues aggregating to Rs. 1500000/- that have not been deposited on account of matters pending before the appellate authorities in respect of custom duty and excise duty are as follows.

Sr. Forum where Nature Disputed No. dispute is pending of Dues Amount (Rs.)

1. Commissioner Central Penalty 10,00,000** Excise & Customs, Chandigarh

** Note: However Rs. 500000/- has been deposited under protest.

(c) According to the information and explanations given to us, there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under.

(viii) In our opinion and according to the information and explanations given to us, the Company does not have accumulated losses at the end of the financial year and have not incurred cash losses in the financial year and in the immediately preceding financial year.

(ix) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(x) Based on our examination of documents and records and 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.

(xi) The Company did not have any term loans outstanding during the year.

(xii) According to the information and explanations given to us, no material fraud on or by the company has been noticed or reported during the course of our audit.

For DASS KHANNA & Co.

Chartered Accountants Firm's Reg. No. 000402N

Place : Ludhiana CA RAKESH SONI Date : 28-05-2015 Partner Membership No. 083142


Mar 31, 2014

We have audited the accompanying financial statements of Adinath Textiles limited ("the Company"), which comprises 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

Management''s 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 flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (the "Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s 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 auditor''s 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 internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. 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 give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2014; (ii) in the case of the Profit and Loss Statement, of the profit for the year ended on that date; and

(iii) in the case of the Cash Flow Statement, of the 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, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, 1956 and sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the 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, Profit and Loss Statement and Cash Flow Statement dealt with by this Report are in agreement with the books of account and records;

d) In our opinion, the Balance Sheet, Profit and Loss Statement and Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

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, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956 and sub-section 164 of the Companies Act, 2013.

Annexure to the Auditors'' Report The Annexure referred to in our report to the members of Adinath Textiles Limited (''the Company'') for the year ended 31 March 2014. We report that: (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) (a) The inventory has been physically verified during the year, by the management. In our opinion the frequency of verification is reasonable.

(b) The procedure of physical verification of inventories followed by the management, are reasonable & adequate in relation to the size of the company & the nature of business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks & the book records were not material.

(iii) (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) The Company has taken unsecured loans from companies, firms or parties covered in the register maintained under section 301 of the Act. There is only one party covered in the register maintained under section 301 of the Act. The maximum amount involved during the year & year end balance of loan is Rs. 3,05,620/- (c) In our opinion, the rate of interest and other terms and conditions on which loans have been taken by the company are not prima facie prejudicial to the interest of company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and sale of services. The activities of the Company do not involve purchase of inventory and the sale of goods. We have not observed any major weakness in the internal control system during the course of the audit.

(v) (a) In our opinion and according to the information and explanations given to us, we are of the opinion that particulars of the contracts or arrangements, referred to in section 301 of the Act have been entered in to the register maintained under section 301 of the Companies Act, 1956 and Section 189 of the companies Act, 2013,

(b) As per information & explanations given to us and in our opinion, the transaction entered into by the company with parties covered u/s 301 of the Companies Act, 1956 and Section 189 of the Companies Act, 2013, does not exceeds five lacs rupees in a financial year therefore requirement of reasonableness of transactions does not arises.

(vi) In our opinion and according to the information and explanations given to us, the company has not accepted deposit with the provisions of sections 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal. Therefore, the provisions of clause 4(vi) of the Companies (Auditor ''s Report) Order, 2003, are not applicable to the company.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and the nature of its business.

(viii) As per information & explanation given by the management, maintenance of cost records has been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 and Section 128 read with Section 2(13) of the Companies Act, 2013, we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, carried out a detailed examination of the same.

(ix) (a) According to the information and explanations given to us, following are the undisputed amounts payable in respect of Provident Fund, Sales-tax, are in arrears as at 31 March 2014 for a period of more than six months from the date they became payable.

Nature of Dues Amount in (Rs.)

Sales Tax 2277956

Entry Tax 237798

Intt. On PF/ESI/ Sales Tax 1342158

(b) According to the information and explanations given to us, the disputed statutory dues aggregating to RS 1695001 /- that have not been deposited on account of matters pending before the appellate authorities in respect of custom duty and excise duty are as follows.

Sr. Forum where Nature Disputed No. dispute is pending of Dues Amount (Rs.)

1. Commissioner Central Penalty 15,00,000** Excise & Customs, Chandigarh

** Note: However Rs. 500000/- has been deposited under protest.

(x) The Company has accumulated losses at the end of the financial year which is not more than company''s Net Worth and has not incurred cash losses in the financial year and in the immediately preceding financial year.

(xi) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) Based on our examination of documents and records and 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.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund/ nidhi/ mutual benefit fund/ society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xvi) The Company did not have any term loans outstanding during the year.

(xvii) The Company has not raised any funds on short- term basis.

(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 Act.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issues during the year.

(xxi) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

For DASS KHANNA & Co.

Chartered Accountants Firm''s Reg. No. 000402N

Place : Ludhiana RAKESH SONI

Date : 26-05- 2014 Partner

Membership No. 083142


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Adinath Textiles Limited (''the Company'') which comprise the balance sheet as at 31st March 2013, the profit and loss statement and the cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s 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 flows 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.

Auditor''s 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 auditor''s 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 internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. 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 give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the balance sheet, of the state of affairs of the Company as at 31 March 2013;

(ii) in the case of the profit and loss statement, of the profit for the year ended on that date; and

(iii) in the case of the cash flow statement, of the cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to note no. 16 to financial statements i.e. trade receivables amounting to RS. 1,51,58,488.89/- (previous year - 1,51,58,488.89) on which provision has been made of Rs. 85,10,000/- (previous year - 22,10,000) which are outstanding for more than three years from the date they are due for payable.

The company didn''t appoints a Whole time Company Secretary as required by section 383A of companies act,1956.

our opinion is not qualified in respect to this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that: We further report :

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, Profit and Loss Statement 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 Statement and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956; and

e. on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure to the Auditors'' Report

The Annexure referred to in our report to the members of Adinath Textiles Limited (''the Company'') for the year ended 31st March 2013. We report that:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) (a) The inventory has been physically verified during the year, by the management. In our opinion the frequency of verification is reasonable.

(b) The procedure of physical verification of inventories followed by the management,are reasonable& adequatein relation to the sizeof the company & the nature of business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks & the book records ,were not material.

(iii) (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) The Company has taken unsecured loans from companies, firms or parties covered in the register maintained under section 301 of the Act. There is only one party covered in the register maintained under section 301 of the Act. The maximum amount involved during the year & yearend balance of loan is Rs. 3,05,620/-

(c) In our opinion, the rate of interest and other terms and conditions on which loans have been taken by the company are not prima facie prejudicial to the interest of company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and sale of services. The activities of the Company do not involve purchase of inventory and the sale of goods. We have not observed any major weakness in the internal control system during the course of the audit.

(v)(a) In our opinion and according to the information and explanations given to us, we are of the opinion that particulars of the contracts or arrangements referred to in section 301 of the Act have been entered in to the register maintained under section 301 of the Companies Act.

b) As per information & explanations given to us and in our opinion, the transaction entered into by the company with parties covered u/s 301 of the Act does not exceeds five lacs rupees in a financial year therefore requirement of reasonableness of transactions does not arises.

(vi) In our opinion and according to the information and explanations given to us, the company has not accepted deposit with the provisions of sections 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and the nature of its business.

(viii) As per information & explanation given by the management, maintenance of cost records has been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

(ix) (a) According to the information and explanations given to us, following are the undisputed amounts payable in respect of Provident Fund, Sales-tax, are in arrears as at 31 March 2013 for a period of more than six months from the date they became payable.

Nature of Dues Amount in (Rs.)

Sales Tax 2277956

Entry Tax 237798

Intt. On PF/ESI/ Sale Tax 1342158

(b) According to the information and explanations given to us, the disputed statutory dues aggregating to RS 1695001 /- that have not been deposited on account of matters pending before the appellate authorities in respect of custom duty and excise duty are as follows.

Sr. Forum where Nature Disputed No. dispute is pending of Dues Amount (Rs.)

Commissioner Central

1. Excise Customs, Penalty 15,00,000 Chandigarh

** Note: However Rs. 500000/- has been deposited under protest

(x) The Company has accumulated losses at the end of the financial year which is not more than company''s Net Worth and has not incurred cash losses in the financial year and in the immediately preceding financial year.

(xi) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund/ nidhi/ mutual benefit fund/ society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xvi) The Company did not have any term loans outstanding during the year.

(xvii) The Company has not raised any funds on short-term basis.

(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 Act.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by public issues during the year.

(xxi) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

For DASS KHANNA & Co.

Chartered Accountants

Firm''s Reg. No. 000402N

Place : Ludhiana (RAKESH SONI)

Date : 29-05-2013 Partner

Membership No.: 083142


Mar 31, 2012

A) We have audited the attached Balance Sheet of ADINATH TEXTILES LIMITED, as at 31st March, 2012,Statement of Profit and Loss & Cash Flow Statement for the year ended on that date annexed thereto. 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.

b) We conducted our audit in accordance with the 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 management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

c) As required by The Companies (Auditor's Report) Order, 2003, 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.

d) Further to our comments in the Annexure referred to above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary forthe purposes of our audit;

(ii) 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. Though the net worth of the company has become negative (also refer to note no. 26 of notes to accounts) and the company have been declared as a Sick by BIFR and the draft rehabilitation package, as submitted through SBI (OA), is pending before the Honb'le BIFR.

(iii) The Balance Sheet and Profit and Loss Statement dealt with by this report, are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet and Profit & Loss Statement dealt with by this report, comply with the accounting standards referred to in sub-section (3C) of the section of The Companies Act, 1956.

(v) On the basis of written representation received from directors on 31st march 2012 and taken on record by the board of directors, we report that none of the directors is disqualified as on 31 * March 2012 from being appointed as a director in term of clause (g) of sub section (1) of sec 274 of Companies Act, 1956.

(vi) We report that:-

1. We are unable to express our opinion regarding realization of trade receivables amounting RS 12948488.89/- (previous year -15426957) which are due for more than three years. However in the opinion of the management the said amount is recoverable, hence no provision has been made against the same.

2. Company is not having any whole time Company Secretary.

In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the significant Accounting Policies & Notes thereon, 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 generally accepted in India:

a) In the case of the balance sheet, of the state of affairs of the company as at 31" March, 2012; and

b) In the case of Profit and Loss statement of the Profit for the period ended on that date.

c) I n the case of Cash Flow Statement of the Cash Rows for the period ended on that date.

(REFERRED TO IN PARAGRAPH (3) OF OUR REPORT EVEN DATE ON THE STATEMENT OF ACCOUNTS FOR ADINATH TEXTILES LIMITED AS AT AND FOR THE YEAR ENDED 31ST MARCH, 2012.) (i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed; assets.

(b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification, which, in our opinion, is reasonable, having regard to the size of the company and the nature of its business. No material discrepancies were noticed on such verification.

(c) The company has not disposed off substantial part of fixed assets which could effect it's going concern.

(ii) (a) The inventory has been physically verified during theyear. by the management. In purr opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories, 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 is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records, were not material. (iii) (a) The company has not granted loans, secured or unsecured to companies, firms or other related covered in the register maintained under section 301 of the Act.

(b) The company has not taken loans from the parties covered in the register maintained under section 301 of the Act.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls. (v) According to the information and explanations given to us, we are of the opinion that there was no contracts or arrangements that need to be entered in to the register maintained under section 301 of the Companies Act. (vi) In our opinion and according to the information and explanations given to us, the company has not accepted deposit with the provisions of sections 58Aand 58AAor any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court orany other Tribunal.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the accounts & records maintained by the company in pursuant to the rule made by the Central Government for maintenance of cost records under section 209(1) of the companies Act, 1956. We are of the opinion that prima facie the prescribed accounts and records have been made & maintained.

(ix) (a) The company is regular in depositing with appropriate authorities undisputed, However company is irregular in depositing sales tax. The extent of arrear outstanding as at 31° March 2011 for a period of more than six month from the date they become payable are as under-

Nature of Dues Amount in (Rs.)

Sales Tax 22,77,956

Entry Tax 37,798

Intt. on PF/ESI / Sale Tax 13,42,158

(b) According the records of the company, the disputed statutory dues aggregating to Rs. 16,95,001/- that have not been deposited on account of matters pending before the appellate authorities in respect of custom duty and excise duty are as follow

(x) In our opinion, the company has accumulated losses more than its net worth.

(xi) In our opinion and according to the information and explanations given to us, there is not default w.r.t. to debenture holders.

(xii) Vfe are of the opinion that 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.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investment.

(xv) In our opinion, and according to the information and explanations given to us the company has not given guarantees for bans taken by others from banks or financial institutions.

(xvi) During the year company has not raised any term loan.

(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 the no funds raised on short-term basis have been used for long-term investment except permanent working capital.

(xviii) According to the information and explanations given to us, the company has not made preferential allotment of shares to a parties covered in the register maintained under section 301 of the Act which arenot prejudicial to the interest of the company.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the company had not issued any debentures.

(xx) According to the information and explanations given to us, the company has not raised money by public issues.

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or re ported during the course of our audit.

FOR DASS KHANNA & CO.

CHARTERED ACCOUNTANTS

Registration No.000402N

PLACE :LUDMANA (RAKESHSONI)

DATED: 30-08-2012 PARTNER

M.NO. 083142


Mar 31, 2010

A) We have audited the attached balance sheet of ADINATH TEXTILES LIMITED, as at 31st March, 2010, the profit and loss account and also the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

b) We conducted our audit in accordance with the 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 disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

c) As required by the Companies (Auditors Report) Order, 2003 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.

d) Further to our comments in the Annexure referred to above, we report that:

(i) 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; (ii) In our opinion, proper books of account as required by law have been kept by the company as far as appears from our examination of those books. (iii) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account. Though the net worth of the company has become negative (also refer to Note no. 9 of Annexure-M), and the company have been declared as a Sick by BIFR and the draft rehabilitation package, as submitted through SBI (OA), is pending before the Honble BIFR.

(iv) 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; (v) On the basis of written representation received from directors on 31 March,2010 and taken on record by the board of directors ,we report that none of the directors is disqualified as on 31 March,2010 from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of Companies Act,1956. (vi) We report that:-

1. We are unable to express our opinion regarding realization of sundry debtors amounting Rs.12102399/- (Previous year Rs.12216509/-) which are due for more than three years. However in the opinion of the management the said amounts is recoverable, hence no provision has been made against the same.

2. Company is not having any whole time Company Secretary.

We further report:

In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to above and read together with notes on accounts as per Annexure M there on 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 generally accepted in India:

a) In the case of the balance sheet, of the state of affairs of the company as at 31st March, 2010.

b) in the case of the 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.



(REFERRED TO IN PARAGRAPHGRAPH (3) OF OUR REPORT EVEN DATE ON THE STATEMENT OF ACCOUNTS FOR ADINATH TEXTILES LIMITED AS AT AND FOR THE YEAR ENDED 31st MARCH, 2010.) (i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) AH the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off a major part of the plant and machinery, which affected the going concern status of the company.

(ii) (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories 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 is maintaining proper records of inventory. No discrepancies noticed on verification between the physical stocks and the book records.

(iii) (a) The company had taken loan from 3 parties listed in the register maintained under section 301 of the Companies Act,1956.The maximum amount involved during the year was Rs.80.55 lacs and the year end balance of loans taken was Rs.33.06 lacs. The company has not granted loans secured or unsecured to the parties listed in the register maintained under section 301 of the Companies Act, 1956.

(b) In our opinion , the rate of interest and other terms and conditions on which loans have been taken from parties listed in the register maintained under section 301 of the companies Act , 1956 are not , prima facie, prejudicial to the interests of the company.

(c) The company is regular in repaying the principal amounts as stipulated.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course, of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls. (v) According to the information and explanations given to us, we are of the opinion that there was no contract or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956.

(vi) In our opinion and according to the information and explanations given to us, the company has not accepted any deposited from public during the year within the meaning of section 58A, 58AA or any other provisions of the Act and the Companies Act, 1956 and the ruled framed there under.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) The company is regular in depositing with appropriate authorities undisputed, However company is irregular in depositing sales tax, House Tax .The extent of arrear outstanding as at 31° March 2010 for a period of more than six month from the date they become payable are as under-

Nature of Dues Amount in (Rs.)

Sales Tax 2277956

Entry Tax 237798

Intt. on PF/ESI /SaleTax 1342158

(a) According the records of the company, the disputed statutory dues aggregating to Rs. 16,95,001 /- that have not been deposited on account of matters pending before the appellate authorities in respect of custom duty and excise duty are as follow:

Forum where dispute is pending Nature of Dues Disputed Amount (Rs.)

Adl. Commissioner of Customs Duty, Interest & 1.95.001 Penalty

Commissioner Central Excise & Penalty 15.00.000** Customs, Chandigarh * * Note: However Rs. 500000/- has been deposited under protest.

(x) The accumulated losses of the company are more than of its networth.

(xi) In our opinion and according to the information and explanations given to us, there is no default w.r.t to debenture holders.

(xii) According to the information and explanations given to us the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The company is not a chit fund or a Nidhi /Mutual benefit fund/ society.

(xiv) The company is not dealing in or trading in shares, securities, debentures and other investment.

(xv) According to the information and explanations given to us the company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) During the year company has not raised any term loan.

(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 the no funds raised on short-term basis have been used for long term investment.

(xviii) According to the information and explanations given to us, during the year company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) According to the information and explanations given to us, the company has not issued any debentures during the year under audit.

(xx) The company has not raised any money by way of public issue during the year.

(xxi) In our opinion and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

FOR DASS KHANNA &. Co.,

CHARTED ACCOUNTANTS

PLACE: LUDHIANA (RAKESHSONI)

DATED: 14-08-10 PARTNER

M.NO. 83142


Mar 31, 2009

A) We have audited the attached balance sheet of ADINATH TEXTILES LIMITED, as at 31st March, 2009, the profit and loss account and also the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit

b) We conducted our audit in accordance with the auditing standards generally accepted in India, Those Standards requre that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material m statement. An audit inciudes examining, on a test basis, evidence supporting he amount; and disclosure in the financial statements . An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe thai our audit provides a reasonable basis for our opinion

c) As required by the Companies (Auditors Report) Order, 2003 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.

d) Further to our comments in the Annexure referred to above, we report that: i) 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; (ii) In our opinion, proper books of account as required by law have been kept by the company as far as appears from our examination of those books,

(iii) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account. Though the net worth of the company has become negative (also refer to Note no. 9 of Annexuie-M), and the company have been declared as a Sick by 8IFR and the draft rehabilitation package, as submitted through SBI (OA), is pending before the Honble BIFR

(iv) 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; (v) On the basis of written representation received from directors on 31 March,2009 and taken on record by the board of directors ,we report that none of the directors is disqualified as on 31 March,2009 from being appointed as a director in terms of clause (g) of sub section (1) of section 2 74 of Companies Act, 1956, (vi) We report that;-

1 We are unable to express our opinion regarding realization of sundry debtors amounting Rs,12216509/-

(Previous year Rs 12594322/-) which are due for more than three years. However in the opinion of the management the said amounts is recoverable, hence no provision has been made against the same,

2. Company is not having any whole time Company Secretary.

We further report;

In our opinion and to the best of our intormaton and according to the explanations given to us, the aid accounts subject to above read together with notes on accounts as per Annexure M there on give the inforrnation required by the Companies Act 1956 in the manner so required and 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 31 st March, 2009

b) in the case of the 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 tor the year ended on that date

(REFERRED TO IN PARAGRAPHGRAPH (3) OF OUR REPORT EVEN DATE ON THE STATEMENT OF ACCOUNTS FOR ADINATH TEXTILES LIMITED AS AT AND FOR THE YEAR ENDED 31" MARCH, 2009)

(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off a major part of the plant and machinery, which affected the going concern status of the company.

(ii) (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories 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 is maintaining proper records of inventory. No discrepancies noticed on verification between the physical stocks and the book records.

(iii) (a) The company had taken loan from 6 parties listed in the register maintained under section 301 of the Companies Act, 1956.The maximum amount involved during the year was Rs.163.97 lacs and the year end balance of loans taken was Rs. 49.56 lacs. The company has not granted loans secured or unsecured to the parties listed in the register maintained under section 301 of the Companies Act, 1956.

(b) In our opinion .the rate of interest and other terms and conditions on which loans have been taken from parties listed in the register maintained under section 301 of the companies Act, 1956 are not, prima facie, prejudicial to the interests of the company.

(c) The company is regular in repaying the principal amounts as stipulated.

(d) The company had not granted loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act (iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course, of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) According to the information and explanations give to us, we are of the opinion that there was no contract or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956.

(vi) In our opinion and according to the information and explanations given to us, the company has not accepted any deposited from public during the year within the meaning of section 58A, 58AA or any other provisions of the Act and the Companies Act, 1956 and the ruled framed there under.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix)(a) The company is regular in depositing with appropriate authorities undisputed, However company is irregular in depositing sales tax, House Tax The extent of arrear outstanding as at 31st March 2009 for a period of more than six month from the date they become payable are as under-



Nature of Dues Amount in (Rs.)

Sales Tax 2277956

Entry Tax 237798

ESI 70621

Inlt. on PF/ESI / Sale Tax 1342158



(b) According the records of the company, the disputed statutory dues aggregating to Rs. 16,95,001/- that have not been deposited on account of matters pending before the appellate authorities in respect of custom duty and excise duty are as follow:

Forum where dispute is pending Nature of Dues Disputed Amount (Rs)

Adl. Commissioner of Customs Duty, Interest & . Penalty 1.95.001

Commissioner Central Excise & Penalty 15,00,000** Customs, Chandigarh



**Note : However Rs. 5,00,000/- has been deposited under protest

(x) The accumulated losses of the company are more than of its net worth.

(xi) In our opinion and according to the information and explanations given to us, there is no default w.r.t to debenture holders.

(xii) According to the information and explanations given to us the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The company is not a chit fund or a Nidhi / Mutual benefit fund / society.

(xiv) The company is not dealing in or trading in shares, securities, debentures and other investment.

(xv) According to the information and explanations given to us the company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) During the year company has not raised any term loan.

(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 the no funds raised on short-term basis have been used for long term investment.

(xviii) According to the information and explanations given to us, during the year company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act

(xix) According to the information and explanations given to us, the company has not issued any debentures during the year under audit.

(xx) The company has not raised any money by way of public issue during the year.

(xxi) In our opinion and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

FOR DASS KHANNA & CO

CHARTERED ACCOUNTANTS

PLACE LUDHIANA (RAKESHSONI)

DATED: 21-08-09 PARTNER

M.NO. 83147



 
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