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Auditor Report of H P Cotton Textiles Mills Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of H P COTTON TEXTILE MILLS LIMITED ("the Company"), which comprise the Balance Sheet as at 31st 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 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 and presentation 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 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these 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 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 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, of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the Note 27 to the financial statements as under:-

The Company has received the intimation from Insurer that it has approved the insurance claim; relating to free incident during the financial year 2010-11, for Rs.17160 thousand. For this claim the company had made provision of Rs. 33362 thousand. The company; not being satisfied with the claim approved by the insurer, has referred such matter to the appellate forum and the first appellate forum is arbitration. Company has received Interim Payment of Rs.12870 thousand during the financial year 2014-15,which has been credited to Insurance Claim Receivable.

Pending decision of the appellate forum; no provision for loss [the difference between the insurance claim as per books of account and claim approved by the insurer] has been made in the books of account. Adjustment if any, arising upon the settlement of claim will be made in the year when the insurance claim is finally settled.

Our opinion is not modified in respect of these matters.

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 term of Sub-Section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in the Paragraph 3 and 4 of the Order, to the extent applicable.

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 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 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, and

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 No. 26 and 27 to the financial statements)

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

iii. There was no amounts that was required to be transferred by the company to the Investor Education and Protection Fund .

Annexure to Independent Auditors' Report

Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date

As required by the Companies (Auditors' Report) Order, 2015 and according to the information and explanations given to us and on the basis of such checks as we considered appropriate, we state that in our opinion:-

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

(b) The management at the year-end has physically verified all the assets. No material discrepancy was noticed on such verification. The periodicity of the physical verification is reasonable having regard to the size of the company and nature of its assets.

(ii) (a) The management has made physical verification of the inventories at reasonable intervals.

(b) The procedures for physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c ) The company is maintaining proper record of the inventories. No material discrepancy was noticed on physical verification of the inventories.

(iii) The company has not granted any loan; secured or unsecured, to Companies, Firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, provisions of clause 3(iii) of the Companies (Auditors' Report) order 2015 are not applicable to the company.

(iv) There are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regards to the sale of goods and sale of services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

(v) The Company has not accepted deposits from the public. Accordingly, provisions of clause 3(v) of the Companies (Auditors' Report) order 2015 are not applicable to the company.

(vi) In respect of the activities carried on by the company, the maintenance of cost records has not been specified by the Central Government under sub section (1) of section 148 of the Companies Act, 2013. Accordingly, provisions of clause 3(vi) of the Companies (Auditors' Report) order 2015 are not applicable to the company.

(vii) During the year undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues applicable to the company have generally been deposited in time with the statutory authorities.

No undisputed amounts payable in respect of provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues applicable to the company were in arrear as at 31st March 2015 for a period of more than six months from the date they become payable.

(b) There are no material dues of income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax and cess and other material statutory dues which have not been deposited on account of any dispute.

(c) During the year under audit no amount was required to be transferred to investor education and protection fund in accordance with the relevant provision of Companies Act, 1956 and rules made there under.

(viii) The company does not have accumulated losses. The company has not incurred cash losses during the financial year covered by our audit and during the immediately preceding financial year.

(ix) The Company has not defaulted in repayment of dues to banks. The company has neither borrowed funds from financial institutions nor issued debentures. Accordingly, the provisions of clause 3(ix) of the Companies (Auditors' Report) Order, 2015 in respect of repayment of dues to financial institutions and debenture holders are not applicable to the company.

(x) The company has not given guarantees for loans taken by others from banks or financial institutions. Accordingly, the provisions of clause 3(x) of the Companies (Auditors' Report) Order, 2015 are not applicable to the company.

(xi) The term loans raised by the company were applied for the purpose those were obtained.

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

For A.K. ASSOCIATES

Chartered Accountants

(A.K.GUPTA)

PARTNER

Membership No. 16533

Firm's Registration No. 000596N

Place of Signature: NEW DELHI

Date: 29th May, 2015


Mar 31, 2014

We have audited the accompanying financial statements of H P Cotton Textile Mills Limited ("the Company"), which comprise the Balance Sheet as at March 31,2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including Accounting Standards notified under the Company Act, 1956 ("the Act"), (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant too the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

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, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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

(a) In the case of the Balance Sheet of the state of affairs of the Company as at March 31,2014;

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

(c) In the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Emphasis of Matter

We draw attention to Note No. 16 to the Balance Sheet wherein the Company is carrying Insurance Claim Receivable of Rs. 33362 thousand.

"The Company has received the intimation from Insurer that it has approved the insurance claim; relating to fire incident during the financial year 2010-11, for Rs. 17160 thousand. For this claim the company had made provision of Rs. 33362 thousand.

The company; not being satisfied with the claim approved by the insurer, has referred such matter to the appellate forum and the first appellate forum is arbitration.

Pending decision of the appellate forum; no provision for loss [the difference between the insurance claim as per books of account and claim approved by the insurer] has been made in the books of account. Adjustment; if any, arising upon the settlement of claim will be made in the year when the insurance claim is finally settled" and we have relied on Management''s contention. However, our opinion is not qualified in respect of above matter.

Report on Other Legal and Regulatory Requirements

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

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

a. We have obtained all the information and explanation which to the best of our knowledge and belief were necessary of our audit.

b. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

c. The Balance Sheet, 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 Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting standards notified under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs).

e. On the basis of the written representations received from the directors as on March 31, 2014, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of Section 274(1 )(g) of the Act.

Annexureto Independent Auditors'' Report

Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date.

According to the information and explanations given to us and on the basis of such checks as we considered appropriate, we state that in our opinion:-

(i) (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 the year end. No material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off a substantial part of its fixed asserts. Accordingly the provisions of clause 4(i) ( c ) of the Companies (Auditor''s Report) Order 2003 are not applicable.

(ii) (a) The inventories except lying with third parties and in transit have been physically verified during the year by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable.

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

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

(iii) (a) The company has taken loan from four other companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 3422 thousand and the year-end balance of loans taken from such parties was Rs. 3422 thousand.

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

(c) The company is regular in repaying the principal and payment of interest as stipulated.

(d) The company has not granted any loan to companies, firms or other parties as listed in the register maintained under section 301 of the Companies Act, 1956. Accordingly provisions of clause 4(iii) (a) to (d) of the Companies (Auditors'' Report) order2003 are not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regards to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control.

(v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been duly entered.

(b) In our opinion and according to the information and explanations given to us, no transactions was made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakh in respect of each party during the year,

(vi) The company has not accepted deposits from the public. Accordingly provisions of clause 4(vi) of the Companies (Auditors'' Report) order 2003 are not applicable to the company.

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

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

(ix) (a) Undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth, custom duty, excise duty, cess and other material statutory dues applicable to the company have generally been deposited in time with the statutory authorities.

(b) According to the information and explanation given to us, there are no disputed statutory dues payable by the company in respect of sales tax, income tax, wealth, custom duty, excise duty, cess and other material statutory dues

(x) The company does not have accumulated losses. The company has not incurred cash losses during the financial year covered by our audit and during the immediately preceding financial year.

(xi) According to the information and explanations given to us, during the year the company has not defaulted in repayment of dues to financial institutions and/ or banks.

(xii) Keeping in view the business carried on by the company at present the provisions of clause 4

(xii) of the Companies (Auditors'' Report) order 2003 are not applicable to the company.

(xiii) Keeping in view the business carried on by the company at present the provisions of clause 4

(xiii) of the Companies (Auditors'' Report) order 2003 are not applicable to the company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xv) The company has not given guarantees for loans taken by others from banks or financial institutions. Accordingly, the provisions of clause 4(xv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xvi) The term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we report that the company has not used funds raised on short term basis for long term investment and vice versa.

(xviii) During the year under audit the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(xviii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xix) During the year under audit the company has not issued debentures. Accordingly, the provisions of clause 4(xix) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xx) During the year under audit the Company has not raised funds by way of public issue. Accordingly, the provisions of clause 4(xx) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company

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

For A K ASSOCIATES, Chartered Accountants

(CAAK GUPTA) PLACE: New Delhi M.No.16533 DATE: 30/05/2014 Firm Registration No. 000596N


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of H P Cotton Textiles Mills Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant too the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

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

As explained in Note 15 to the audited accounts; The Company has received intimation from the insurer that it has approved the insurance claim; relating to fire incident during the financial year 2010-11, fort 17160 thousand. For this claim the company had made provision ofRs.. 33362 thousand.

The company; not being satisfied with the claim approved by the insurer, has referred such matter to the appellate forum and the first appellate forum is arbitration. Therefore, no provision for loss (the difference between the insurance claim as per books of account and claim approved by the insurer) has been made in the books of account. Adjustment; if any, arising upon the settlement of claim will be made in the year when the insurance claim is finally settled.

Subject to above, 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

(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 Statement of Profit and Loss, 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

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

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

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

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

c) The Balance Sheet, 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 Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting standards referred to in Section 211(3C)oftheAct.

e) On the basis of the written representations received from the directors as on March 31, 2013, 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 Section 274(1 )(g) of the Act.



Annexure to Independent Auditors'' Report

Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date.

According to the information and explanations given to us and on the basis of such checks as we considered appropriate, we state that in our opinion:-

(i) (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 the year end. No material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off a major part of the plant and machinery. Accordingly the provisions of clause 4(i) (c) of the Companies (Auditor''s Report) Order 2003 are not applicable.

(ii) (a) The inventories except lying with third parties and in transit have been physically verified during the year by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable.

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

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

(iii) (a) The company has taken loan from four other companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 3422 thousand and the year-end balance of loans taken from such parties was Rs. 3422 thousand.

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

(c) The company is regular in repaying the principal and payment of interest as stipulated.

(d) The company has not granted any loan to companies, firms or other parties as listed in the register maintained under section 301 of the Companies Act, 1956. Accordingly provisions of clause 4(iii) (a) to (d) of the Companies (Auditors'' Report) order 2003 are not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regards to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control.

(v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been duly entered.

(b) In our opinion and according to the information and explanations given to us, no transactions was made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. five lakh in respect of each party during the year.

(vi) The company has not accepted deposits from the public. Accordingly provisions of clause 4(vi) of the Companies (Auditors'' Report) order 2003 are not applicable to the company.

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

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

(ix) (a) Undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth, custom duty, excise duty, cess and other material statutory dues applicable to the company have generally been deposited in time with the statutory authorities.

(b) According to the information and explanation given to us, there are no disputed statutory dues payable by the company in respect of sales tax, income tax, wealth, custom duty, excise duty, cess and other material statutory dues.

(x) The company does not have accumulated losses. The company has not incurred cash losses during the financial year covered by our audit and during the immediately preceding financial year.

(xi) According to the information and explanations given to us, during the year the company has not defaulted in repayment of dues to financial institutions and/ or banks.

(xii) Keeping in view the business carried on by the company at present the provisions of clause 4 (xii) of the Companies (Auditors'' Report) order 2003 are not applicable to the company.

(xiii) Keeping in view the business carried on by the company at present the provisions of clause 4 (xiii) of the Companies (Auditors'' Report) order 2003 are not applicable to the company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, dePentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xv) The company has not given guarantees for loans taken by others from banks or financial institutions. Accordingly, the provisions of clause 4(xv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xvi) The term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we report that the company has not used funds raised on short term basis for long term investment and vice versa.

(xviii) During the year under audit the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(xviii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xix) During the year under audit the company has not issued debentures. Accordingly, the provisions of clause 4(xix) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xx) During the year under audit the Company has not raised funds by way of public issue. Accordingly, the provisions of clause 4(xx) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company

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

For A K ASSOCIATES,

Chartered Accountants

(CA AK GUPTA)

PLACE : New Delhi M. No. 16533

DATE : 30/05/2013 Firm Registration No. 000596N


Mar 31, 2012

1. We have audited the attached Balance Sheet of H P COTTON TEXTILE MILLS LIMITED, as at 31st March 2012, the Statement of Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. '

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

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. As explained in Note 16 to the Balance Sheet that Insurance Claim receivable amounting to Rs. 33999 thousand is subject to settlement by the insurance company.

Adjustment; if any, arising upon the settlement of claim will be made during the year in which claim is settled by the insurance company.

5. Further to our comments in the Annexure referred to above, we report that:

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

(ii) In our opinion, proper books of account as required by law have been kept by the company so far, as appears from our examination of those books.

(iii) The Balance Sheet, Statement of Profit and Loss Account and Cash Flow Statements 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 Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub- section (3C) of section 211 of the Companies Act, 1956.

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

(vi) Subject to the foregoing, in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the matter so required and give a true and fair view in conformity with the accounting principles generally accepted in India

(i) In the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March 2012.

(ii) In the case of the Statement of Profit and Loss Account, of the Profit of the Company for the year ended on that date, and

(iii) In the case of the Cash Flow Statement, of the Cash Flows of the Company for the year ended on that date.

Re: H P COTTON TEXTILE MILLS LIMITED

Annexure to the Auditors' Report referred to in paragraph 3 of our report of even date.

As required by the Companies (Auditors' Report) Order, 2003 and according to the information and explanations given to us and on the basis of such checks as we considered appropriate, we state that in our opinion:- _

(i) (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 the year end. No material discrepancies were noticed on such verification.-

(c) During the year, the company has not disposed off a major part of the plant and machinery. Accordingly the provisions of clause 4(i)(c) of the Companies (Auditor's Report) Order 2003 are not applicable.

(ii) (a) The inventories except lying with third parties and in transit have been physically verified

during the year by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable.

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

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

(iii) (a) The company has taken loan from four other companies covered in the register maintained

under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.3422 thousand and the year-end balance of loans taken from such parties was Rs. 3422 thousand.

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

(c) The company is regular in repaying the principal and payment of interest as stipulated.

(d) The company has not granted any loan to companies, firms or other parties as listed in the register maintained under section 301 of the Companies Act, 1956. Accordingly provisions of clause 4(iii) (a) to (d) of the Companies (Auditors' Report) order 2003 are not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regards to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control.

(v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the

Companies Act, 1956 have been duly entered.

(b) In our opinion and according to the information and explanations given to us, no transactions was made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakh in respect of each party during the year,

(vi) The company has not accepted deposits from the public. Accordingly provisions of clause 4(vi) of the Companies (Auditors' Report) order 2003 are not applicable to the company.

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

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

(ix) (a) Undisputed statutory dues including provident fund, investor education protection fund,

employees state insurance, income tax, sales tax, wealth, custom duty, excise duty, cess and other material statutory dues applicable to the company have generally been deposited in time with the statutory authorities.

(b) According to the information and explanation given to us, there are no disputed statutory dues payable by the company in respect of sales tax, income tax, wealth, custom duty, excise duty, cess and other material statutory dues

(x) The company does not have accumulated losses. The company has not incurred cash losses during the financial year covered by our audit and during the immediately preceding financial year.

(xi) According to the information and explanations given to us, during the year the company has not defaulted in repayment of dues to financial institutions and/ or banks.

(xii) Keeping in view the business carried on by the company at present the provisions of clause 4 (xii) of the Companies (Auditors' Report) order 2003 are not applicable to the company.

(xiii) Keeping in view the business carried on by the company at present the provisions of clause 4 (xiii) (a) to (d) of the Companies (Auditors' Report) order 2003 are not applicable to the company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xv) The company has not given guarantees for loans taken by others from banks or financial institutions. Accordingly, the provisions of clause 4(xv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xvi) The term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we report that the company has not used funds raised on short term basis for long term investment and vice versa.

(xviii) During the year under audit the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(xviii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xix) During the year under audit the company has not issued debentures. Accordingly, the provisions of clause 4(xix) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xx) During the year under audit the Company has not raised funds by way of public issue. Accordingly, the provisions of clause 4(xx) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company

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

For A. K. ASSOCIATES, Chartered Accountants

(CA A. K. GUPTA) M. No. 16533 Firm Registration No. 000596N

PLACE: New Delhi

DATE: 30/05/2012


Mar 31, 2010

1. We have audited the attached Balance Sheet of H P COTTON TEXTILE MILLS LIMITED, as at 31st March 2010, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

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

(ii) In our opinion, proper books of account as required by law have been kept by the company so far, as appears from our examination of those books.

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

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

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

(vi) Subject to the foregoing, in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the matter so required and give a true and fair view in conformity with the accounting principles generally accepted in India

(i) In the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March 2010.

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

(iii) In the case of the Cash Flow Statement, of the Cash Flows of the Company for the year ended on that date.

Annexure to the Auditors Report referred to in paragraph 3 of our report of even date.

As required by the Companies (Auditors Report) Order, 2003 and according to the information and explanations given to us and on the basis of such checks as we considered appropriate, we state that in our opinion:-

(i) (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 the year end. No material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off a major part of the plant and machinery. Accordingly the provisions of clause 4(i) ( c) of the Companies (Auditors Report) Order 2003 are not applicable.

(ii) (a) The inventories except lying with third parties and in transit have been physically verified during the year by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable.

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

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

(iii) (a) The company has taken loan from four other companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.34.22 lakh and the year-end balance of loans taken from such parties was Rs. 34.22 lakh.

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

(c) The company is regular in repaying the principal amounts as stipulated and has also been regular in the payment of interest as stipulated.

(d) The company has not granted any loan to companies, firms or other parties as listed in the register maintained under section 301 of the Companies Act, 1956. Accordingly provisions of clause 4(iii) (a) to (d) of the Companies (Auditors Report) order 2003 are not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regards to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control.

(v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been duly entered.

(b) In our opinion and according to the information and explanations given to us, no transactions was made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakh in respect of each party during the year,

(vi) The company has not accepted deposits from the public. Accordingly provisions of clause 4(vi) of the Companies (Auditors Report) order 2003 are not applicable to the company.

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

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

(ix) (a) Undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth, custom duty, excise duty, cess and other material statutory dues applicable to the company have generally been deposited in time with the statutory authorities.

(b) According to the information and explanation given to us, there are no disputed statutory dues payable by the company in respect of sales tax, income tax, wealth, custom duty, excise duty, cess and other material statutory dues

(x) The company does not have accumulated losses. The company has not incurred cash losses during the financial year covered by our audit and during the immediately preceding financial year.

(xi) According to the information and explanations given to us, during the year the company has defaulted in repayment of dues to financial institutions and/ or banks as detailed hereunder:-

Repayment of Term Loan from IDBI

Due date of Payment Amount Date of Payment

01/04/2009 300000.00 04/07/2009

01/07/2009 40274.00 04/07/2009

01/07/2009 259726.00 03/08/2009 300000.00

Interest on Term Loan from IDBI

Due date of Payment Amount Date of Payment

01/04/2009 118264.00 23/04/2009

01/04/2009 1179445.00 23/06/2009

1297709.00 01/07/2009 1367286.00 03/08/2009

(xii) Keeping in view the business carried on by the company at present the provisions of clause 4 (xii) of the Companies (Auditors Report) order 2003 are not applicable to the company.

(xiii) Keeping in view the business carried on by the company at present the provisions of clause 4 (xiii) (a) to (d) of the Companies (Auditors Report) order 2003 are not applicable to the company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xv) The company has not given guarantees for loans taken by others from banks or financial institutions. Accordingly, the provisions of clause 4(xv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xvi) The term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we report that the company has not used funds raised on short term basis for long term investment and vice versa.

(xviii) During the year under audit the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(xviii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xix) During the year under audit the company has not issued debentures. Accordingly, the provisions of clause 4(xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xx) During the year under audit the Company has not raised funds by way of public issue. Accordingly, the provisions of clause 4(xx) of the Companies (Auditors Report) Order, 2003 are not applicable to the company

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

For A. K. ASSOCIATES, Chartered Accountants

(CA A. K.GUPTA)

F.C A.

M.No.16533

PLACE: New Delhi Firm Registration No. 000596N

DATE:31/05/ 2010



 
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