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Auditor Report of Hindoostan Mills Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of HINDOOSTAN MILLS LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Director 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 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 provision 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 judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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

We have taken into account the provision 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 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

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

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

and

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

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order, 2015 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the order, to the extent applicable.

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

d. In our opinion the aforesaid financial statements comply with accounting standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. On the basis of written representations received from the directors as on March 31, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of section 164(2) of the Act.

f. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The company has disclosed the impact of pending litigations on its financial position in its financial statement - Refer to Note No. 27B Point No. III(A), III(B) and III(C) of other notes to the financial statements.

ii. The company does not have any long-term contracts including derivatives contracts and hence there are no material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company

Annexure to the Independent Auditors' Report The Annexure referred to in our Independent Auditors 'Report to the members of the Company on the financial statements for the year ended 31st March 2015, we report that :

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) We are informed that the physical verification of Fixed Assets was carried out by the management at year end. According to the information and explanations given to us, discrepancies noticed on such verification were not material and have been dealt with appropriately in the books of accounts.

ii. In respect of its Inventories:

(a) As explained to us, Inventories were physically verified during the year by the management at reasonable intervals except inventory lying with third party processors as on 31st March, 2015 aggregating to Rs 3.86 lakhs (previous year Rs. 7.37 lakhs) for which confirmations have been obtained.

(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 not granted any loans to any party, covered in the register maintained under section 189 of the Companies Act, 2013 and hence clause 3(iii) of the Order is not applicable

iv. In our opinion and according to the information and explanations given to us, there is an adequate Internal Control System commensurate with the size of the Company and the nature of its business for the purchase of Inventory and Fixed Assets and for the sale of goods and services. We have not noticed any major weaknesses in the Internal Control System during the course of audit.

v. The Company has not accepted any Deposits and hence, the directions of the Reserve Bank of India and the provisions of section 73 to 76 and other relevant provision of the Companies Act 2013 and its rules, are not applicable. Hence clause 3(v) of the Order is not applicable.

vi. We have broadly reviewed the books of accounts and records maintained by the Company relating to the manufacture of textiles pursuant to the order made by the Central Government for the maintenance of Cost Records under Sub-Section 1 of Section 148 of the Companies Act, 2013 and are of the opinion that prima facie the prescribed accounts have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

vii. In respect of statutory dues:

(a) According to the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Sales-Tax, Wealth Tax, Service Tax, Duty of Custom, Duty of Excise, Value Added Tax, Cess and any other statutory dues as applicable with the appropriate authorities during the year, except the arrears of Duty of Custom amounting to Rs. 6.31 Lacs outstanding for more than six months from the date they became payable.

(b) According to the information and explanations given to us, statutory dues aggregating to 381.74 lakhs which have not been deposited as on March 31, 2015 on account of disputes are given below:

Name of Nature of dues Amount (Rs. in Statute lakhs) (Gross)

Income Tax Income Tax dues 3.12 Act,1961

132.34

Central Excise Excise Duty 4.06 Act

2.49

37.96

102.10

39.93

Maharashtra Sales Tax and 29.02 Sales Tax and Central Sales Tax Central Sales Tax

Maharashtra Work contract Tax 30.72 Sales Tax on the transfer of property in goods involved in the execution of the work contract (Reenacted) Act, 1989

Name of Statute Period to which the Forum Where dispute is dues relate pending

Income Tax Act,1961 A.Y. 2007-08 Commissioner of Income Tax.

A.Y. 2010-11 Commissioner of Income Tax.

Central Excise Act 1977-2002 Asst./Dy. Commissioner of Central Excise.

Joint Commissioner of Central Excise

Commissioner (Appeals) of Central Excise

1996-2003 CESTAT

1994-1999 Supreme Court

Maharashtra 2000-01, 2002-03, Dy. Commissioner of sales- Sales Tax and 2009-10 & 2010-11 tax (Appeal)-I Central Sales Tax

Maharashtra Sales 1990-91 to 2000-01 Dy. Commissioner of sales- Tax on the transfer tax (Appeal)-I of property in goods involved in the execution of the work contract (Reenacted) Act, 1989

(c) According to the information and explanations given to us the amounts which were required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under have been transferred to such fund within time.

viii. Company does not have accumulated losses as at the end of the financial year and hence the question of accumulated losses being more than fifty per cent of its net worth does not arise. The Company has not incurred cash losses in the current financial year and the immediate preceding financial year.

ix. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any bank and financial institution during the year. The Company has not issued any debenture during the year.

x. According to information and explanations given to us, the Company has not given guarantees for loans taken by others from banks or financial institutions.

xi. According to information and explanations given to us, and on examination of the balance sheet and other records, we report that the term loan availed by the company has been applied for the purpose for which it is raised.

xii. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For M. A. Parikh & Co. Chartered Accountant Firm Reg. No. 107556W

MUKUL M. PATEL Partner Membership No. 32489

Place: Mumbai Date: 5 th May, 2015


Mar 31, 2014

We have audited the accompanying financial statements of HINDOOSTAN MILLS LIMITED (''the Company''), which comprise the Balance Sheet as at 31st March, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(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"), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013:

e. On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

Annexure referred to in Paragraph 1 of "Report on Other Legal and Regulatory Requirements 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) We are informed that the physical verification of fixed assets was carried out by the management at year end. According to the information and explanations given to us, discrepancies noticed on such verification were not material and have been dealt with appropriately in the books of accounts.

(c) There has not been any substantial disposal of fixed assets during the year and hence the question of the disposal of fixed assets affecting the going concern status of the Company does not arise.

ii. In respect of its inventories:

(a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals except inventory lying with third party processors as on 31st March, 2014 aggregating to Rs. 7.37 lakhs (previous year Rs. 13.33 lakhs) for which confirmations have been obtained.

(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 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. (a) The Company has not granted any loans to any party, covered in the register maintained under section 301 of the Companies Act, 1956 and hence clauses 4(iii) (a), (b), (c) and (d) of the Order are not applicable.

(b) According to the information and explanations given to us, during the year, the Company has received interest bearing unsecured loans repayable on demand unsecured loan from four parties covered in the register maintained under section 301 of the Companies Act, 1956 aggregating to Rs. 400 lakhs and which are since repaid in full during the year. The Maximum amount involved during the year and outstanding balance of such loan as at the year end are Rs. 400 lakhs and Rs. Nil respectively.

(c) The rate of interest and other terms and conditions of such unsecured loans, in our opinion, are not prima facie prejudicial to the interest of the Company.

(d) Since the loans being repayable on demand have been repaid during the year with interest, the question of its regular payment of principal and interest does not arise and hence clause 4(iii)(g) of the Order is not applicable.

iv In our opinion and according to the information and explanations given to us, there is an internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. We have not noticed any major weaknesses in the internal control system during the course of audit.

v. In respect of contracts or arrangements entered in the register maintained in pursuance of section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in section 301 that needed to be entered in the register, maintained under the said section have been so entered.

(b) There is no such transaction (excluding loans reported under paragraph (iii) above), which is in excess of Rs. 5 lakhs in respect of any party.

vi. The Company has not accepted any deposits from the public and hence, the provisions of section 58A, 58AA and its rules, and also the directions of the Reserve Bank of India, or any other relevant provisions of the Act and the rules framed there under are not applicable. Hence clause 4 (vi) of the Order is not applicable.

vii. In our opinion, the internal audit function carried out during the year by a firm of Chartered Accountants appointed by the management is commensurate with the size of the Company and nature of its business.

viii. We have broadly reviewed the books of accounts and records maintained by the Company relating to the manufacture of textiles pursuant to the order made by the Central Government for the maintenance of Cost Records under Section 209(1)(d)of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

ix. In respect of statutory dues:

(a) According to the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Labour Welfare Fund, Income-tax, Wealth Tax, Central Sales-tax, Value Added Tax, Custom Duty, Excise Duty, Cess and any other statutory dues as applicable with the appropriate authorities during the year.

(b) According to the information and explanations given to us, statutory dues aggregating to Rs. 415.13 lakhs which have not been deposited as on March 31, 2014 on account of disputes are given below:

Name Of Statute Nature of dues Amount Period to which (Rs. in the dues relate lakhs) (Gross)

Income Tax Act, 1961 Income Tax dues 3.12 A.Y. 2007-08

132.34 A.Y. 2010-11

Central Excise Act Excise Duty 4.06 1977-2002

2.49

38.04

102.10 1996-2003

44.93 1994-1999

Maharashtra Sales Tax and Sales Tax & 29.02 2000-01, Central Sales Tax Central Sales Tax 2002-03, 2009-10 & 2010-11

Maharashtra Sales Tax on Work contract 59.03 1990-91 to the transfer of property in Tax 2000-01 goods involved in the execution of the work contract (Reenacted) Act, 1989

Name of Statute Forum Where dispute is pending

Income Tax Act, 1961 Commissioner of Income Tax.

Commissioner of Income Tax.

Central Excise Act Asst./Dy. Commissioner of Central Excise.

Joint Commissioner of Central Excise

Commissioner (Appeals) of Central Excise

CESTAT

Supreme Court

Maharashtra Sales Tax and Dy. Commissioner of sales-tax Central Sales Tax (Appeal)-I

Maharashtra Sales Tax on Dy. Commissioner of sales-tax the transfer of property (Appeal)-I in goods involved in the execution of the work contract (Reenacted) Act, 1989

x. The Company does not have accumulated losses as at the end of the financial year and hence the question of accumulated losses being more than fifty per cent of its net worth does not arise. The Company has not incurred cash losses in the current financial year and the immediate preceding financial year.

xi. In our opinion and according to the information and explanations given to us, the Company is not indebted to any bank and hence the question of default in repayment does not arise.

xii. According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities, and hence, the question of maintenance of adequate records for this purpose does not arise.

xiii. In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4 (xiii) of the Order are not applicable to the Company.

xiv In our opinion and according to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. The investments in shares and units of mutual funds have been held by the Company in its name.

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

xvi. To the best of our knowledge and belief and according to the explanations given to us, in our opinion, no term loans have been availed by the Company. Therefore, the provisions of clause 4 (xvi) of the Order are not applicable to the Company.

xvii. According to the information and explanations given to us, and on an overall examination of the balance sheet of the Company, it has not raised funds on short-term basis, which have been used for long-term investment.

xviii. The Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956 and hence the question as to whether the price at which shares have been issued is prejudicial to the interest of the Company does not arise.

xix. According to the information and explanation given to us, the Company has not issued any debentures during the year and hence the question, of creation of security or charge in respect of debentures issued, does not arise.

xx. According to the information and explanation given to us, the Company has not raised funds by way of public issue during the year. Therefore, the provision of clause 4 (xx) of the Order is not applicable to the Company.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For M. A. Parikh & Co. Chartered Accountants Firm Reg. No. 107556W

Mukul M. Patel Partner Place: Mumbai Membership No. 32489 Date: 6th November, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of HINDOOSTAN MILLS LIMITED (the Company), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

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

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

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to in paragraph 1 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) We are informed that the physical verification of fixed assets was carried out by the management at year end. According to the information and explanations given to us, discrepancies noticed on such verification were not material and have been dealt with appropriately in the books of accounts.

(c) There has not been any substantial disposal of fixed assets during the year and hence the question of the disposal of fixed assets affecting the going concern status of the Company does not arise.

ii. In respect of its inventories:

(a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals except cloth lying with third party processors as on 31st March, 2013 aggregating to Rs 13.33 lakhs (previous year Rs. 9.12 lakhs) for which confirmations have been obtained!

(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 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. (a) According to information and explanations given to us, Company has granted interest free unsecured loan repayable on demand to its Subsidiary which is covered in the register maintained under section 301 of the Companies Act, 1956 amounting to Rs.622.96 lakhs. The maximum amount involved during the year and the outstanding balance of such loan as at the year end are Rs. 991.24 lakhs and Rs. 991.24 lakhs respectively.

Since the loan is interest free and repayable on demand, in our opinion:

(b) the terms and conditions of the loan are not prima facie prejudicial to the interest of the company.

(c) The question of its regular payment of principal and interest does not arise.

(d) Since the loan is repayable on demand, the question of their overdue amounts being more than Rs. 1 lakh, does not arise and hence clause 4(iii)(d) of the Order is not applicable.

(e) According to information and explanations given to us, during the year, the Company has not received unsecured loan from a party covered in the register maintained under section 301 of the Companies Act, 1956. However, the Company has received an opening balance of Rs. 90 lakhs, being interest bearing unsecured loan repayable on demand during the previous year and which is since repaid in full during the year. The Maximum amount involved during the year and outstanding balance of such loan as at the year end are Rs. 90 lakhs and Rs. Nil respectively.

(f) The rate of interest and other terms and conditions of such unsecured loans, in our opinion, are not prima facie prejudicial to the interest of the Company.

(g) Since the loans are repaid/repayable on demand, the question of its regular payment of principal and interest does not arise and hence clause 4(iii)(g) of the Order is not applicable.

iv In our opinion and according to the information and explanations given to us, there is an internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. We have not noticed any major weaknesses in the internal control system during the course of audit.

v. In respect of contracts or arrangements entered in the register maintained in pursuance of section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in section 301 that needed to be entered in the register, maintained under the said section have been so entered.

(b) There is no such transaction (excluding loans reported under paragraph (iii) above), which is in excess of Rs. 5 lakhs in respect of any party.

vi. The Company has not accepted any deposits from the public and hence, the provisions of section 58A, 58AA and its rules, and also the directions of the Reserve Bank of India, or any other relevant provisions of the Act and the rules framed there under not are applicable. Hence clause 4 (vi) of the Order is not applicable.

vii. In our opinion, the internal audit function carried out during the year by a firm of Chartered Accountants appointed by the management are commensurate with the size of the Company and nature of its business.

viii. We have broadly reviewed the books of accounts and records maintained by the Company relating to the manufacture of textiles pursuant to the order made by the Central Government for the maintenance of Cost Records under Section 209(1 )(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

ix. In respect of statutory dues:

(a) According to the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Labour Welfare Fund, Income-tax, Wealth Tax, Central Sales-tax, Value Added Tax, Custom Duty, Excise Duty, Cess and any other statutory dues as applicable with the appropriate authorities during the year. Further, there are no disputed amounts payable in respect of statutory dues.

(b) According to the information and explanations given to us, Income tax, Excise duty and Property Tax dues which have not been deposited as on March 31, 2013 on account of disputes are given below:

Name of Statute Nature of dues Amount Period to Forum Where dispute is (Rs. in lakhs) which the pending (Gross) dues relate

Income Tax Act, 1961 Income Tax dues 3.12 A.Y. 2007-08 Commissioner of Income Tax.

132.34 A.Y. 2010-11 Commissioner of Income Tax.

Central Excise Act Excise Duty 4.06 1977-2002 Asst./Dy. Commissioner of Central Excise. 2.49 Joint Commissioner of Central Excise

38.04 Commissioner (Appeals) of

Central Excise

102.10 1996-2003 CESTAT

44.93 1994-1999 Supreme Court

Maharashtra Sales Tax and Central Sales Tax Sales Tax & 86.57 2000-01 Dy. Commissioner of sales-tax Central Sales Tax 2004-05 (Appeal)-I

Maharashtra Sales Tax on the transfer of property in Work contract Tax 59.03 1990-91 to Dy. Commissioner of sales-tax goods involved in the execution of the work contract 2000-01 (Appeal)-I (Reenacted) Act, 1989

x. The Company does not have accumulated losses as at the end of the financial year and hence the question of accumulated losses being more than fifty per cent of its net worth does not arise. The Company has not incurred cash losses in the current financial year and the immediate preceding financial year.

xi. In our opinion and according to the information and explanations given to us, the Company is not indebted to any bank and hence the question of default in repayment does not arise.

xii. According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities, and hence, the question of maintenance of adequate records for this purpose does not arise.

xiii.In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4 (xiii) of the Order are not applicable to the Company.

xiv. In our opinion and according to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. The investments in shares and units of mutual funds have been held by the Company in its name.

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

xvi. To the best of our knowledge and belief and according to the explanations given to us, in our opinion, no term loans have been availed by the Company. Therefore, the provisions of clause 4 (xvi) of the Order are not applicable to the Company.

xvii. According to the information and explanations given to us, and on an overall examination of the balance sheet of the Company, it has not raised funds on short-term basis, which have been used for long-term investment.

xviii.The Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956 and hence the question as to whether the price at which shares have been issued is prejudicial to the interest of the Company does not arise.

xix. According to the information and explanation given to us, the Company has not issued any debentures during the year and hence the question of creation of security or charge in respect of debentures issued, does not arise.

xx. According to the information and explanation given to us, the Company has not raised funds by way of public issue during the year. Therefore, the provision of clause 4 (xx) of the Order is not applicable to the Company.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For M. A. Parikh & Co.

Chartered Accountants Firm Reg. No. 107556W

MUKULM. PATEL

Partner

Membership No. 32489

Place: Mumbai

Date: May 4, 2013


Mar 31, 2012

Report on the Financial statements

We have audited the accompanying financial statements of Hindoostan Mills Limited (the Company), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Proft and Loss and Cash Flow Statement for the year ended on that date, and a summary of signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Financial statements

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

auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fnancial 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 fnancial 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 suffcient and appropriate to provide a basis for our audit opinion.

opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(b) in the case of the Proft and Loss Account, of the proft for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash fows 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 sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specifed in paragraphs 4 and 5 of the Order.

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

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

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

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

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

e. On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualifed 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. Since the Central Government has not issued any notifcation as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

anneXURe to tHe aUDItoRs'' RePoRt

(Referred to in paragraph 1 of our report of even date)

i. In respect of its fxed assets:

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

(b) We are informed that the physical verifcation of fxed assets was carried out by the management at year end. According to the information and explanations given to us, discrepancies noticed on such verifcation were not material and have been dealt with appropriately in the books of accounts.

(c) There has not been any substantial disposal of fxed assets during the year and hence the question of the disposal of fxed assets affecting the going concern status of the Company does not arise.

ii. In respect of its inventories:

(a) As explained to us, inventories were physically verifed during the year by the management at reasonable intervals except cloth lying with third party processors as on 31st March, 2013 aggregating to Rs 13.33 lakhs (previous year Rs. 9.12 lakhs) for which confrmations have been obtained.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verifcation of inventories followed by the management were reasonable and adequate in relation to 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 verifcation.

iii. (a) According to information and explanations given to us, Company has granted interest free unsecured loan repayable on demand to its Subsidiary which is covered in the register maintained under section 301 of the Companies Act, 1956 amounting to Rs.622.96 lakhs. The maximum amount involved during the year and the outstanding balance of such loan as at the year end are Rs. 991.24 lakhs and Rs. 991.24 lakhs respectively.

Since the loan is interest free and repayable on demand, in our opinion:

(b) the terms and conditions of the loan are not prima facie prejudicial to the interest of the company.

(c) The question of its regular payment of principal and interest does not arise.

(d) Since the loan is repayable on demand, the question of their overdue amounts being more than Rs. 1 lakh, does not arise and hence clause 4(iii)(d) of the Order is not applicable.

(e) According to information and explanations given to us, during the year, the Company has not received unsecured loan from a party covered in the register maintained under section 301 of the Companies Act, 1956. However, the Company has received an opening balance of Rs. 90 lakhs, being interest bearing unsecured loan repayable on demand during the previous year and which is since repaid in full during the year. The Maximum amount involved during the year and outstanding balance of such loan as at the year end are Rs. 90 lakhs and Rs. Nil respectively.

(f) The rate of interest and other terms and conditions of such unsecured loans, in our opinion, are not prima facie prejudicial to the interest of the Company.

(g) Since the loans are repaid/repayable on demand, the question of its regular payment of principal and interest does not arise and hence clause 4(iii)(g) of the Order is not applicable.

iv In our opinion and according to the information and explanations given to us, there is an internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fxed assets and for the sale of goods and services. We have not noticed any major weaknesses in the internal control system during the course of audit.

v. In respect of contracts or arrangements entered in the register maintained in pursuance of section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in section 301 that needed to be entered in the register, maintained under the said section have been so entered.

(b) There is no such transaction (excluding loans reported under paragraph (iii) above), which is in excess of Rs. 5 lakhs in respect of any party.

vi. The Company has not accepted any deposits from the public and hence, the provisions of section 58A, 58AA and its rules, and also the directions of the Reserve Bank of India, or any other relevant provisions of the Act and the rules framed there under not are applicable. Hence clause 4 (vi) of the Order is not applicable.

vii. In our opinion, the internal audit function carried out during the year by a frm of Chartered Accountants appointed by the management are commensurate with the size of the Company and nature of its business.

viii. We have broadly reviewed the books of accounts and records maintained by the Company relating to the manufacture of textiles pursuant to the order made by the Central Government for the maintenance of Cost Records under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

ix. In respect of statutory dues:

According to the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Labour Welfare Fund, Income-tax, Wealth Tax, Central Sales-tax, Value Added Tax, Custom Duty, Excise Duty, Cess and any other statutory dues as applicable with the appropriate authorities during the year. Further, there are no disputed amounts payable in respect of statutory dues.

x. The Company does not have accumulated losses as at the end of the fnancial year and hence the question of accumulated losses being more than ffty per cent of its net worth does not arise. The Company has not incurred cash losses in the current fnancial year and the immediate preceding fnancial year.

xi. In our opinion and according to the information and explanations given to us, the Company is not indebted to any bank and hence the question of default in repayment does not arise.

xii. According to the information and explanations given to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities, and hence, the question of maintenance of adequate records for this purpose does not arise.

xiii. In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual beneft fund / society. Therefore, the provisions of clause 4 (xiii) of the Order are not applicable to the Company.

xiv. In our opinion and according to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. The investments in shares and units of mutual funds have been held by the Company in its name.

xv. According to information and explanations given to us, the Company has not given guarantees for loans taken by others from banks or fnancial institutions.

xvi. To the best of our knowledge and belief and according to the explanations given to us, in our opinion, no term loans have been availed by the Company. Therefore, the provisions of clause 4 (xvi) of the Order are not applicable to the Company.

xvii.According to the information and explanations given to us, and on an overall examination of the balance sheet of the Company, it has not raised funds on short-term basis, which have been used for long-term investment.

xviii.The Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956 and hence the question as to whether the price at which shares have been issued is prejudicial to the interest of the Company does not arise.

xix. According to the information and explanation given to us, the Company has not issued any debentures during the year and hence the question of creation of security or charge in respect of debentures issued, does not arise.

xx. According to the information and explanation given to us, the Company has not raised funds by way of public issue during the year. Therefore, the provision of clause 4 (xx) of the Order is not applicable to the Company.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year. For M. a. Parikh & Co.

Chartered Accountants

Firm Reg. No. 107556W

MUKUL M. PateL

Partner

Membership No. 32489

Place: Mumbai

Date : May 4, 2013


Mar 31, 2011

1. We have audited the attached consolidated balance sheet of Hindoostan Mills Ltd. (erstwhile The Sirdar Carbonic Gas Company Ltd), as at March 31,2011, and also the consolidated profit and loss account and the consolidated 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 have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and 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.

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, on the basis of such checks of the books and records of the Company as we considered appropriate and the information and explanations given to us during the course of our audit.

4. Further we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 appears from our examination of the Books of Account.

c) The Balance Sheet and the Profit & Loss Account dealt with by this report are in agreement with the Books of Account.

d) In our opinion, the Profit & Loss Account and the Balance Sheet of the Company comply with the accounting standards referred to in Section 21 l(3C)of the Companies Act, 1956.

e) On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2011 from being appointed as a Director under 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 accounts, read together with the notes, particularly note no 1 of schedule 18 thereto, in respect of amalgamation of The Hindoostan Spg. & Wvg. Mills Limited with the Company w.e.f 01-04-2010 as per the Order of Hon'ble High Court of Bombay dated 1st April, 2011, whose financial statements and information along with its subsidiary viz. Hindoostan Technical Fabrics Limited has been audited by M/s. M. A. Parikh & Co., Chartered Accountants give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view.

i) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2011

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 for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT*

(*Referred to our Report of even date on the accounts of Hindoostan Mills Ltd. for the year ended March 31, 2011)

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

(b) As explained to us, fixed assets have been physically verified by the management during the year, no material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off a substantial part of the fixed assets.

2. (a) The inventories have been physically verified by the management during the year. In our opinion, the frequency of physical verification is reasonable, except cloth lying with third party processors, for which confirmation has been obtained

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

(c) The Company has maintained proper records of inventories. Discrepancies noticed on physical verification of stocks as compared to book records have been properly dealt with in the books of account.

3. (a) According to information and explanations given to us, erstwhile The Hindoostan Spg. & Wvg. Mills Ltd. has granted interest free unsecured loan repayable on demand to its Subsidiary Company which is covered in the register maintained under section 301 of the Companies Act, 1956 amounting to Rs.239.70 lakhs. The maximum amount involved during the year and the outstanding balance of such loan as at the year ended is Rs.239.70 lakhs and Rs.222.78 lakhs respectively.

(b) The rate of interest and other terms and conditions of such unsecured loans, in our opinion, are not prima facie prejudicial to the interest of the Company.

(c) Since the loan is interest free and repayable on demand, the question of its regular payment of principal and interest does not arise.

(d) Since the loan is interest free and repayable on demand, the question of their overdue amounts being more than Rs. 1 lakh, does not arise and hence clause 4(iii)(d) of the Order is not applicable.

(e) The company has not taken any unsecured loan repayable on demand from any party covered in the register maintained under section 301 of the Act and hence, clause 4(iii)(e) of the Order is not applicable.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchases of inventory, fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in system of internal control.

5. (a) In our opinion and according to the information and explanations given to us, transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) According to the information and explanations given to us, that the transactions made with party in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956, exceeding in aggregating the value of rupees five lakhs during the year have been made at price which are reasonable having regard to prevailing market price of such goods, material and services.

6. According to the information and explanations given to us, the company has not accepted any deposit from the public as defined under the provisions of section 58A and 58AA of the Companies Act, 1956.

7. The Company's Internal audit system needs to be strengthened.

8. We have broadly reviewed the books of account 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 are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

9. (a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales- tax, Wealth-tax, Service tax, Custom Duty, Excise duty, cess and any other statutory dues have generally been deposited on time during the year with the appropriate authorities. There are no arrears of the aforesaid dues as on the date of the Balance Sheet outstanding for more than six months from the date they became payable.

(b) According to the records of the Company, and according to information and explanations given to us the dues of Income-tax/Sales- tax/Wealth- tax/Service-tax/ Custom-duty/ Excise-duty/Cess which have not been deposited on account of any disputes are as under:

Sr Name of the Statute Nature of Amount Forum where No Dues (Rs. In dispute is lakhs) pending

1. Maharashtra Sales Sales-tax 39.64 Deputy tax on the transfer on work Commissioner of property in goods contract of Sales-tax involved in the (1991-92 to (Appeal)-I execution of the work 2000-01) contract (Reenacted) Act, 1989

2. Maharashtra Sales tax Sales tax 74.97 Deputy & Central Sales tax & Central Commissioner Act. Sales tax of Sales-tax (2000-01 to (Appeal)-I 2004-05)

3 Income tax Income tax 3.12 Income tax (Asst. Yr. Appellate 2007-08) Tribunal

4. Income tax Income tax 50.34 Income tax (Asst. Yr. Appellate 1993-94) Tribunal

5. Central Excise Act Excise Duty 38.04 Asst./DC/ of (1977-02) Central Excise 2.49 JC of Central Excise

6. Central Excise Act ExciseDuty 39.11 Commissioner (2000-03) of (Appeals) , Central Excise

7 Central Excise Act ExciseDuty 71.07 CEGAT (1996-03)

8. Central Excise Act ExciseDuty 29.73 Supreme Court (1994-99)

10. The Company has no accumulated losses at the end of the current financial year The company has not incurred cash losses during the financial year and in immediately preceding financial year.

11. According to the records of the company and as per the information and explanations given to us there was no default in repayment of dues to a financial institution or bank.

12. According to the records of the company and as per die information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion the Company is not a Chit Fund Company or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

14. The company is not dealing in shares/ securities and hence provisions of clause 4(xiv) of the order is not applicable.

15. According to the records of the company, and as per the information and explanations given to us the Company has not given guarantees for loans taken by others from banks and financial Institutions.

16. According to the records of the company, and as per the information and explanations given to us, the Company has not taken the term loan and hence provision of clause 4(xvi) of the order is not applicable.

17. According to the records of the company, and as per the information and explanations given to us and on an overall examination of the balance sheet of the Company, it has not raised funds on short-term basis, which have been used for long term investments.

18. According to the records of the company, and as per the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19. According to the records of the company, and as per the information and explanations given to us the Company has no debenture outstanding as at the year- end. Therefore the question of creating a security for the same does not arise.

20. The Company has not raised any money by public issue during the year covered by our report.

21. According to the records of the company, and as per the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For H. N. Motiwalla & Co. Chartered Accountants (F. R. No. 111949W)

H. N. Motiwalla Partner (M.No. 11423)

Place: Mumbai

Date : August 10,2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of The Sirdar Carbonic Gas Company Ltd. as at March 31, 2010 and Profit & Loss Account and cash flow 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 have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and 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.

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, on the basis of such checks of the books and records of the Company as we considered appropriate and the information and explanations given to us during the course of our audit.

4. Further to our comments in Para 7 of the Annexure, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 appears from our examination of the Books of Account.

c) The Balance Sheet and the Profit & Loss Account dealt with by this report are in agreement with the Books of Account.

d) In our opinion, the Profit & Loss Account and the Balance Sheet of the Company comply with the accounting standards referred to in Section 211(3C) of the Companies Act, 1956.

e) On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2010 from being appointed as a Director under 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 accounts, read together with the notes, particularly note no. 2 of schedule 20 thereon in respect of amalgamation of six wholly owned subsidiaries and in consequence reduction of share capital give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view.

i) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 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 for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT*

(Referred to our Report of even date on the accounts of The Sirdar Carbonic Gas Company Limited for the year ended March 31, 2010)

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

(b) As explained to us, fixed assets have been physically verified by the management during the year, no material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off a substantial part of the fixed assets.

2. (a) The inventories have been physically verified by the management during the year. In our opinion, the frequency of physical verification is reasonable.

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

(c) The Company has maintained proper records of inventories. Discrepancies noticed on physical verification of stocks as compared to book records have been properly dealt with in the books of account.

3. (a) The Company has not granted loans to any party covered in the register maintained under section 301 of the Companies Act. Hence, reporting under this clause is not applicable.

(b) The company has not taken any unsecured loan from any party covered in the register maintained under section 301 of the Companies Act, 1956. Hence, reporting under this clause is not applicable.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchases of inventory, fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in system of internal control.

5. (a) In our opinion and according to the information and explanations given to us, transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) According to the information and explanations given to us, the company has transactions made with party in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding in aggregating the value of rupees five lakhs during the year have been made at price which are reasonable having regard to prevailing market price of such goods, material and services.

6. According to the information and explanation?.; given to us, the company has not accepted any deposit from the public as defined under the provisions of section S8A and 58AA of the Companies Act, 1956.

7. The Company being listed company does not have internal audit system.

8. As informed to us, the Central Government has not prescribed the maintenance of cost records under Section 209(1 )(d) of the Companies Act, 1956 in respect of the products manufactured by the Company.

9. (a) According to the records of the Company, undisp ,uted statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth-tax, Service tax, Custom Duty, Excise duty, cess and any other statutory dues have generally been deposited on time during the ye* ir with the appropriate authorities. There are no arrears of the aforesaid dues as on the date of the Balance Sheet outstanding for more than six months from the date they became payable.

(b) According to the records of the Company, and according to information and explanations given to us the dues of Income-tax/Sales- tax/Wealtl Max/Service-tax/Gustom-duty/ Excise-duty/Cess which have not been deposited on account of any disputes areas under

Sr. Name of the Statute Nature of Amount Forum where dispute is No. dues (Rupees) pending 1 Maharashtra Sal
work contract (Reenacted) Act,

1989

2 Maharashtra Sales tax & Sales tax & 74,96.577 Deputy Commissioner of Central Sales tax Act Central Sales-tax

Sate tax (Appeal)-I





10. The Company has no accumulated losses at the end of the current financial year. The company has not incurred cash losses during the financial year and in immediately preceding financial year.

11. According to the records of the company and as per the information and explanations given to us there was no default in repayment of dues to a financial institution or bank or debenture holders and other securities.

12. According to the records of the company and as per the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares debentures and other securities.

13. In our opinion the Company is not a Chit Fund Company or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

14. The company is dealing in securities and has maintained proper records of the transactions and contracts, timely entries have been made and all the securities have been held in the name of the company

15. According to the records of the company, and as per the information and explanations given to us the Company has not given guarantees for loans taken by others from banks and financial Institutions.

16. According to the records of the company, and as per the information and explanations given to us, the Company has taken the term loan and the same have been utilized for the purpose for which it was obtained.

17. According to the records of the company, and as per the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have not been used for long term investments.

18. According to the records of the company, and as per the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19. According to the records of the company, and as per the information and explanations given to us the Company has no debenture outstanding as at the year-end. Therefore the question of creating a security for the same does not arise.

20. The Company has not raised any money by public issue during the year covered by our report.

21. According to the records of the company, and as per the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For H. N. MOTIWALLA & CO.

Chartered Accountants

(F. R. No. 111949W)

H. N. MOTIWALLA

Place: Mumbai Partner

Date: 31st May, 2010 (M. No. 1 1423)



 
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