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Auditor Report of Rai Saheb Rekhchand Mohota Spg. & Wvg. Mills Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of The Rai Saheb Rekhchand Mohota Spg.& Wvg. Mills Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with 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 judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit inaccordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls 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 effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

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 of the state of affairs of the Company as at March 31, 2015, its profit, and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

2. As required by section 143 (3) of the Act, we report that:

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

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

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

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

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 31 to the financial statements;.

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

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

Annexure referred to in Clause 1 of paragraph on Report on Other Legal and Regulatory Requirements of our report of even date

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

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

(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. Inventories lying with outside parties have been confirmed by the parties as at year end.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventories and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the company in respect of these areas.

(v) The Company has not accepted any deposits from the public in accordance with the provisions of sections 73 to 76 of the Act and the rules framed there under.

(vi) 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 148(1)of the Companies Act, 2013, for the products of the company, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) (a) Undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees' state insurance, income-tax, wealth-tax, service tax, sales- tax, customs duty, excise duty, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

ix) a. According to the information and explanations given to us and on the basis of our examination of the books of accounts, the Company is regular in depositing 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 Other statutory dues with the appropriate authorities and there are no undisputed amounts payable in respect of above statutory dues outstanding as at 31.03.2015 for a period exceeding six months from the date they became payable.

b. According to the information and explanations given to us, the dues of Sales Tax, Income Tax, Wealth Tax, Service tax, Custom Duty, Excise Duty and Cess which have not been deposited on account of any dispute and forum where the dispute is pending are as under;

Name of the Statute Nature of Dues Amount rs in lacs)

Maharashtra Octroi on Grey fabrics for the Municipalities Act period 151.61 1965 May'95 to Nov'97

Maharashtra For the period 20.58 Municipalities Act Nov'97 to April-99 1965

Maharashtra For the period 14.12 Municipalities Act Dec' 94 to May' 95 1965

Maharashtra Property Tax for the 61.42 Municipalities Act Assessment period 1965 2012-13 to 2014-15



Name of the Statute Forum where dispute is pending

Maharashtra Municipalities Act 1965 Honorable High Court, Nagpur Bench.

Maharashtra Municipalities Act 1965 Honorable High Court, Nagpur Bench

Maharashtra Municipalities Act 1965 Honorable High Court, Nagpur Bench

Maharashtra Municipalities Act 1965 Supreme Court, Delhi

x) The Company does not have any accumulated losses and has not incurred cash losses during the current financial year and in the immediately preceding financial year.

xi) The Company has not defaulted in repayment of dues to Financial Institutions or Banks.

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.

For BATLIBOI & PUROHIT Chartered Accountants Firm Registration Number 101048W

K. A. Mehta Partner Place: Hinganghat Membership No. 111749 Date : 30/05/2015


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of The Rai Saheb Rekhchand Mohota Spg. & Wvg. Mills Ltd.fthe Company"), which comprise the Balance Sheet as at 31 March 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility forthe 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 Statement of Profit and Loss, of the profit forthe year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows forthe 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 in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2) As required by section 227(3) of theAct, we reportthat:

a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of ouraudit;

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

Annexure referred to in our report to the members of The Rai Saheb Rekhchand Mohota Spg. & Wvg. Mills Ltd (the Company) for the year ended 31st March, 2013

i) a. The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

b. The management has confirmed that wherever practicable, physical verification of all the major fixed assets has been carried out. No serious discrepancies have been noticed by the management on such verification.

c. No substantial part of fixed assets has been disposed off during the year, which has bearing on the Going concern status of the company.

ii) a. The inventory has been physically verified by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us the procedures of physical verification of inventory followed by the management were found reasonable and adequate in relation to the size of the company and the nature of its business.

c. The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical Verification.

iii) a. The Company has not granted any loans, secured or unsecured to companies, firms or other Parties listed in the Register maintained under Section 301 of the companies Act, 1956. Accordingly, clause 4(iii)(b) to (d) of the order are not applicable.

b. The Company has not taken any loans, secured or unsecured from companies, firms or other parties listed in the Register maintained under Section 301 of the companies Act, 1956 Accordingly, clause 4(iii)(f) to (g) of the order are not applicable.

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

v) In our opinion and according to the information and explanations given to us there are no contracts and arrangements referred to in Section 301 of the Companies Act 1956, particulars of which need to be entered into a register maintained under Section 301 of the Companies Act, 1956. Accordingly, clause 4(v)(b) of the order is not applicable.

vi) The Directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder have been complied with in respect of deposits accepted from the public. We have been informed that, no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court orTribunal in this regard.

vii) The Company has an Internal Audit System, which in our opinion is commensurate with the size and nature of the business.

viii) We are of the opinion that prima facie, the Company has made and maintained proper cost records as prescribed by Central Government under Section 209(1 )(d) of the Companies Act, 1956 forthe products of the Company, but no detailed examination of such records has been carried out by us.

ix) a. According to the information and explanations given to us and on the basis of our examination of the books of accounts, the Company is regular in depositing 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 Other statutory dues with the appropriate authorities and there are no undisputed amounts payable in respect of above statutory dues outstanding as at 31.03.2013 for a period exceeding six months from the date they became payable.

x) The Company does not have any accumulated losses and has not incurred cash losses during the current financial year and in the immediately preceding financial year.

xi) The Company has not defaulted in repayment of dues to Financial Institutions or Banks.

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.

xiii) The Company is not a chit fund or Nidhi/mutual benefit fund/society.

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

xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from Banks and Financial Institutions.

xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose forwhich the loans were obtained.

xvii) On the basis of examination of the Cash Flow Statement, the funds raised on short term basis have not been used for long term investment.

xviii) During the year under Audit, the Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix) The company has neither issued any debentures during the year nor there is any outstanding debentures as on 31.03.2013 and hence provisions of clause 4(xix) of the order are not applicable to the company.

xx) The Company has not raised any money by way of the Public Issue during the year.

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

FOR BATLIBOI & PUROHIT

Chartered Accountants

Firm Registration Number 101048W

K. A. Mehta

Place : Mumbai Partner

Dated: 30/05/2013 Membership No. 111749


Mar 31, 2012

We have audited the attached Balance Sheet of The Rai Saheb Rekhchand Mohota Spg. & Wvg. Mills Ltd. Mumbai as at 31st March, 2012 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date and annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our Audit.

We 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 management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditor's Report) Order, 2003 (as amended by the Amendment Order 2004) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we enclose, an annexure hereto a statement on the matters referred to in para 4 and 5 of the said order.

2. Further and subject to our comments in the annexure referred to in paragraph 1 above we report that:

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

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

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

d) In our opinion, the Balance Sheet, Profit & Loss Account and the Cash Flow Statement dealt by this report comply with the Accounting Standards referred to in sub-section (3C) of Sec. 211 of the Companies Act, 1956 except for provision of Leave with pay (refer note No. 4 of schedule 'Q') in accordance with revised accounting standard 15 for employee benefits.

e) On the basis of written representations received from the Directors as on 31s1 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.

f) In our opinion and to the best of our information and according to the explanations given to us, and subject to (d) above, and non-transfer of leased assets to company (refer note No. 7 of schedule 'Q') the accounts read with other notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

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

ii) In the case of the Profit & Loss Account of the Loss forthe year ended on that date and

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

ANNEXURE TO THE AUDITORS' REPORT ON THE ACCOUNTS FOR THE YEAR ENDED 31 ST MARCH, 2012 OF THE RAI SAHEB REKHCHAND MOHOTA SPG.& WVG. MILLS LTD.

(Referred to in Paragraph 1 thereof.)

i) a. The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

b. The management has confirmed that wherever practicable, physical verification of all the major fixed assets has been carried out. No serious discrepancies have been noticed by the management on such verification.

c. No substantial part of fixed assets has been disposed off during the year, which has bearing on the going concern status of the company

ii) a. The inventory has been physically verified by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us the procedures of physical verification of inventory followed by the management were found reasonable and adequate in relation to the size of the company and the nature of its business.

c. The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verification.

iii) a. The Company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the Register maintained under Section 301 of the companies Act, 1956. Accordingly, clause 4(iii)(b) to (d) of the order are not applicable.

b. The Company has not taken any loans, secured or unsecured from companies, firms or other parties listed in the Register maintained under Section 301 of the companies Act, 1956. Accordingly, clause 4(iii)(f) to (g) of the order are not applicable.

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

v) In our opinion and according to the information and explanations given to us there are no contracts and arrangements referred to in Section 301 of the Companies Act 1956, particulars of which need to be entered into a register maintained under Section 301 of the Companies Act, 1956. Accordingly, clause 4(v)(b) of the order is not applicable.

vi) The Directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder have been complied with in respect of deposits accepted from the public. We have been informed that, no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or Tribunal in this regard.

vii) The Company has an Internal Audit System, which in our opinion is commensurate with the size and nature of the business.

viii) The Company has made and maintained proper cost records as prescribed by Central Government under Section 209(1 )(d) of the Companies Act, 1956 for the products of the Company, but no detailed examination of such records has been carried out by us.

ix) a. According to the information and explanations given to us and on the basis of our examination of the books of accounts, the Company is regular in depositing 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 Other statutory dues with the appropriate authorities and there are no undisputed amounts payable in respect of above statutory dues outstanding as at 31.03.2012 for a period exceeding six months from the date they became payable.

b. According to the information and explanations given to us, the dues of Sales Tax, Income Tax, Wealth Tax, Service tax, Custom Duty, Excise Duty and Cess which have not been deposited on account of any dispute and forum where the dispute is pending are as under;

Name of the Statute Nature of Dues Amount Forum where dispute (Rs.in lacs) is pending

Central Excise Act, 1944 Excise Duty on disallowance 321.13 Commissioner of Central of deemed Credit availed Excise, Nagpur

Central Excise Act, 1944 Excise Duty on disallowance 40.92 - do - of utilization of deemed credit towards payment of AED (ST)

x) The Company does not have any accumulated losses and has not incurred cash losses during the current financial year and in the immediately preceding financial year.

xi) The Company has not defaulted in repayment of dues to Financial Institutions or Banks.

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.

xiii) The Company is not a chit fund or Nidhi/mutual benefit fund/society.

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

xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from Banks and Financial Institutions.

xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

xvii) On the basis of examination of the Cash Flow Statement, the funds raised on short term basis have not been used for long term investment.

xviii) During the year under Audit, the Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix) The company has neither issued any debentures during the year nor there is any outstanding debentures as on 31.03.2012 and hence provisions of clause 4(xix) of the order are not applicable to the company.

xx) The Company has not raised any money byway of the Public Issue during the year.

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

FOR BATLIBOI & PUROHIT

Chartered Accountants

Firm Registration Number 101048W

K. A. Mehta

Place : Hinganghat Partner

Dated: 30/05/2012 Membership No. 111749


Mar 31, 2011

We have audited the attached Balance Sheet of The Rai Saheb Rekhchand Mohota Spg. & Wvg. Mills Ltd. Mumbai as at 31st March, 2011 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date and annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our Audit.

We 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 management, as well as evaluating the overall financial statements presentation. We believe that ouraudit provides a reasonable basis for ouropinion.

1. As required by the Companies (Auditor's Report) Order, 2003 (as amended by the Amendment Order 2004) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we enclose, an annexure hereto a statement on the matters referred to in para 4 and 5 of the said order.

2. Further and subject to our comments in the annexure referred to in paragraph 1 above we report that:

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

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

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

d) In our opinion, the Balance Sheet, Profit & Loss Account and the Cash Flow Statement dealt by this report comply with the Accounting Standards referred to in sub-section (3C) of Sec. 211 of the Companies Act, 1956 except for provision of Leave with pay (refer note No. 4 of schedule 'Q') in accordance with revised accounting standard-15 for employee benefits.

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

f) In our opinion and to the best of our information and according to the explanations given to us, and subject to (d) above, and non-transfer of leased assets to company (refer note No. 7 of schedule 'Q') the accounts read with other notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

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

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

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

ANNEXURE TO THEAUDITORS' REPORT ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2011 OF THE RAISAHEB REKHCHAND MOHOTASPG.& WVG. MILLS LTD. (Referred to in Paragraph 1 thereof.)

i) a. The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

b. The management has confirmed that wherever practicable, physical verification of all the major fixed assets has been carried out. No serious discrepancies have been noticed by the management on such verification.

c. No substantial part of fixed assets has been disposed off during the year, which has bearing on the going concern status of the company.

ii) a. The inventory has been physically verified by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us the procedures of physical verification of inventory followed by the management were found reasonable and adequate in relation to the size of the company and the nature of its business.

c. The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verification.

iii) a. The Company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the Register maintained under Section 301 of the companies Act, 1956. Accordingly, clause 4(iii)(b) to (d) of the order are not applicable.

b. The Company has not taken any loans, secured or unsecured from companies, firms or other parties listed in the Register maintained under Section 301 of the companies Act, 1956. Accordingly, clause 4(iii)(f) to (g) of the order are not applicable.

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

v) In our opinion and according to the information and explanations given to us there are no contracts and arrangements referred to in Section 301 of the Companies Act 1956, particulars of which need to be entered into a register maintained under Section 301 of the Companies Act, 1956. Accordingly, clause 4(v)(b) of the order is not applicable.

vi) The Directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder have been complied with in respect of deposits accepted from the public. We have been informed that, no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or Tribunal in this regard.

vii) The Company has an Internal Audit System, which in our opinion is commensurate with the size and nature of the business.

viii) The Company has made and maintained proper cost records as prescribed by Central Government under Section 209(1 )(d) of the Companies Act, 1956 for the products of the Company, but no detailed examination of such records has been carried out by us.

ix) a. According to the information and explanations given to us and on the basis of our examination of the books of accounts, the Company is regular in depositing 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 Other statutory dues with the appropriate authorities and there are no undisputed amounts payable in respect of above statutory dues outstanding as at 31.03.2011 for a period exceeding six months from the date they became payable.

b. According to the information and explanations given to us, the dues of Sales Tax, Income Tax, Wealth Tax, Service tax, Custom Duty, Excise Duty and Cess which have not been deposited on account of any dispute and forum where the dispute is pending are as under;

Name of the Statute Nature of Dues Amount Forum where dispute (Rs.in is pending lacs)

Central Excise Excise Duty on 321.13 Commissioner of Act, 1944 disallowance Central Excise, of deemed Credit Nagpur availed

Central Excise Excise Duty on 40.92 -do- Act, 1944 disallowance of utilization of deemed credit towards payment of AED (ST)

x) The Company does not have any accumulated losses and has not incurred cash losses during the current financial year and in the immediately preceding financial year.

xi) The Company has not defaulted in repayment of dues to Financial Institutions or Banks.

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.

xiii) The Company is not a chit fund or Nidhi/mutual benefit fund/society.

xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures or other investments. Accordingly, the provisions of clause 4

(xiv) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from Banks and Financial Institutions.

xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

xvii) On the basis of examination of the Cash Flow Statement, the funds raised on short term basis have not been used for long term investment.

xviii) During the year under Audit, the Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix) The company has neither issued any debentures during the year nor there is any outstanding debentures as on 31.03.2011 and hence provisions of clause 4

(xix) of the order are not applicable to the company.

xx) The Company has not raised any money byway of the Public Issue during the year.

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

FOR BATLIBOI & PUROHIT Chartered Accountants Firm Registration Number 101048W

K. A. Mehta Partner Membership No. 111749

Place : Hinganghat Dated : 30/05/2011


Mar 31, 2010

We have audited the attached Balance Sheet of The Rai Saheb Rekhchand Mohota Spg. & Wvg. Mills Ltd. Mumbai as at 31st March, 2010 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date and annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our Audit.

We 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 management, as well as evaluating the overall financial statements presentation. We believe that ouraudit provides a reasonable basis for ouropinion.

1. As required by the Companies (Auditors Report) Order, 2003 (as amended by the Amendment Order 2004) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we enclose, an annexure hereto a statement on the matters referred to in para 4 and 5 of the said order.

2. Further and subject to our comments in the annexure referred to in paragraph 1 above we report that:

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

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

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

d) In our opinion, the Balance Sheet, Profit & Loss Account and the Cash Flow Statement dealt by this report comply with the Accounting Standards referred to in sub-section (3C) of Sec. 211 of the Companies Act, 1956 except for provision of Leave with pay (refer note No. 4 of schedule "Q") in accordance with revised accounting standard 15 for employee benefits.

e) 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 31s 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.

f) In our opinion and to the best of our information and according to the explanations given to us, and subject to (d) above, and non-transfer of leased assets to company (refer note No. 7 of schedule "Q") the accounts read with other notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

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 Profits Loss Account of the Loss forthe year ended on that date and

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

ANNEXURE TO THE AUDITORS REPORT ON THE ACCOUNTS FOR THE YEAR ENDED 31 ST MARCH, 2010 OF THE RAISAHEB REKHCHAND MOHOTASPG.& WVG. MILLS LTD. (Referred to in Paragraph 1 thereof.)

i) a. The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

b. The management has confirmed that wherever practicable, physical verification of all the major fixed assets has been carried out. No serious discrepancies have been noticed by the management on such verification.

c. No substantial part of fixed assets has been disposed off during the year, which has bearing on the going concern status of the company.

ii) a. The inventory has been physically verified by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us the procedures of physical verification of inventory followed by the management were found reasonable and adequate in relation to the size of the company and the nature of its business.

c. The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verification.

iii) a. The Company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the Register maintained under Section 301 of the companies Act, 1956. Accordingly, clause 4(iii)(b) to (d) of the order are not applicable.

b. The Company has not taken any loans, secured or unsecured from companies, firms or other parties listed in the Register maintained under Section 301 of the companies Act, 1956. Accordingly, clause 4(iii)(f) to (g) of the order are not applicable.

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

v) In our opinion and according to the information and explanations given to us there are no contracts and arrangements referred to in Section 301 of the Companies Act 1956, particulars of which need to be entered into a register maintained under Section 301 of the Companies Act, 1956. Accordingly, clause 4(v)(b) of the order is not applicable.

vi) The Directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder have been complied with in respect of deposits accepted from the public. We have been informed that, no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or Tribunal in this regard.

vii) The Company has an Internal Audit System, which in our opinion is commensurate with the size and nature of the business.

viii) The Company has made and maintained proper cost records as prescribed by Central Government under Section 209(1 )(d) of the Companies Act, 1956 for the products of the Company, but no detailed examination of such records has been carried out by us.

ix) a. According to the information and explanations given to us and on the basis of our examination of the books of accounts, the Company is regular in depositing 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 Other statutory dues with the appropriate authorities and there are no undisputed amounts payable in respect of above statutory dues outstanding as at 31.03.2010 for a period exceeding six months from the date they became payable.

b. According to the information and explanations given to us, the dues of Sales Tax, Income Tax, Wealth Tax, Service tax, Custom Duty, Excise Duty and Cess which have not been deposited on account of any dispute and forum where the dispute is pending are as under;

Name of the Statute Nature of Dues Amount Forum where dispute (Rs.in lacs) is pending

Central Excise Excise Duty on disallo wance 321.13 Commissioner of Act, 1944 of deemed Credit availed Central Excise, Nagpur

Central Excise Excise Duty on disallo wance Act, 1944 of utilization of deemed credit 40.92 - do - towards payment of AED (ST)



x) The Company does not have any accumulated losses and has not incurred cash losses during the current financial year and in the immediately preceding financial year.

xi) The Company has not defaulted in repayment of dues to Financial Institutions or Banks.

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.

xiii) The Company is not a chitfund or Nidhi/mutual benefit fund/society.

xiv) The Company is not in the business of dealing or trading in Shares. The Company has maintained proper records of transactions and contracts in respect of Shares, Securities, Debentures and other Investments and timely entries have been made therein. The Shares, Securities, Debentures and Other Investments have been held by the company, in its own name.

xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from Banks and Financial Institutions.

xvi) Based on information and explanations given to us by the management, term loans were applied forthe purpose for which the loans were obtained.

xvii) On the basis of examination of the Cash Flow Statement, the funds raised on short term basis have not been used for long term investment.

xviii) During the year under Audit, the Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix) The company has neither issued any debentures during the year nor there is any outstanding debentures as on 31.03.2010 and hence provisions of clause 4(xix) of the order are not applicable to the company.

xx) The Company has not raised any money byway of the Public Issue during the year.

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



FOR BATLIBOI & PUROHIT

Chartered Accountants

Firm Registration Number 101048W

K. A. Mehta

Place : Hinganghat Partner

Dated: 29/05/2010 Membership No. 111749




Mar 31, 2004

We have audited the attached Balance Sheet of The Rai Saheb Rekhchand Mohota Spg. & Wvg. Milk Ltd, Mumbai as at 31st March, 2004 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibiliy is to express an opinion on these financial statements based on our Audit.

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 management, as well as evaluating the overall financial statements presentation. We belive that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in an annexure hereto a statement on the matters referred to in paras 4 and 5 of the said order.

2. Further and subject to our comments in the annexure referred to in paragraph 1 above we report that:

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

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

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

d. In our opinion, the Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt by this report comply with the Accounting Standards referred to in sub-section (3C) of Sec. 211 of the Companies Act, 1956 except for non-inclusion of excise duty on finished goods lying in bonded warehouse. (refer note no. 4 of schedule "0") and non provision of Leave with pay (refer note no. 5 of schedule O)

e. On the basis of written representations received from the Directors as on 31st March, 2004 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2004 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, and subject to (d) above, and non-transfer of leased assets to company (refer note no. 7 of Schedule "O") the accounts read with other notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

i) In the case of the Balance Sheet of the State of affairs of the Company as at 31st March, 2004,

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

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

ANNEXURB TO THE AUDITORS REPORT ON THE ACCOUNTS FOR THE YEAR ENDED 31 ST MARCH 2004 OF THE RAISAHEB REKHCHAND MOHOTA SPG. & WVG. MILLS LIMITED (Referred to in paragraph 1 thereof)

i) a. The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

b. The management has confirmed that wherever practicable, physical verification of all the major fixed assets has been carried out. No serious discrepancies have been noticed by the management on such verification.

c. No substantial part of fixed assets has been disposed off during the year, which has bearing on the going concern assumption.

ii) a.The inventory has been physically verified by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us the procedures of physical verification of inventory followed by the management were found reasonable and adequate in relation to the size of the Company and the nature of its business.

c. The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verification.

iii) The Company has neither granted nor taken any loans, secured or unsecured to and from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. Accordingly, clause 4(iii)(b) to (d) of the order are not applicable.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedure commensurate with the size of the company and the nature of its business with regard to purchase 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 internal control.

v) In our opinion and according to the information and explanations given to us, there are no transactions that need to be entered into a register maintaied under Section 301 of the Companies Act, 1956. Accordingly, clause 4(v)(b) of the order is not applicable.

vi) The Directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA of the Companies Act 1956 and the rules framed thereunder have been complied with in respect of deposits accepted from the public. We have been informed that, no order has been passed by Company Law Board in this regard.

vii) The Company has an Internal Audit System, which in our opinion is commensurate with the size and nature of the business.

viii) The Company has made and maintained proper cost records as prescribed by Central Government under Section 209 (1)(d) of the Companies Act, 1956 for the products of the Company, but no detailed examination of such records has been carried out by us.

ix) a. According to the information and explanations given to us and on the basis of our examination of the books of accounts, the Company is regular in depositing undisputed statutory dues inculding Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and Other statutory dues with tha appropriate authorities and there are no undisputed amounts payable in respect of above statutory dues outstanding as at 31.03.2004 for a period exceeding six months from the date they became payable.

b. According to the information and explanations given to us, the dues of Sales Tax, Income Tax, Wealth Tax, Custom Duty, Excise Duty and Cess which have not been deposited on account of any dispute and forum where the dispute is pending are as under ;

Name of the Statute Nature of Dues Amount Forum where dispute is pending (Rs. in lacs)

M.S.T. Act, 1959 Sales Tax on disallowance of Sales Tax deferment 23.73 Sales Tax Appellate Tribunal - do - 432.97 Dy. Commissioner of Sales Tax (Appeals)

C.S.T. Act, 1956 Sales Tax on disallowance of Sales Tax deferment 0.89 Sales Tax Appellate Tribunal

-do- 51.77 Dy. Commissioner of Sales Tax (Appeals)

Income Tax Act, 1961 Income Tax on disallowance of Profit on Share & 3.64 ITAT, Mumbai Deduction u/s 80 HHC

Central Excise Act, 1944 Excise Duty on disallowance of deemed Credit availed 11.65 CEGAT

-do- 321.13 Commissioner of Central Excise, Nagpur

Demand of Excise Duty on Grey Fabrics captively 225.51 CEGAT consumed

Demand of AED (TTA) on Yarn captively consumed 47.56 Commissioner of Central Excise, Nagpur

Excise Duty on disallowance of utilisation of 40.92 - do - deemed credit towards payment of AED (ST)

x) The Company does not have any accumulated losses and has not incurred cash losses during the current financial year and in the immediately preceeding financial year.

xi) The Company has not defaulted in repayment of dues to Financial Institutions or Banks or Debenture holders.

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.

xiii) The Company is not a chit fund or nidhi/mutual benefit fund/society.

xiv) The Company is not in the business of dealing or trading in Shares. The Comany has maintained proper records of transactions and contracts in respect of Shares, Securities, Debentures and other Investments and timely entries have been made therein. The Shares, Securities, Debentures and other Investments have been held by the company, in its own name.

xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from Banks and Financial Institutions.

xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

xvii) On the basis of examination of the Cash Flow Statement, the funds raised on short term basis have not been used for long term investment and vice-versa.

xviii) During the year under Audit, the Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

xix) The company has neither issued any debentures during the year nor there is any outstanding debentures as on 31.03.2004 and hence provisions of clause 4(xix) of the order are not applicable to the company.

xx) The Company has not raised any money by way of the Public Issue during the year.

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

xxii) In respect of service activity of the company i. e. processing work carried out on behalf of outside parties, we are informed that such processing jobs having been carried out together with over all process of manufacture of Companys products and it being not practicable to have specific authorization and allocation of stores and man hours for relative jobs, the Company does not have such system in force. However, in our opinion and according to the information and explanations given to us, there is reasonable system of internal control in this regard.-

For BATLIBOI & PUROHIT Chartered Accountants,

(K.K.KSHIRSAGAR) (PARTNER) Membership No. 004047

Place : HINGANGHAT Dated : 30.06.2004


Mar 31, 2003

We have audited the attached Balance Sheet of The Rai Saheb Rekhchand Mohota Spg. & Wvg. Mills Ltd., Mumbai as at 31 st March, 2003 and the Profit and Loss Account for the year ended on that date annexed thereto and Cash Flow Statement for the period ended on that date. These financial statements are the responsibility of the Companys management. Our responsibiliy is to express an opinion on these financial statements based on our Audit.

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

1. As required by the Manufacturing and other companies (Auditors Report) Order, 1988 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in an annexure hereto a statement on the matters referred to in para 4 and 5 of the said order.

2. Further and subject to our comments in the annexure referred to in paragraph 1 above we report that;

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

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

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

d. On the basis of written representations received from the Directors as on 31 st March, 2003 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31 st March, 2003 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

e. In our opinion, the Profit and Loss Account and the Balance Sheet comply with the Accounting Standards referred to in sub-section (3C) of Sec. 211 of the Companies Act, 1956 except for non-inclusion of excise duty on finished goods lying in bonded warehouse, (refer note no. 4 of schedule "O"), non-payment of Gratuity Premium to Group Gratuity Scheme (refer note No. 5 of Schedule "O") and non provision of Leave with pay (refer note no. 6 of scheduleO).

f. In our opinion and to the best of our information and according to the explanations given to us, and subject to (e) above, and non-transfer of leased assets to company (refer note no. 8 of Schedule "O") the accounts read with other notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

i) In the case of the Balance Sheet of the State of affairs of the Company as at 31 st March, 2003,

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

iii) In the case of the Cash Flow Statement of the Cash Flow for the period ended on that date.

ANNEXURE TO THE AUDITORS REPORT ON THE ACCOUNTS FOR THE YEAR ENDED 31 ST MARCH 2003 OF THE RAISAHEB REKHCHAND MOHOTA SPG. & WVG. MILLS LIMITED (Referred to in paragraph 1 thereof)

1) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The management has confirmed that wherever practicable, physical verification of all the major fixed assets has been carried out. No serious discrepancies have been noticed by the management on such verification.

2) None of the fixed assets have been revalued during the year.

3) The stock of finished goods, stores, spare parts and raw materials have been physically verified by the management.

4) In our opinion and according to the information and explanations given to us the procedures of physical verification of stock followed by the management were found reasonable and adequate in relation to the size of the Company and the nature of its business.

5) The discrepancies noticed on verification between the physical stock and book records have been properly dealt with and were not material in relation to the operation of the company.

6) On the basis of our examination of stock records, we are of the opinion that the valuation of stocks is fair and proper and is in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year.

7) In our opinion, the Company has not taken any loans from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, where the rate of interest or the terms & conditions are prima-facie prejudicial to the interests of the company. In view of the provisions of section 370 of the companies Act, 1956 are not being applicable vide the companies (Amendment) Act, 1999, loans from companies under the same management, if any have not been commented upon.

8) The company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956, where the rate of interest and other terms & conditions of such loans are prima-facie prejudicial to the interest of the company. In view of the provisions of section 370 of the companies Act, 1956 not being applicable vide the companies (Amendment) Act, 1999, loans to companies under the same management, if any, have not been commented upon.

9) Interest free loan or advances in the nature of loans have been given to staff. The principal amounts are repaid as stipulated.

10) The company has granted loans to other parties, which are overdue including interest. Steps are being taken to recover the same (refer note -13 ScheduleO)

11) In our opinion, the internal control procedures for purchase of stores, raw materials including components, plant and machinery, equipment and other assets and for the sale of goods are commensurate with the size of the company and nature of its business.

12) In our opinion and according to the information and explanations given to us, the transaction of purchase of goods and material and sales of . goods, materials and services made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of Companies Act, 1956 and agreegating during the year to Rs. 50,000/- or more in respect of each party have been made at prices which are reasonable having regard to prevailing market prices for such goods, materials or services or the prices at which transactions for similar goods, materials or services have been made with other parties.

13) As explained to us, no unserviceable or damaged stores, raw materials and finished goods have been found by the company during the course of physical verification.

14) In our opinion the company has complied with the directives issued by Reserve Bank of India and provisions of section 58 A of the Companies Act, 1956 and the Rules framed thereunder with regard to the deposits accepted by it.

15) Reasonable records have been maintained by Company for the sales and disposal of realisable by-products and scrap.

16) The Company has an internal audit system commensurate with the size and nature of its business.

17) We have broadly reviewed the books of account maintained by the Company pursuant to the order made by Central Government for maintenance of cost records prescribed 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. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

18) The company has regularly deposited during the year provident fund and employees state insurance dues with the appropriate authorities.

19) There were no amounts outstanding on 31st March, 2003 in respect of undisputed Income Tax, Wealth Tax, Sales Tax, Custom Duty & Excise Duty, which were due for more than six months from the date they became payable.

20) According to the information and explanation given to us and the records examined by us, no personal expenses have been charged to revenue account other than those payable under contractual obligation or in accordance with generally accepted business practice.

21) The company is not a sick industrial company within the meaning of section 3 (1) (0) of the Sick Industrial Companies (Special Provisions) Act, 1985.

22) In respect of service activity of the company i. e. processing work carried out on behalf of outside parties, we are informed that such processing jobs having been carried out together with over all process of manufacture of Companys products and it being not practicable to have specific authorization and allocation of stores and man hours for relative jobs, the Company does not have such system in force. However, in our opinion and according to the information and explanations given to us, there is reasonable system of internal control in this regard.

For BATLIBOl & PUROHIT Chartered Accountants,

(K.K.KSHIRSAGAR) (PARTNER)

Place : HINGANGHAT Dated : 28th JUNE 2003.


Mar 31, 2002

We have audited the attached Balance Sheet of The Rai Saheb Rekhchand Mohota Spg. & Wvg. Mills Ltd., Mumbai as at 31 st March, 2002 and also the Profit and Loss Account for the year ended on the date and annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibiliy is to express an opinion on these financial statements based on our Audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards required 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, as well as evaluating the overall financial statements presentation. We belive that our audit provides a reasonable basis for our opinion.

1. As required by the Manufacturing and other companies (Auditors Report) Order, 1988 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in an annexure hereto a statement on the matters referred to in para 4 and 5 of the said order.

2. Further and subject to our comments in the annexure referred to in paragraph 1 above we report that ;

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

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

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

d. On the basis of written representations received from the Directors as on 31 st March, 2002 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31 st March, 2002 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

e. In our opinion, the Profit and Loss Account and the Balance Sheet comply with the Accounting Standards referred to in sub-section (3C) of Sec. 211 of the Companies Act, 1956 except for non-inclusion of excise duty on finished goods lying in bonded warehouse, (refer note no. 5 of schedule "O"), non-payment of Gratuity Premium to Group Gratuity Scheme (refer note Ho. 6 of Schedule "O") and non provision of diminution in the value of investment (refer note no. 7 of schedule 0).

f. In our opinion and to the best of our information and according to the explanations given to us, and subject to (e) above, lower provision for depreciation amounting to Rs. 103.46 lacs (refer note no. 4(a) of schedule "0"), and non-transfer of leased assets to company (refer note no. 9 of Schedule "0") the accounts read with other notes thereon given 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 31 st March, 2002, and

ii) In the case of the Profit & Loss Account of the Profit for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2002 OF THE RAISAHEB REKHCHAND MOHOTA SPG. & WVG. MILLS LIMITED (Referred to in paragraph 1 thereof)

1) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The management has confirmed that wherever practicable, physical verification of all the major fixed assets has been carried out. No serious discrepancies have been noticed by the management on such verification.

2) None of the fixed assets have been revalued during the year.

3) The stock of finished goods, stores, spare parts and raw materials have been physically verified by the management.

4) In our opinion and according to the information and explanations given to us the procedures of physical verification of stock followed by the management were found reasonable and adequate in relation to the size of the Company and the nature of its business.

5) The discrepancies noticed on verification between the physical stock and book records which have been properly dealt with and were not material in relation to the operation of the company.

6) On the basis of our examination of stock records, we are of the opinion that the valuation of stocks is fair and proper and is in accordance with the normally accepted accounting principles and is on the same basis as in the preceeding year.

7) In our opinion, the Company has not taken any loans from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, where the rate of interest or the terms & conditions are prima-facie prejudicial to the interests of the company. In view of the provisions of section 370 of the companies Act, 1956 are not being applicable vide the companies (Amendment) Act, 1999 loans from companies under the same management, if any have not been commented upon.

8) The company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956, where the rate of interest and other terms & conditions of such loans are prima-facie prejudicial to the interest of the company. In view of the provisions of section 370 of the companies Act, 1956 not being applicable vide the companies (Amendment) Act, 1999 loans from companies under the same management, if any, have not been commented upon.

9) Interest free loan or advances in the nature of loans have been given to staff. The principal amounts are repaid as stipulated.

10) The company has granted loans to other parties, which are overdue including interest. Steps are being taken to recover the same (refer note -14 Schedule O)

11) In our opinion, the internal control procedures for purchase of stores, raw materials including components, plant and machinery, equipment and other assets and for the sale of goods are commensurate with the size of the company and nature of its business.

12) In our opinion and according to the information and explanations given to us, the transaction of purchase of goods and material and sales of goods, materials and services made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of Companies Act, 1956

and agreegating during the year to Rs. 50,000/- or more in respect of each party have been made at prices which are reasonable having regard to prevailing market prices for such goods, materials or services or the prices at which transactions for similar goods, materials or services have been made with other parties.

13) As explained to us, no unserviceable or damaged stores, raw materials and finished goods have been found by the company during the course of physical verification.

14) In our opinion the company has complied with the directives issued by Reserve Bank of India and provisions of section 58 A of the Companies Act, 1956 and the Rules framed thereunder with regard to the deposits accepted by it.

15) Reasonable records have been maintained by Company for the sales and disposal of realisable by-products and scrap.

16) The Company has no internal audit system commensurate with the size and nature of its business.

17) We have broadly reviewed the books of account maintained by the Company pursuant to the order made by Central Government for maintenance of cost records prescribed 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. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

18) The company has regularly deposited during the year provident fund and employees state insurance dues with the appropriate authorities.

19) There were no amounts outstanding on 31st March, 2002 in respect of undisputed Income Tax, Wealth Tax, Sales Tax, Custom Duty & Excise Duty, which were due for more than six months from the date they became payable.

20) According to the information and explanation given to us and the records examined by us, no personal expenses have been charged to revenue account other than those payable under contractual obligation or in accordance with generally accepted business practice.

21) The company is not a sick industrial company within the meaning of section 3 (1) (0) of the Sick Industrial Companies (Special Provisions) Act, 1985.

22) In respect of service activity of the company i. e. processing work carried out on behalf of outside parties, we are informed that such processing jobs having been carried out together with over all process of manufacture of Companys products and it being not practicable to have specific authoriza- tion and allocation of stores and man hours for relative jobs, the Company does not have such system in force. However, in our opinion and according to the information and explanations given to us, there is reasonable system of internal control in this regard.

For BATLIBOI & PUROHIT

Chartered Accountants,

(K. K. KSHIRSAGAR)

(PARTNER)

Place : Mumbai Dated : 28th JUNE 2002.


Mar 31, 2000

We have audited the attached Balance Sheet of The Rai Saheb Rekhchand Mohota Spg. & Wvg. Mills Ltd., Mumbai as at 31 st March 2000 and also the annexed Profit and Loss Account of the Company for the year ended on that date and report that:

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

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

3. The Balance Sheet and Profit & Loss Account dealt with by the report are in agreement with Books of Accounts.

4. In our opinion, the Profit and Loss Account and the Balance Sheet comply with the Accounting Standards referred to in sub-section (3C) of Sec. 211 of the Companies Act, 1956 except for non-inclusion of excise duty on finished goods lying in bonded warehouse. (refer note no. 4 of schedule "0")

5. In our opinion and to the best of our information and according to the explanations given to us, and subject to lower provision of depreciation amounting to Rs. 41.67 lacs (refer note no. 5 of schedule "0"), the accounts read with notes thereon 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 31 st March, 2000.

ii) In the case of the Profit & Loss Account, of the Profit of the company for the year ended on that date.

6. As required by the Manufacturing & other Companies (Auditors Report) Order, 1988 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956 and on the basis of such checks of books and records of the Company as we considered appropriate and according to the information and explanations given to us during the course of audit, we further state that:

i) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The management has confirmed that wherever practicable, physical verification of all the major fixed assets has been carried out. No serious discrepancies have been noticed by the management on such verification.

ii) None of the fixed assets have been revalued during the year.

iii) The stock of finished goods, stores, spare parts and raw materials have been physically verified by the management.

iv) In our opinion, the procedure of physical verification of stock followed by the management is reasonable and adequate in relation to the size of the Company and nature of its business.

v) The discrepancies noticed on verification between the physical stock and book records have been properly dealt with and were not material in relation to the operation of the company.

vi) On the basis of our examination of stock records, we are of the opinion that the valuation of stocks is fair and proper and is in accordance with the normally accepted accounting principles and is on the same basis as in the preceding years except valuation of finished goods stock lying in bonded warehouse at cost as required by Accounting Standard (AS-2) instead of lower of net realisable value/market rate hitherto followed (refer note Mo. 6).

vii) The Company has taken unsecured loans, from companies, firms and other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and from companies as defined under section 1 (B) of section 370 of the companies Act, 1956. In terms of sub-section (6) of section 370 of the companies Act, 1956, provosions of the section are not applicable to the company on or after 31 st October 1998. In our opinion,the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the company.

viii) The company has granted loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 and / or to Companies under the same management as defined under Section 370 (1B) of the Companies Act, 1956. In terms of sub-section (6) of section 370 of the Companies Act, 1956, provisions of the section are not applicable to a company on or after 31 st October 1998. In our opinion, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the company.

ix) Interest free loans or advances in the nature of loans have been given to staff. The principal amounts are repaid as stipulated.

x) The company has granted loans to other parties, which are overdue including interest. Steps are being taken to recover the same.

xi) In our opinion, the internal control procedures for purchase of stores, raw materials including components, plant and machinery, equipment and other assets and for the sale of goods are commensurate with the size of the company and nature of its business.

xii) In our opinion and according to the information and explainations given to us, the transaction of purchase of goods and material and sale of goods, material and services made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of Companies Act, 1956 and agreegating during the year to Rs. 50,000/- or more in respect of each party have been made at prices which are reasonable having regard to prevailing market prices for such goods, materials or services or the prices at which transactions for similar goods, materials or services have been made with other parties.

xiii) As explained to us, no unserviceable or damaged stores, raw materials and finished goods have been found by the company during the course of physical verification.

xiv) In our opinion the company has complied with the directives issued by Reserve Bank of India and provisions of section 58 A of the Companies Act, 1956 and the Rules framed thereunder with regard to the deposits accepted by it.

xv) Reasonable records have been maintained by Company for the sale and disposal of realisable by-products and scrap.

xvi) The Company has no internal audit system commensurate with the size and nature of its business.

xvii) We have broadly reviewed the books of account maintained by the Company pursuant to the order made by Central Government for maintenance of cost records prescribed 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. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

xviii) The company has regularly deposited during the year provident fund and employees state insurance dues with the appropriate authorities.

xix) There were no amounts outstanding on 31 st March, 2000 in respect of undisputed Income Tax, Wealth Tax, Sales Tax, Custom Duty & Excise Duty, which were due for more than six months from the date they became payable.

xx) According to the information and explanation given to us and the records examined by us, no personal expenses have been charged to revenue account other than those payable under contractual obligation or in accordance with generally accepted business practice.

xxi) The company is not a sick industrial company within the meaning of section 3 (1) (0) of the Sick Industrial Companies (Special Provisions) Act, 1985. For BATLlBOI & PUROHIT Chartered Accountants,

(K. K. KSHIRSAGAR) (PARTNER)

Place : Hinganghat Dated : 29th JUNE 2000.

 
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