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Auditor Report of Bombay Rayon Fashions Ltd.

Mar 31, 2015

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Bombay Rayon Fashions Limited ("the Company"), which comprises the Balance Sheet as at March 31, 2015, 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 Standalone 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 standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with 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 of the assets of the company 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 the 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 misstatements, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone 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 issued by the Institute of Chartered Accountants of India, as 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 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 standalone 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 system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of 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 standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

(b) In the case of statement of Profit and Loss, of the Loss for the year ended on that date; and

(c) 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, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 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 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 it appears from our examination of those books;

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

d) In our opinion, the aforesaid standalone 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 written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 position in its financial statements.

– Refer note 35 to the financial statements;

ii) The company does not have any long term contracts including derivative contracts for 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 Auditor's Report even date

(Referred to in paragraph 1 thereof)

1. In respect of Fixed Assets:

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

b) The fixed assets have been physically verified by the management at reasonable intervals during the year. We are informed that no material discrepancies were noticed by the management on such verification.

2. In respect of Inventories:

a) As explained to us physical verification of inventories has been conducted during the year by the management at reasonable intervals.

b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

c) In our opinion and according to the information and explanation given to us, the Company is maintaining proper records of its inventories and no material discrepancies were noticed on physical verification.

3. In respect of loans, secured or unsecured granted by the Company to the companies, firms or other parties covered in the register maintained under Section 189 of the companies Act, 2013:

a) During the year Company has granted interest free advances to 4 subsidiary companies covered in the register maintained u/s 189 of the Companies Act, 2013.

b) In respect of the said loan, the principal amount is repayable over a period of 5 to 7 years.

c) In respect of the said loan, there are no overdue amounts.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and sale of goods and services. Further, on the basis of our examination of the books and records of the company, carried out in accordance with the auditing standards generally accepted in India and according to the information and explanations given to us, we have neither come across nor have we been informed of any continuing failure to correct weaknesses in the aforesaid internal control system.

5. According to the information and explanations given to us, the Company has not accepted any deposits from public.

6. As per the information and explanations provided to us, we are of the opinion that in pursuant to the prescribed rules by Central Government, the company had maintained cost records u/s. 148(1) (d) of the Companies Act, 2013; however we have not done a detailed examination of the same.

7. In respect of Statutory Dues:

(a) Undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, custom duty, excise duty, cess and other material statutory dues have not been regularly deposited with the appropriate authorities,

(b) According to the information and explanations given, undisputed amounts payable in respect of TDS, TCS, Provident fund, Employee state insurance, service tax, customs duty, excise duty, cess and other statutory dues applicable to it which were outstanding as at 31.03.2015 for a period of more than six months from the date they became payable are as under :- Statement of Arrears of statutory dues outstanding for more than six months as at 31st March 2015:

Sr. No. Nature of the Dues Amount (Rs. In crores)

1 Tax Deducted at Source 4.49

2 Provident Fund 7.89

3 Professional Tax 0.79

4 Employee State insurance Corporation 0.46

5 Service Tax 1.26

6 Property Tax 2.05

TOTAL 16.94

(c) According to the records of the company there are no dues of Income-Tax, sales tax, wealth tax, service tax, customs duty, excise duty / cess which have not been deposited on account of any dispute except as given below.

Nature of the Act Amount (Rs. In Crores) Period to which the Forum where dispute is amount relates pending

Income Tax Act, 1961 0.02 2004-05 CIT (A) - 54, Mumbai

Income Tax Act, 1961 0.82 2009-10 ITAT Mumbai

Income Tax Act, 1961 1.22 2010-11 ITAT Mumbai

Income Tax Act, 1961 0.21 2011-12 CIT (A) - 54, Mumbai

(d) According to the records of the company there are no amounts that are to be transferred to Investor Education & Protection Fund.

8. The company has no accumulated losses at the end of the year. The company has not incurred any cash loss during the current year. However, it has incurred cash losses ofRs. 344.02 Crores (After considering extra ordinary items ofRs. 349.28 Crores) in the immediately preceding financial year covered by our audit.

9. In our opinion and according to the information and explanations given to us, there have been delay in repayment of dues to financial of dues to financial institutes and banks during the year, As on date the amount due and remaining unpaid on account of principal and interest to lenders was Rs. 31.98 crore.

10. The company has not given any corporate guarantees for loans taken by others from banks and financial Institutions.

11. According to the records of the company, the company has applied the term loans for the purpose of which it was taken during the year.

12. Based upon the audit procedure performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For V. K. BESWAL & ASSOCIATES

CHARTERED ACCOUNTANTS

FIRM REGN NO 101083W

CA K. V. BESWAL

PARTNER

Place : Mumbai Membership Number: 131054

Dated : 22/05/2015 Firm Regn. No.: 101083W


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Bombay Rayon Fashions Limited, which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and summary of significant accounting policies and other explanatory information.

Management 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 principles generally accepted in India including 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:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(b) In the case of the Profit and Loss Account, of the Profit for the year ended on that date; and

(c) 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

(a) As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") 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.

(b) As required by section 227(3) of the Act, 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 purpose 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;

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

iv. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

v. 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 Auditor''s Report of Even Date

(Referred to in paragraph 1 thereof)

1. In respect of fixed assets:

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

b) The fixed assets have been physically verified by the management at reasonable intervals during the year. We are informed that no material discrepancies were noticed by the management on such verification.

c) Based on our scrutiny of the records of the company and the information & explanation received by us, we report that there were sale of fixed assets during the year but the fixed assets disposed off did not constitute a substantial part of the fixed assets of the company.

2. In respect of inventories

a) As explained to us physical verification of inventories has been conducted during the year by the management at reasonable intervals.

b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

c) In our opinion and according to the information and explanation given to us, the Company is maintaining proper records of its inventories and no material discrepancies were noticed on physical verification.

3. In respect of loans, unsecured, granted and taken.

a) The company has granted interest free advances to five companies including four subsidiaries covered in the register maintained under section 301 of the companies Act, 1956, the maximum amount outstanding at any time during the year is Rs. 587.52 Crores and the year balance is Rs. 545.40 Crores .

b) In our opinion and according to the information and explanations given to us, other terms and conditions are not prima facie prejudicial to the interest of the Company.

c) In respect of the said advances amounting to Rs. 210 Crores is repayable within the period of one year and remaining over a period of 5 to 7 years.

d) In respect of the said loans, there are no overdue amounts

e) During the year the company has not taken any loans from parties covered in the registered maintained under section 301 of the Companies Act, 1956.

f) In view of our comments above, clause (iii) (f) and (g) of the said order is not applicable to the company.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and fixed assets. Further, on the basis of our examination of the books and records of the company, carried out in accordance with the auditing standards generally accepted in India and according to the information and explanations given to us, we have neither come across nor have we been informed of any continuing failure to correct weaknesses in the aforesaid internal control system.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

a) In our opinion and according to the information and explanations given to us the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in to the register required to be maintained under that section.

b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Act and exceeding the value of Rupees five lakhs in respect of any party during the year, have been made at prices, which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6. According to the information and explanations given to us, the Company has not accepted any deposits from public.

7. In our opinion the Company has an internal audit system commensurate with its size and nature of its business.

8. As per the information and explanations provided to us, we are of the opinion that in pursuant to prescribed rules by the central government, the company has maintained cost records u/s. 209(1) (d) of the Companies Act, 1956 however we have not done a detailed examination of the same.

9. In respect of statutory dues:

a) According to the records of the company produced before us, the Company has been regular in depositing with appropriate authorities undisputed statutory dues in respect of , Investor Education Protection Fund, Sales Tax, Wealth Tax, Custom Duty and Excise Duty, however the Company has been irregular in depositing with appropriate authorities undisputed statutory dues in respect of Provident Fund, Employees State Insurance, Income Tax.

b) Accordingly to the information and explanation given undisputed amounts payable in respect of TDS, TCS, Provident Fund, Employees State Insurance, Service Tax and other statutory dues applicable to it which were outstanding as at the last day of the financial year for a period of more than six months from the date they became payable is as under:-

S. No. Name of Head Amount (Rs.)

1 Tax Deducted at Source 5,68,05,312

2 Tax Collected at Source 66,718

3 Employee State Insurance Corporation 89,39,810

4 Service Tax 8,75,200

5 Professional Tax 23,05,488

6 Provident Fund 3,35,98,929

7 Property tax 70,23,956

TOTAL 10,96,15,413

c) According to the records of the company, there are no disputed dues of Income Tax, sales tax, customs duty, wealth tax, service tax and excise duty / cess except as under:

Name of the Statute Amount (Rs. In Crores) Period for which it Forum where dispute is relates pending

Income Tax Act, 1961 0.02 AY 2004-05 Commissioner of Income Tax (Appeals 41), Mumbai

Income Tax Act, 1961 0.02 A Y 2006-07 Income Tax Appellate Tribunal, Mumbai

Income Tax Act, 1961 0.72 AY 2006-07 Commissioner of Income Tax (Appeals 14), Mumbai

Income Tax Act, 1961 0.28 AY 2007-08 Commissioner of Income Tax (Appeals 41), Mumbai

Income Tax Act, 1961 35.98 AY 2008-09 Commissioner of Income Tax (Appeals 41), Mumbai

Income Tax Act, 1961 0.14 AY 2008-09 Commissioner of Income Tax (Appeals 14), Mumbai

Income Tax Act, 1961 0.12 AY 2009-10 Commissioner of Income Tax (Appeals 14), Mumbai

Income Tax Act, 1961 1.30 AY 2009-10 Commissioner of Income Tax (Appeals 41), Mumbai

Income Tax Act, 1961 21.44 AY 2010-11 Commissioner of Income Tax (Appeals 41), Mumbai

10. The company has no accumulated losses at the end of the financial year. The company has not incurred any cash loss during the financial year covered by our audit and in the immediately preceding financial year.

11. Based on our audit procedures and as per the information and explanations given by the management, the company was not regular in repayment of the dues to the banks. As at 31st March 2013 the unpaid overdue installments and interest to the banks were Rs. 95.85 Crores, out of which since unpaid Rs. 64.43 crores.

12. The Company has not borrowed from any financial institutions and issued debentures.

13. 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 or other securities.

14. In our opinion, and to the best of our information and according to the explanations provided by the management, we are of the opinion that the company is neither a Chit Fund nor a nidhi/mutual benefit society. Hence, in our opinion, the requirements of para 4 (xiii) of the Order do not apply to the company.

15. As per records of the company and information and explanations given to us by the management, company is not dealing or trading in shares, securities, debentures and other investments.

16. 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.

17. According to the records of the Company, the Company has applied the term loans for the purposes of which it was taken during the year.

18. According to the information and explanations given to us and, on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis has been used for long-term investment by the company.

19. According to the records of the company and the information provided by the management, 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.

20. During the period covered by audit report the company has not issued any debentures.

21. During the year the company has not raised any money by way of public issue.

22. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For V.K. BESWAL & ASSOCIATES

CHARTERED ACCOUNTANTS

C.A. R.P. LADDHA

PARTNER

Membership Number - 48195

Firm Regn. No.: 101083W

Place - Mumbai

Dated: June 7th, 2013


Mar 31, 2012

We have audited the attached Balance Sheet of BOMBAY RAYON FASHIONS LIMITED as at March 31, 2012 and the Profit and Loss Account & 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.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and 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.

1. As required by the Companies (Auditor's Report) Order, 2003(as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956. We enclose the annexure statement on the matters specified in paragraphs 4 and 5 of the Order.

2. Further to our comments in the Annexure referred to in paragraph 1 above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion, the Company has kept proper books of accounts as required by law so far as appears from our examination of those books.

c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of accounts.

d) In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet, Profit & Loss Account & Cash Flow Statement are prepared in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1961.

e) On the basis of written representations received from directors as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on March 31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with notes thereon and attached thereto give in the prescribed manner the information required by the Companies Act, 1956, required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. In so far as it relates to the Balance Sheet of the state of affairs of the Company as at March 31, 2012,

ii. In so far as it relates to the Profit & Loss Account of the PROFIT of the company for the year ended on that date, and

iii. In so far as it related to the Cash Flow Statement, of the Cash Flows for the year ended on that date.

Annexure to the Auditor's Report of even date

(Referred to in paragraph 1 thereof)

1. In respect of fixed assets:

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

b) The fixed assets have been physically verified by the management at reasonable intervals during the year. We are informed that no material discrepancies were noticed by the management on such verification.

c) Based on our scrutiny of the records of the company and the information & explanation received by us, we report that there were sale of fixed assets during the year but the fixed assets disposed off did not constitute a substantial part of the fixed assets of the company.

2. In respect of inventories:

a) As explained to us physical verification of inventories has been conducted during the year by the management at reasonable intervals.

b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

c) in our opinion and according to the information and explanation given to us, the Company is maintaining proper records of its inventories and no material discrepancies were noticed on physical verification.

3. In respect of loans, unsecured, granted and taken:

a) The company has granted interest free advances to five companies including four subsidiaries covered in the register maintained under section 301 of the companies Act, 1956, the maximum amount outstanding at any time during the year is Rs. 578.42 Crores and the year balance is Rs. 569.77 Crores.

b) In our opinion and according to the information and explanations given to us, other terms and conditions are not prima facie prejudicial to the interest of the Company,

c) In respect of the said advances amounting to Rs. 210.00 Crores is repayable within the period of one year and remaining over a period of 5 to 7 years.

d) in respect of the said loans, there are no overdue amounts.

e) During the year the company has not taken any loans from parties covered in the registered maintained under section 301 of the Companies Act, 1956.

f) In view of our comments above, clause (iii) (f) and (g) of the said order is not applicable to the company.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and fixed assets. Further, on the basis of our examination of the books and records of the company, carried out in accordance with the auditing standards generally accepted in India and according to the information and explanations given to us, we have neither come across nor have we been informed of any continuing failure to correct weaknesses in the aforesaid internal control system.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

a) In our opinion and according to the information and explanations given to us the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in to the register required to be maintained under that section.

b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Act and exceeding the value of Rupees five iakhs in respect of any party during the year, have been made at prices, which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6. According to the information and explanations given to us, the Company has not accepted any deposits from public.

7. In our opinion the Company has an internal audit system commensurate with its size and nature of its business.

8. As per the information and explanations provided to us, we are of the opinion that in pursuant to prescribed rules by the central government, the company has maintained cost records u/s. 209(1) (d) of the Companies Act, 1956 however we have not done a detailed examination of the same.

9. In respect of statutory dues:

a) According to the records of the company produced before us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and other statutory dues applicable to it.

Accordingly to the information and explanation given no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Income Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and other statutory dues applicable to it which were outstanding as at the last day of the financial year for a period of more than six months from the date they became payable.

b) According to the records of the company, there are no disputed dues of Income Tax, sales tax, customs duty, wealth tax, service tax and excise duty / cess except as under:

Amount Rs. In Period for Name of the Statute Forum where dispute is pending Crores which it relates

Income Tax Act, 1961 0.53 AY 2009-10 Commissioner of Income Tax (Appeals 14), Mumbai

Income Tax Act, 1961 0.14 AY 2008-09 Commissioner of Income Tax (Appeals 14), Mumbai

Income Tax Act, 1961 0.10 AY 2008-09 Commissioner of Income Tax (Appeals) 16, Mumbai

Income Tax Act, 1961 0.72 AY 2006-07 Commissioner of income Tax (Appeals 14), Mumbai

Income Tax Act, 1961 0.06 AY 2005-06 Commissioner of income Tax (Appeals 41), Mumbai

Income Tax Act, 1961 0.06 AY 2004-05 Income Tax Appellate Tribunal, Mumbai

Income Tax Act, 1961 0.09 AY 2004-05 Commissioner of Income Tax (Appeals 41), Mumbai

Income Tax Act, 1961 0.27 AY 2003-04 income Tax Appellate Tribunal, Mumbai

10. The company has no accumulated losses at the end of the financial year. The company has not incurred any cash loss during the financial year covered by our audit and in the immediately preceding financial year.

11. As per the information and explanations given to us the company is generally regular in repayment of dues to banks, however in some cases an amount of Rs. 28.75 crores remained to be unpaid.

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 or other securities.

13. In our opinion, and to the best of our information and according to the explanations provided by the management, we are of the opinion that the company is neither a Chit Fund nor a nidhi/mutuai benefit society. Hence, in our opinion, the requirements of para 4 (xiii) of the Order do not apply to the company.

14. As per records of the company and information and explanations given to us by the management, company is not dealing or trading in shares, securities, debentures and other investments.

15. 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.

16. According to the records of the Company, the Company has applied the term loans for the purposes of which it was taken during the year.

17. According to the information and explanations given to us and, on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis has been used for long-term investment by the company.

18. The company has made preferential allotment of shares to companies covered in the register maintained under section 301 of the Act. In our opinion the prices at which the shares have been issued is not prejudicial to the interest of the company.

19. During the period covered by audit report the company has not issued any debentures.

20. During the year the company has not raised any money by way of public issue.

21. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For V.K.BESWAL & ASSOCIATES

CHARTERED ACCOUNTANTS

C.A. R.P. LADDHA

[PARTNER]

Place - Mumbai Membership Number - 48195

Date: May 29, 2012 Firm Regn. No.: 101083W


Mar 31, 2011

We have audited the attached Balance Sheet of BOMBAY RAYON FASHIONS LIMITED as at March 31, 2011 and also the Profit and Loss Account & 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.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and 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.

1. As required by the Companies (Auditor's Report) Order, 2003(as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956. We enclose the annexure statement on the matters specified in paragraphs 4 and 5 of the Order.

2. Further to our comments in the Annexure referred to in paragraph 1 above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion, proper books of accounts 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 & Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of accounts.

d) In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet, Profit & Loss Account & Cash Flow Statement are prepared in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

e) On the basis of written representations received from directors as on March 31, 2011 and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with notes thereon and attached thereto give in the prescribed manner the information required by the Companies Act, 1956, required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. In so far as it relates to the Balance Sheet of the state of affairs of the Company as at March 31, 2011

ii. In so far as it relates to the Profit & Loss Account of the profit of the company for the year ended on that date, and

iii. In so far as it related to the Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO THE AUDITOR'S REPORT OF EVEN DATE (Referred to in paragraph 1 thereof)

1. In respect of fixed assets:

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

b) The fixed assets have been physically verified by the management at reasonable intervals during the year. We are informed that no material discrepancies were noticed by the management on such verification.

c) Based on our scrutiny of the records of the company and the information & explanation received by us, we report that there were sale of fixed assets during the year but the fixed assets disposed off did not constitute a substantial part of the fixed assets of the company.

2. In respect of inventories

a) As explained to us physical verification of inventories has been conducted during the year by the management at reasonable intervals.

b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

c) In our opinion and according to the information and explanation given to us, the Company is maintaining proper records of its inventories and no material discrepancies were noticed on physical verification.

3. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the register maintained under section 301 of the companies Act, 1956:

a) The company has granted interest free advances to its wholly owned subsidiaries. The maximum amount outstanding at any time during the year is Rs. 540.94 crores and the year-end balance is Rs. 512.50 crores.

b) In our opinion and according to the information and explanations given to us, other terms and conditions are not prima facie prejudicial to the interest of the Company.

c) In respect of the said loans, the same are repayable on demand and there is no repayment schedule.

d) In respect of the said loans, the same are repayable on demand and therefore the question of overdue amounts does not arise.

e) During the year the company has not taken any loans from parties covered in the registered maintained under section 3)1 of the Companies Act, 1956.

f) In view of our comments above, clause (iii) (f) and (g) of the said order is not applicable to the company.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and fixed assets. Further, on the basis of our examination of the books and records of the company, carried out in accordance with the auditing standards generally accepted in India and according to the information and explanations given to us, we have neither come across nor have we been informed of any continuing failure to correct weaknesses in the aforesaid internal control system.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

a) In our opinion and according to the information and explanations given to us the particulars of contracts or arrangemerts referred to in section 301 of the Act have been entered in to the register required to be maintained under that section.

b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Act and exceeding the value of Rupees five lakhs in respect of any party during the year, have been made at prices, which are prima facie reasonable having regard o the prevailing market prices at the relevant time.

6. According to the information and explanations given to us, the Company has not accepted any deposits from public.

7. In our opinion the Company has an internal audit system commensurate with its size and nature of its business.

8. As per the information and explanations provided to us, we are of the opinion that in pursuant to prescribed rules by the central government, the company has maintained cost records u/s. 209(1) (d) of the Companies Act, 1956 however we have not dore a detailed examination of the same.

9. In respect of statutory dues:

a) According to the records of the company produced before us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and other statutory dues applicable to it, which were outstanding as at the last day of the financial year for a period of more than six months from the date they became payable.

b) According to the records of the company, there are no disputed dues of sales tax, customs duty, wealth tax, service tax and excise duty/ cess except as under:

Name of the Statute Amount (Rs. In Lacs) Period for which it relates Forum where dispute is pending

Income Tax Act, 1961 9.96 AY 2008-09 Commissioner of Income Tax (Appeals 8), Mumbai

Income Tax Act, 1961 12.21 AY 2004-05 Commissioner of Income Tax (Appeals 32), Mumbai

Income Tax Act, 1961 27.38 AY 2003-04 Commissioner of Income Tax (Appeals 32), Mumbai

Total 49.55

10. The company has no accumulated losses at the end of the financial year. The company has not incurred any cash loss during the financial year covered by our audit and in the immediately preceding financial year.

11. As per the information and explanations given to us the company is generally regular in making the repayments due to the banks & financial institution and as at 31.03.2011 there are no overdue amounts.

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 or other securities.

13 In our opinion, and to the best of our information and according to the explanations provided by the management, we are of the opinion that the company is neither a Chit Fund nor a nidhi/mutual benefit society. Hence, in our opinion, the requirements of para 4 (xiii) of the Order do not apply to the company.

14. As per records of the company and information and explanations given to us by the management, company is not dealing or trading in shares, securities, debentures and other investments.

15. 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.

16. According to the records of the Company, the Company has applied the term loans for the purposes of which it was taken during the year.

17. According to the information and explanations given to us and, on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment by the company.

18. The company has not made preferential allotment of shares to a company covered in the register maintained under section 301 of the Act.

19. During the period covered by audit report the company has not issued any debentures.

20. During the year the company has not raised any money by way of public issue.

21. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For V. K. Beswal & Associates

Chartered Accountants

CA R. P. Laddha

Partner

Place : Mumbai M. No. 48195

Dated : June 04, 2011 Firm Reg. No. 101083W


Mar 31, 2010

We have audited the attached Balance Sheet of BOMBAY RAYON FASHIONS LIMITED as at March 31, 2010 and also the Profit and Loss Account & 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.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and 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.

1. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-Section (4A) of Section 227 of the Companies Act, 1956. We enclose the annexure statement on the matters specified in paragraphs 4 and 5 of the Order.

2. Further to our comments in the Annexure referred to in paragraph 1 above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion, proper books of accounts 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 & Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of accounts.

d) In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet, Profit & Loss Account & Cash Flow Statement are prepared in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1961.

e) On the basis of written representations received from directors as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with notes thereon and attached thereto give in the prescribed manner the information required by the Companies Act, 1956, required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In so far as it relates to the Balance Sheet of the state of affairs of the Company as at March 31, 2010,

ii) In so far as it relates to the Profit & Loss Account of the PROFIT of the company for the year ended on that date, and

iii) In so far as it related to the Cash Flow Statement, of the Cash Flows for the year ended on that date. Annexure to the Auditors Report of even date (Referred to in paragraph 1 thereof)

1. In respect of Fixed Assets:

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

b) The fixed assets have been physically verified by the management at reasonable intervals during the year. We are informed that no material discrepancies were noticed by the management on such verification.

c) Based on our scrutiny of the records of the company and the information & explanation received by us, we report that there were sale of fixed assets during the year but the fixed assets disposed off did not constitute a substantial part of the fixed assets of the company.

2. In respect of Inventories:

a) As explained to us physical verification of inventories has been conducted during the year by the management at reasonable intervals.

b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

c) In our opinion and according to the information and explanation given to us, the Company is maintaining proper records of its inventories and no material discrepancies were noticed on physical verification.

3. In respect of loans, secured or unsecured, granted or taken by the Company to/ from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

a) The Company has granted loans to companies and the maximum amount outstanding at any time during the year is Rs. 445.53 crores and the year-end balance is Rs. 440.31 crores.

b) In our opinion and according to the information and explanations given to us, the rate of interest, where applicable and other terms and conditions, are not prima facie prejudicial to the interest of the Company.

c) In respect of the said loans, the same are repayable on demand and there is no repayments schedule.

d) In respect of said loans, the same are repayable on demand and therefore the question of overdue amounts does not arise. In respect of interest, where applicable there are no overdue amounts.

e) During the year the Company has not taken any loans from parties covered in the register maintained under Section 301 of the Companies Act, 1956.

f) In view of our comments above, clause (iii) (e) (f) and (g) of the said order is not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and fixed assets. Further, on the basis of our examination of the books and records of the company, carried out in accordance with the auditing standards generally accepted in India and according to the information and explanations given to us, we have neither come across nor have we been informed of any continuing failure to correct weaknesses in the aforesaid internal control system.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

a) In our opinion and according to the information and explanations given to us the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in to the register required to be maintained under that section.

b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and exceeding the value of Rupees Five Lakhs in respect of any party during the year, have been made at prices, which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6. According to the information and explanations given to us, the Company has not accepted any deposits from public.

7. In our opinion the Company has an internal audit system commensurate with its size and nature of its business.

8. As per the information and explanations provided to us, we are of the opinion that in pursuant to prescribed rules by the central government, the company has maintained cost records u/s. 209(1) (d) of the Companies Act, 1956 however we have not done a detailed examination of the same.

9. In respect of Statutory Dues:

a) According to the records of the company produced before us, the Company is generally regular in

depositing with appropriate authorities undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Wealth Tax, Custom Duty, Excise Duty, Service Tax, Cess and other statutory dues applicable to it, which were outstanding as at the last day of the financial year for a period of more than six months from the date they became payable .

b) According to the records of the company, there are no disputed dues of Sales Tax, Customs Duty, Wealth Tax, Service Tax and Excise Duty / Cess except as under:

Name of Amount Period for Forum where the (Rs.) which it dispute is Statute relates pending

Income Tax 9,95,922 A.Y. 2008-09 Income Tax Appellate Act, 1961 Tribunal Mumbai

Income Tax 1,70,000 A.Y. 2008-09 Commissioner of Act, 1961 Income Tax (Appeals) (TDS), Mumbai

Income Tax 1,72,800 A.Y. 2007-08 Commissioner of Act, 1961 Income Tax (Appeals) (TDS), Mumbai

Income Tax 2,06,600 A.Y. 2006-07 Commissioner of Act, 1961 Income Tax (Appeals) (TDS), Mumbai

TOTAL 15,45,322

10. The company has no accumulated losses at the end of the financial year. The company has not incurred any cash loss during the financial year covered by our audit and in the immediately preceding financial year.

11. As per the information and explanations given to us the company is generally regular in making the repayments due to the banks & financial institution and as at March 31, 2010 there are no overdue amounts.

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 or o ther securities.

13. In our opinion, and to the best of our information and according to the explanations provided by the

management, we are of the opinion that the company is neither a Chit Fund nor a nidhi/mutual benefit society. Hence, in our opinion, the requirements of para 4 (xiii) of the Order do not apply to the company.

14. As per records of the company and information and explanations given to us by the management, company is not dealing or trading in shares, securities, debentures and other investments.

15. 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.

16. According to the records of the Company, the Company has applied the term loans for the purposes of which it was taken during the year.

17. According to the information and explanations given to us and, on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment by the company.

18. The Company has made preferential allotment of shares to a Company covered in the register maintained under Section 301 of the Act. In our opinion, prices as which shares have been issued are not prejudicial to the interest of the Company.

19. During the period covered by audit report the company has not issued any debentures.

20. During the year the company has not raised any money by way of public issue.

21. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For V. K. BESWAL & ASSOCIATES

Chartered Accountants

R. P. Laddha

Partner

Membership Number - 48195 Firm Regn. No.: 101083W

Place : Mumbai

Date : May 18, 2010



 
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