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Auditor Report of Flora Textiles Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of FLORA TEXTILES LIMITED ("the Company"), which comprise the Balance Sheet as at 31 March, 2015, the Statement of Profit and Loss and 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.

Auditors' 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 thereunder.

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 loss and its 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 in terms of Section 143(11) of the Act, we give in the 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:

1. The Company has disclosed the impact of pending litigations on its financial position in its financial statements

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

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

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' section of our report of even date)

(i) In respect of its fixed assets:

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

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(ii) In respect of its inventories:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.

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

(iii) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records and Rules) Rules, 2014 prescribed by the Central Government under Section 148[1 ] of the Companies Act, 2013 and are of the opinion that, prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales Tax, Cess and other material statutory dues in arrears as at 31 March, 2015 for a period of more than six months from the date they became payable.

(viii) The accumulated losses of the Company at the end of the financial year is Rs.1634.04 lakhs (Previous year Rs. 1524.84 lakhs). The Company has incurred a cash loss of Rs. 104.73 lakhs (Previous year Rs.63.76 lakhs) during the financial year covered by our audit.

(ix) According to the information and explanations given to us, the Company has not raised any loans from financial institutions, banks and debenture holders. Hence the provisions of default does notarise.

(x) In our opinion and according to the information and explanations given to us, no guarantees has been given by the company for loan taken by others.

(xi) In our opinion and according to the information and explanations given to us, no term loans were obtained by the company during the financial year.

(xii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

Place: Coimbatore FOR ANJANA & CO Date: 30.05.2015 (FRN No 006724S) CHARTERED ACCOUNTANTS PRAVIN KUMAR MAHESHWARI PARTNER (Membership no 26866)




Mar 31, 2013

We have audited the attached Balance Sheet of Flora Textiles Limited as at 31st March 2013, the Profit and Loss Account for the year ended and Cash flow statement 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.

1. We conducted our audit in accordance with auditing standards generally accepted in India. Those Stan- dards 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 test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditors Report) Order, 2003, issued by the 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 paras 4 & 5 of the said order.

3. We further report that:

(a) We have obtained all the informa''tion and explanations which is 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 such books.

(c) The Balance Sheet, Profit & Loss Account and Cash flow statement dealt with by this report are in agreement with the books of accounts of the company.

(d) In our opinion, the Profit & Loss account .Balance Sheet and Cash flow statement dealt with by this report comply with Accounting Standards specified by The Institute of Chartered Accountants of India referred to in sub-section 3 ( C ) of Section 211 of the Companies Act, 1956.

(e) Based on the epresentations made by the Directors as on March 31, 2013 and taken on record by the Board of Directors of the company and information and explanation given to us , 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.

(f) 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 accounting policies and other notes, thereon gives the information required by Companies Act, 1956, in the manner so required and present 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 2013

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

(c) In the case of the Cash flow statement for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH (2) OF OUR AUDIT REPORT OF EVEN DATE OF FLORA TEXTILES LIMITED

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

(b) As explained to us, according to the practice of the company fixed assets are physically verified by the management at reasonable intervals in a phased verification programme, which in our opinion, is reasonable looking at the size of the company and the nature of its business. During the year, as informed to us no material discrepancies have been notified on such verification.

® During the year, the company has not disposed off substantial part of its fixed assets so as to affect its going concern.

II a) As explained to us the inventories have been physically verified during the year, by the Management.

b) The procedures, as explained to us which are followed by the management for physical verification of inventories are in our opinion adequate in relation to the size of the company and the nature of the business.

c) The company is maintaining proper records of inventory and it is told to us that the discrepancies that were noticed in the course of physical verification have been properly dealt with in the book of accounts

III The Company has not granted/taken any loan secured or unsecured to/from companies Firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 and hence matters regarding rate of interest, terms and conditions of loans, repayments and overdue amounts more than one lakh of rupees are not applicable.

IV In our opinion and according to the information 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 the purchase of inventory and fixed assets and for the sale of goods. During the course of audit no major weakness has been noticed in the Internal Controls.

V As explained to us, during the year there has not been any transactions required to be entered in the register maintained under Section 301 of the Companies Act,1956, and aggregating during the year to Rs.5,00,000/- or more in respect of each such party.

VI The company has not accepted deposits from the public and hence the provisions of Section 58 A of the Companies Act, 1956 and the rules framed there under are not applicable. In the company case, the Company Law Board has passed no order.

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

VIII In our opinion, and according to the information given to us the provisional of Section 209 (1) (d) of the Companies Act 1956, are not applicable to the company.

IX According to the records, the Company is generally regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education & Protection Fund, Employes state Insurance, Income tax, Sales tax, Wealth tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it. There are no undisputed statutory dues that are outstanding at the end of the Financial year which have been due by more than 6 months.

X As the Accumulated Losses exceed the Net Worth of the Company, the Company remains a Sick Industrial Company within the meaning of Sick Industrial Company (Special Provisions) Act, 1985. It has incurred Cash Losses in the Current Financial year.

XI On the basis of the records examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to Financial institutions, Banks or Debenture Holders.

XII As explained to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or any other securities and hence maintenance of documents and records relating to such items are not applicable.

XIII The provisions of any special status applicable to chit funds are not applicable as the company is not a nidhi/ has a mutual benefit fund/ society.

XIV In respect of investments dealt or traded by the company, proper records are maintained in respect of transactions and contracts and timely entries have been made therein. All investments are held by the company in its own name.

XV The company has not given any guarantee for loans taken by others from banks or financial institutions.

XVI The company has not taken any term loan during the year covered by our audit.

XVII Based on our examination of the books of accounts and Balance Sheet of the company we are of the opinion that funds raised on short term basis have not been used for long term investment.

XVIII The company has not made any preferential allotments of shares during the year.

XIX The company has not issued any debenture during the year.

XX The company has not raised any money by public issues during the year.

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

Place: Coimbatore

Date: 31.05.2013

For ANJANA & CO

(FRNNO.006724S)

Chartered Accountants

PRAVIN KUMAR MAHESHWARI

Partner

(Membership No. 026866)


Mar 31, 2012

We have audited the attached Balance Sheet of Flora Textiles Limited as at 31st March 2012, the Profit and Loss Account for the year ended and Cash flow statement 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.

1. 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 test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditors Report) Order, 2003, issued by the 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 paras 4 & 5 of the said order.

3. We further report that

(a) We have obtained all the information and explanations which is 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 such books.

(c) The Balance Sheet, Profit & Loss Account and Cash flow statement dealt with by this report are in agreement with the books of accounts of the company.

(d) In our opinion, the Profit & Loss account .Balance Sheet and Cash flow statement dealt with by this report comply with Accounting Standards specified by The Institute of Chartered Accountants of India referred to in sub-section 3 ( C ) of Section 211 of the Companies Act, 1956.

(e) Based on the representations made by the Directors as on March 31, 2012 and taken on record by the Board of Directors of the company and information and explanation given to us , none of the Directors is 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 accounts read together with the accounting policies and other notes, thereon gives the information required by Companies Act, 1956, in the manner so required and present 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 2012

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

(c) In the case of the Cash flow statement for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH (2) OF OUR AUDIT REPORT OF EVEN DATE OF FLORA TEXTILES LIMITED

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

(b) As explained to us, according to the practice of the company fixed assets are physically verified by the management at reasonable intervals in a phased verification programme, which in our opinion, is reasonable looking at the size of the company and the nature of its business. During the year, as informed to us no material discrepancies have been notified on such verification.

(c) During the year, the company has not disposed off substantial part of its fixed assets so as to affect its going concern;

II a) As explained to us the inventories have been physically verified during the year, by the Management.

b) The procedures, as explained to us which are followed by the management for physical verification of inventories are in our opinion adequate in relation to the size of the company and the nature of the business.

c) The company is maintaining proper records of inventory and it is told to us that the discrepancies that were noticed in the course of physical verification have been properly dealt with in the book of accounts

III The Company has not granted/taken any loan secured or unsecured to/from companies Firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 and hence matters regarding rate of interest, terms and conditions of loans, repayments and overdue amounts more than one lakh of rupees are not applicable.

IV In our opinion and according to the information 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 the purchase of inventory and fixed assets and for the sale of goods. During the course of audit no major weakness has been noticed in the Internal Controls.

V As explained to us, during the year there has not been any transactions required to be entered in the register maintained under Section 301 of the Companies Act,1956, and aggregating during the year to Rs.5,00,000/- or more in respect of each such party.

VI The company has not accepted deposits from the public and hence the provisions of Section 58 A of the Companies Act, 1956 and the rules framed there under are not applicable. In the company case, the Company Law Board has passed no order.

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

VIII In our opinion, and according to the information given to us the provisional of Section 209 (1) (d) of the Companies Act 1956, are not applicable to the company.

IX (a) According to the records, the Company is generally regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education 8 Protection Fund, Employees state Insurance, Income tax, Sales tax, Wealth tax, Customs Duty, Excise Duty, Cess and other statutory dues applicable to it. There are no undisputed statutory dues that are outstanding at the end of the Financial year which have been due by more than 6 months.

(b) On the basis of our examination of the documents and records, the disputed statutory dues that have not been deposited with the appropriate authorities are as under:

Nature of the Dues Amount in Rs. Forum where Dispute is pending

1. Customs Duty 7120395 CEGAT

X As the Accumulated Losses exceed the Net Worth of the Company, the Company remains a Sick Industrial Company within the meaning of Sick Industrial Company (Special Provisions) Act, 1985. It has incurred Cash Losses in the Current Financial year.

XI On the basis of the records examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to Financial institutions, Banks or Debenture Holders.

XII As explained to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or any other securities and hence maintenance of documents and records relating to such items are not applicable.

XIII The provisions of any special status applicable to chit funds are not applicable as the company is not a nidhi/ has a mutual benefit fund/ society.

XIV In respect of investments dealt or traded by the company, proper records are maintained in respect of transactions and contracts and timely entries have been made therein. All investments are held by the company in its own name.

XV The company has not given any guarantee for loans taken by others from banks or financial institutions.

XVI The company has not taken any term loan during the year covered by our audit.

XVII Based on our examination of the books of accounts and Balance Sheet of the company we are of the opinion that funds raised on short term basis have not been used for long term investment.

XVIII The company has not made any preferential allotments of shares during the year.

XIX The company has not Issued any debenture during the year.

XX The company has not raised any money by public issues during the year.

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

Place: Coimbatore

Date: 31.05.2012 For ANJANA & CO

(FRN No. 006724S)

Chartered Accountants

PRAVIN KUMAR MAHESHWARI

Partner

(Membership No. 26866)


Mar 31, 2010

We have audited the attached Balance Sheet of FLORA TEXTILES LIMITED, as at 31 March, 2010, the Profits 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 in these financial statements based in our audit.

1. We conducted our audit in accordance with the auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial-statements are free from any material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statement. As audit also includes, assessing the overall presentation of the financial statement. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditors Report) Order, 2003, issued by the Government on 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 paras 4 & 5 of the said order.

3. We further 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 the books of the Company;

(iii) The Balance Sheet, Profit & Loss Account and the Cash Flow Statement dealt with by this report are in agreement with books of account of the Company

(iV) In our opinion, Balance Sheet, Profit & Loss Account and the 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) Based on the representations made by the Directors as on 31 March, 2010 and taken on record by the Board of Directors of the Company and the information and explanations given to us, none of the Directors is, as at 31 March, 2010, prima facie disqualified from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(Vi) 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 accounting policies and other notes thereon, give the information required by the Companies Act, 1956, in the manner so required and present a true and fair view in conformity with the accounting principles generally accepted in India;

(a) in case of the Balance Sheet, of the state of affairs of the Company as at 31 March, 2010

(b) in case of the Profit and Loss Account, of the loss for the year ended on that date.

(c) in case of the Cash Flow Statement, of the Cash Flows for the year as on that date.

ANNEXURE REFERRED TO IN PARAGRAPH (2) OF OUR AUDIT REPORT OF EVEN DATE OF FLORA TEXTILES LIMITED

(I) (a) The company has maintained proper records showing full particulars including Quantitative datails and situation of fixed assets.

(b) As explained to us, according to the practice of the company Fixed Assets are physically verified by the management at reasonable intervals in a phased verification programme, which in our opinion, is reasonable looking at the size of the company and the nature of its business. During the year, as informed to us no material discrepancies have been noticed on such verification.

(c) During the year, the company has not disposed off substantial part of its fixed assets so as to affect its going concan;

(ii) (a) As explained to us the inventories have been physically verified during the year, by the management.

(b) The procedures, as explained to us, which are followed by the management for physical verification of inventories are in our opinion adequate in relation to the size of the company and the nature of the business.

(c) The company is maintaining proper records of inventory and it is told to us that the discrepancies that were noticed in the course of physical verification have been properly dealt with in the books of accounts.

(iii) The company has not granted / taken any loan secured or unsecured to / from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, and hence matters regarding rate of interest, terms and conditions of loans, repayments and overdue amounts more than one lakh of rupees are not applicable.

(iv) In our opinion and according to the information 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 the purchase of inventory of inventory and fixed assets and for the sale of goods. During the course of audit no major weakness has been noticed in the Internal Controls.

(V) As explained to us, during the year there not been any transactions required to be entered in the register maintained under Section 301 of the Companies Act, 1956, and aggregating during the year to Rs. 5,00,000/-or more in respect of each such party.

(Vi) The company has not accepted deposits from the public and hence the provisions of Section 58 A of the Companies Act, 1956 and the rules framed there under are not applicable. In the companys case, the Company Law Board has passed no order

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

(Viii) In our opinion and according to the information given to us the provisions of Section 209 (1 )(d) of the Companies Act, 1956 are not applicable to the company.

(iX) (a) According to the records of the company the company is generally regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education & Protection Fund, Employees state Insurance, Income tax, Sales tax, Wealth tax. Customs Duty, Excise Duty, Cess and other statutory dues applicable to it. There are no statutory dues that are outstanding at the end of the Financial year which have been due by more than 6 months.

(b) On the basis of our examination of the documents and records, the disputed statutory dues that have not been deposited with the appropriate authorities are as under:

Nature of the Dues Amount Forum where Dispute is pending In Rs.

1. Customs Duty 71,20,395.00 CEGAT

(x) As the Accumulated Losses exceed the Net Worth of the Company, the Company remains a Sick Industrial Company within the meaning of Sick Industrial Company (Special Provisions) Act, 1985. However it has not incurred Cash Losses in both the Current Financial year and also the Financial Year immediately preceding the current Financial Year.

(xi) On the basis of the records examined by us and the information and explanations given to us, the company has not defaulted in repayment of dues to Financial Institution, banks or Debenture Holders.

(xii) As explained to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or any other securities, and hence maintenance of documents and records relating to such items are not applicable.

(xiii) The provisions of any special statute applicable to chit fund are not applicable as the company is not a nidhi / has a mutual benefit fund/society.

(xiv) In respect of investments dealt or traded by the company, proper records are maintained in respect of transactions and contracts and timely entries have been made therein. All investments are held by the company in its own name.

(xv) The company has not given any guarantee for loans taken by others from banks or financial institutions

(xvi) The company has not taken any term loans during the year covered by our audit.

(xvii) Based on our examination of the Books of Accounts and Balance Sheet ot the Company, we are of the opinion that funds raised on short term basis have not been used for long term investment.

(xviii) The company has not made any preferential allotment of shares during the year. (xix) The company has not raised any debentures during the year (::x) The company has not raised any money by public issues during the year.

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

For and on behalf of

ANJANA & CO

Chartered Accounts

Pravin Kumar Maheshwari

Partner

(Membership No: 26866)


Mar 31, 2003

1. We have audited the attached Balance Sheet of Flora Textiles Limited as at 31st March 2003 and the Profit and Loss Account 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

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perfom the Audit to obtain reasonable assurance about whether financial statements are free of material misstatement. An Audit includes examining on test basis, evidence supporting the amount and disclousers in the financial statements. An audit also includes assesing the accounting principles used and significant estimates made by the management, as wellas evaluating the overall financial statement presentation. We believe that our Audit provides a reasonable basis for our opinion.

3. As required by the Manufacturing and Other Companies (Auditors Report) Order, 1988 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956 we enclose in the annexure, a statement on the matters specified in paragraph 4 and 5 of the said order:

4. Further to our comments in the Annexure referred to in paragraph 3 above:

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) Proper books of accounts as required by law have been kept by the company so far as appears from our examination of such books.

c) The Balance Sheet and the Profit & Loss Account referred to in this report are in agreement with the Books of Accounts of the Company.

d) In our opinion, the Profit & Loss Account and the Balance Sheet comply with the requirements of the Accounting Standards specified by The Institute of Chartered Accountants of India referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956.

e) On the basis of written representation received from the Directors as on March 31,2003 and taken on record by the Board of Directors we report that none of the Director is disqualified as on March 31, 2003 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 explanation given to us, the said accounts read with the notes thereon gives the information required by Companies Act, 1956 in the manner so required and give a true and fair view in confirmity 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 2003 and

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

ANNEXURE TO THE AUDITORS REPORT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT

OF EVEN DATE

1) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. As informed to us, fixed assets have been physically verified by the Management during the year and no serious discrepancies have been noticed on such verification,

2) None of the Fixed Assets has been revalued during the year.

3) The Management conducted physical verification of Stocks of finished goods, spare parts and raw materials at reasonable intervals.

4) The procedures for physical verification of stocks followed by the Management were reasonable and adequate to the size of the Company and nature of business.

5) No material discrepancies were noticed on physical verification of stocks as compared to the book records.

6) On the basis of examination of the stocks, in our opinion, the valuation of stocks of raw materials, finished and semi finished goods, stores and spares, were fair and proper and is in accordance with the normally accepted accounting principles and is on the same basis as in the earlier year.

7) The Company has taken unsecured loans from Companies, firms and other parties listed in the register maintained U/s 301 of the Companies Act, 1956 and also from Companies under the same Management as defined under sub section 1 (B) of section 370 of the Companies Act, 1956. The rate of interest and other terms and conditions on such loans are not prima facie prejudicial to the interest of company.

8) The Company has not granted any loans secured or unsecured to Companies, firms or other parties listed in the registers maintained U/s 301 of the Companies Act, 1956. In terms of sub section (6) of section 370 of the Companies Act 1956 the provision of the section are not applicable to a company on or after 31 st October 1998

9) No loans or advances in the nature of loans granted by the company to any party except advances to staff which are being repaid in stipulated installments without interest.

10) The Company has adequate internal control procedures commensurate with the size of the Company and nature of its business for purchase of stores, raw materials including components, plant and machinery equipment and other assets and for the sale of goods.

11) According to the information and explanations given to us there were no transactions for purchase of goods and materials and sale of goods, material and services, made in pursuance of contracts or arrangements entered in the registers maintained U/s 301 of the Companies Act, 1956, aggregating during the year to Rs. 50,000/- (Rupees Fifty Thousand only) or more in respect of each party.

12) There were no unserviceable or damaged stores, raw materials of finished goods requiring provision in the account for loss.

13) The Company has accepted deposits from Directors, their Relatives and Associates, without extending any invitation to the public.

14) The Company is maintaining reasonable records for the sale and disposal of realisable By-Products and for sale of scraps.

15) The Company has an internal Audit System which in our opinion is commensurate with the size and nature of Business.

16) The company claims that it has maintained the books of accounts pursuant to the rules made by the Central Government for the maintenance of cost records U/s 209(1 )(d) of the Companies Act, 1956. However, we have not made examination of such records.

17) According to the books of Company, the Provident Fund dues and Employees State Insurance dues have been deposited regularly with the appropriate authorities.

18) Undisputed amount relating to income tax payable, for which is outstanding, for more than 6 months is Rs. 1,24,332/- Other than the above, no undisputed amounts payable in respect of sales tax, customs duty and excise duty, which were outstanding as at the close of the year for a period of more than 6 months from the date on which it became payable.

19) In our opinion and as explained to us, none of the personal expenses of the employees or Directors has been charged to the revenue of the Company, other than those paid under contractual obligations or in accordance with generally accepted business practice.

20) The Company is a Sick Industrial Company within the meaning of Clause (0) of Sub-section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.

For ANJANA & CO

Chartered Acccountants

PRAVIN KUMAR MAHESWARI

PARTNER

Place : Coimbatore Date : 31.05.2003


Mar 31, 2002

1. We have audited the attached Balance Sheet of Flora Textiles Limited as at 31st March 2002 and the Profit and Loss Account for the year ended on that date annexed thereto. These Financial statesment are the responsibility of the companys Management. Our responsibility is to express an opinion on these Financial statements based on our Audit

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perfom the Audit to obtain reasonable assurance about whether financial statements are free of material misstatement. An Audit includes examining on test basis, evidence supporting the amount and disclousers in the financial statements. An audit also includes assesing the accounting principles used and significant estimates made by the management, as wellas evaluating the overall financial statement presentation. We believe that our Audit provides a reasonable basis for our opinion.

3. As required by the Manufacturing and Other Companies (Auditors Report) Order, 1988 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956 we enclose in the annexture, a statement on the matters specified in paragraph 4 and 5 of the said order:

4. Further to our comments in the Annexure referred to in paragraph 3 above :

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) Proper books of accounts as required by law have been kept by the company so far as appears from our examination of such books.

c) The Balance Sheet and the Profit & Loss Account referred to in this report are in agreement with the Books of Accounts of the Company.

d) In our opinion, the Profit & Loss Account and the Balance Sheet comply with the requirements of the Accounting Standards specified by The Institute of Chartered Accountants of India referred to in Sub-section (3C) of Section 211 of the Companies Act, 1956 to the extent possible.

e) On the basis of written representation received from the Directors as on March 31,2002 and taken on record by the Board of Directors we report that none of the Director is disqualified as on March 31, 2002 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 explanation given to us, the said accounts read with the notes thereon gives the information required by Companies Act, 1956 in the maanner so required and give a true and fair view in confirmity 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 2002 and

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

ANNEXURE TO THE AUDITORS REPORT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

1) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. As informed to us, fixed assets have been physically verified by the Management during the year and no serious discrepancies have been noticed on such verification.

ii) None of the Fixed Assets has been revalued during the year.

3) The Management conducted physical verification of Stocks of finished goods, spare parts and raw materials at reasonable intervals.

4) The procedures for physical verification of stocks followed by the Management were reasonable and adequate to the size of the Company and nature of business.

5) No material discrepancies were noticed on physical verification of stocks as compared to the book records.

6) On the basis of examination of the stocks, in our opinion, the valuation of stocks of raw materials, finished and

semi finished goods, stores and spares, were fair and proper and is in accordance with the normally accepted accounting principles and is on the same basis as in the earlier year.

7) The Company has taken unsecured loans from Companies, firms and other parties listed in the register maintained U/s 301 of the Companies Act,1956 and also from Companies under the same Management as defined under sub section 1 (B) of section 370 of the Companies Act, 1956. The rate of interest and other terms and conditions on such loans are not prima facie prejudicial to the interest of company.

8) The Company has not granted any loans secured or unsecured to Companies, firms or other parties listed in the registers maintained U/s 301 of the Companies Act, 1956 or to companies under the same management as defined under section 371 (B) of the Companies Act, 1956.

9) No loans or advances in the nature of loans granted by the company to any party except advances to staff which are being repaid in stipulated installments without interest.

10) The Company has adequate internal control procedures commensurate with the size of the Company and nature of its business for purchase of stores, raw materials including components, plant and machinery equipment and other assets and for the sale of goods.

11) According to the information and explanations given to us there were no transactions for purchase of goods and materials and sale of goods, material and services, made in pursuance of contracts or arrangements entered in the registers maintained U/s 301 of the Companies Act, 1956, aggregating during the year to Rs. 50,000/- (Rupees Fifty Thousand only) or more in respect of each party.

12) There were no unserviceable or damaged stores, raw materials of finished goods requiring provision in the account for loss.

13) The Company has accepted deposits from Directors, their Relatives and Associates, without extending any invitation to the public.

14) The Company is maintaining reasonable records for the sale and disposal of realisable By-Products and for sale of scraps.

15) The Company has an internal Audit System which in our opinion is commensurate with the size and nature of Business.

16) The company claims that it has maintained the books of accounts pursuant to the rules made by the Centra! Government for the maintenance of cost records U/s 209(1)(d) of the Companies Act, 1956. However, we have not made examination of such records.

17) According to the books of Company, the Provident Fund dues and Employees State Insurance dues have been deposited regularly with the appropriate authorities.

18) Undisputed amount relating to income tax payable, for which is outstanding, for more than 6 months is Rs. 1,24,332/- Other than the above, no undisputed amounts payable in respect of sales tax, customs duty and excise duty, which were outstanding as at the dose of the year for a period of more than 6 months from the date on which it became payable.

19) In our opinion and as explained to us, none of the personal expenses of the exployees or Directors has been charged to the revenue of the Company, other than those paid under contractual obligations or in accordance with generally accepted business practice.

20) The Company is a Sick Industrial Company within the meaning of Clause (0) of Sub-section 3 of the Sick Industrial Companies (Special Provisions)

For ANJANA & CO

Chartered Acccountants PRAVIN KUMAR MAHESWARI PARTNER

Place : Coimbatore Date : 31.07.2002

 
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