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Auditor Report of Shree Rajasthan Syntex Ltd.

Mar 31, 2015

Report on the Financial Statements

We have audited the accompanying financial statements of Shree Rajasthan Syntex Ltd., which comprise the Balance Sheet as at March 31, 2015, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended 31st March, 2015, and a summary of significant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements

The Company's Board of Directors are responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Principles generally accepted in India including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenace 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 the 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 internal financial control, that were operating effectively for ensuing 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 provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and 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 of the financial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for purpose of expressing an opinion on whether the Company has in place an adequate Internal financial controls system over financial reporting and the operating effectiveness of such controls.. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by 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 Standalone financial statements, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

b) in the case of 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

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 to the extent applicable.

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

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

b) in our opinion proper books of account as required by law have been kept by the Company so far as 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 statement 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 included in the Auditor's Report and to 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 29(e) & 32 (a) to (f) to the financial statements.

II. The Company does not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses)

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

ANNEXURE REFERRED TO THE AUDITORS REPORT

(Referred to in our report of even date)

Annexure referred to in Point 1 of the Auditor's Report of even date to the members of Shree Rajasthan Syntex Ltd for the year ended as on March 31, 2015. On the basis of such checks as considered appropriate and in terms of the information and explanations given to us we state as under:-

(i) a) The Company has maintained proper records showing full particulars, including quantitative details and situations of Fixed Assets.

b) As per the information and explanations given to us, physical verification of fixed assets has been carried out in terms of the phased program of verification adopted by the company and no material discrepancies were noticed on such verification.

(ii) a) As per the information and explanations given to us, the Inventories (excluding stock, materials and work in progress, which are in transit & stock lying with third parties) have been physically verified during the year by the management. In our opinion, having regard to the nature and location of stocks, the frequency of the physical verification is reasonable.

b) In our opinion and according to the information and explanations given to us procedures of physical verification of inventory followed by the management are 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 is maintaining proper records of inventory and no material discrepancies were noticed on verification of inventory.

(iii) As per the information and explanations given to us, the company has granted unsecured loans to companies covered in the register maintained under section 189 of the Companies Act, 2013. The number of such parties involved are NIL and the maximum balance during the year is NIL and the closing balance as on year end is NIL

a) The receipt of principal amount and interest are regular.

b) Since there is no overdue amount, Clause (iii)b is not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to the purchase of inventory and fixed assets and for sales of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

(v) The Company has accepted deposits, to the best of our knowledge & belief, the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under, where applicable, have been complied with.

(vi) The Central Government has prescribed maintenance of the cost records U/S 148(1) of the Companies Act , 2013 in respect to the company's products. We have broadly reviewed the books of account & records maintained by the company in this connection and are of the opinion that prima facie, the prescribed accounts and records have been made & maintained. We have however, not made a detailed examination of the records with a view to determining whether they are accurate of complete.

(vii) (a) According to the information and explanations given to us and the records examined by us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident Fund, investor education and protection fund, employees' state Insurance, Income Tax, sales tax, wealth tax, service tax, custom duty and excise duty, cess and other statutory dues with appropriate authorities wherever applicable. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding, as at 31st March, 2015 for a period of more than 6 months from the date they became due.

(b) According to the record of the company, the dues of sales tax, income tax, customs, wealth tax, excise duty, service tax which have not been deposited on account of disputes and the forum where the dispute is pending are given hereunder:

Disputed Matters with the various forum.

S. Name of the Statue Nature of the dues Amount (Rs. In lacs) No. Gross. Net of Deposit

1 Rajasthan Stamp Act 1998 Stamp Duty 2.70 2.70

2 Rajasthan Tax into Entry Tax and 303.40 182.09 entry of Goods into Interest Local Area Act, 1999

3 Central Excise Act, 1994 Excise Duty/ 3.07 2.80 Custom Duty 42.41 15.29

80.20 41.04

22.22 22.22

4 Service tax Service Tax 38.63 32.41

18.91 1.76

5 Rajasthan Value Value Added 261.05 200.20 Added Tax, 2003 Tax with RIPS

Name of the Statute Period to Forum where dispute is which the pending amount relates (F.Y.)

Rajasthan Stamp Act 1998 2012-13 Tax Board Ajmer

Rajasthan Tax into entry of Goods into Local Area Act, 1999 2006-07 To Supreme Court of India 2012 -13

Central Excise Act, 1994 - Dy Commissioner/ Asst. Commissioner Commissioner Appeal CESTAT Jt. Secretary

Service Tax - CESTAT

Commissioner Appeal

Rajasthan Value Added Tax, 2003 2007-08 to Raj. Tax Board Ajmer 2011-12

(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 there under has been transferred to such fund within time.

(viii) The Company had accumulated loss at the year end which have not exceeded fifty percentage of the net worth of the company.

The company did not incur cash losses during the year as well as the immediate previous financial year.

(ix) Based on our audit procedures and the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks. There are no debenture holders of the company.

(x) According to the information and explanations given to us the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xi) According to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

(xii) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India and according to the information and explanation given to us, we have neither come across any instances of fraud on or by the company noticed or reported during the year, nor we have been informed of such case by the management.

For and on behalf of

For M. C BHANDARI & Co.

Chartered Accountants

FRN303002E

CA V. Chaturvedi

Place: Udaipur Partner

Date: May 22, 2015 Membership No. : 013296


Mar 31, 2014

We have audited the accompanying financial statements of Shree Rajasthan Syntex Ltd. ("the Company"), which comprise the Balance Sheet as at March 31, 2014, 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 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 notified under the Companies Act, 1956 read with General Circular 15/2013 dated 13th September 2013, issued by 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 Profit and Loss Account, of the profit/ loss for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

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

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 read with General Circular 15/2013 dated 13th September 2013, issued by 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.

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

b) The fixed assets have been physically verified by the management during the year. There is 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.

c) The company has not sold substantial part of plant and machinery , during the year , which effect the going concern status of the company.

(ii) a) As explained to us, the inventory had been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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 are 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 and on the basis of our examination of the inventory records, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records are not material and have been properly dealt with in the books ofaccount.

(iii) a) TheCompany has granted loans to a Trust inearlieryear covered in the register maintained under section 301 of the Companies Act, 1956 Maximum amount of loan during the year was Rs.102.24 Lacs and the year-end balance of loans granted to such party was Rs. 97.80 Lacs.

b) In our opinion, the rate of interest and other term and conditions of above loangranted bythe Companyare not prima facie, prejudicial to the interest of the company

c) According to the information and explanations given to us, the parties to whom loan and advance in the nature of loan have been given are repaying the principal amount as stipulated and a re also regular in payment of interest.

d) The company has taken loans from Directors and other parties covered in the register maintained under section 301 of the Companies Act, 1956 aggregating to Rs 41.13 lacs during the year and total outstanding was Rs. 41.13 Lacs at the close of the year.

e) In our opinion, the rate of interest and other terms and conditions of above loans taken bythe company are not prima facie prejudica I to the interest of the company.

f) The company is regular in payment of Principal amount and interest as per stipulations.

(iv) In our opinion and according to the information and explanations given to us there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to the purchase of inventory and fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

(v) In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956.

a) Based on audit procedures applied by us, to the best of our knowledge and belief and according to the information and explanations given to us we are of the opinion that the contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under section 301, and ;

b) According to information and explanations given to us each of such transactions made in pursuance of such contracts or arrangements have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vi) According to the information and explanations given to us the Company has complied with the Directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA of the Act or any other relevant provisions of the Act and the rules framed there under wherever applicable.

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

(viii) We have broadly reviewed the books of account maintained by the Company relating to the manufacture of the spun yarn 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 maintained. We have not however made a detailed examination of the records with a view to determining whether they are accurate or complete.

(ix) a) According to the records of the Company and information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employee''s State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax ,Customs duty, Excise Duty , Cess and other statutory dues with the appropriate authorities.

b) According to the records of the Company and information and explanations given to us following disputed demands have not been deposited since –

(i) Excise duty demands amounting to Rs. 349.65 lacs pending with C STAT (Rs.256.55 Lacs), Commissioner (Appeals) (Rs. 59.35 Lacs), Asstt. Commissioner (Rs. 11.55 Lacs) and Joint secretary (Rs.22.22 Lacs). Against these demands, Company has deposited Rs. 92.03 Lacs under protest

(ii) Sales tax demands amounting to Rs. 392.36 Lacs pending with Rajasthan Tax Board, Ajmer Against these demands company has deposited under Protest Rs. 74.54 Lacs.

(iii) Entry tax demand amount to Rs.306.11 Lacs pending with High court of Rajasthan against these demand company has deposited under protest Rs.108.34 Lacs.

(iv) ESI Demand amounting to Rs.24.44 lacs pending with appellate authorities against these demands company has deposited Rs. 0.93 lacs under protest.

(v) T.C. Cess amounting to Rs. 10.14 Lacs not deposited as same is disputed and pending with Textile Committee Cess Tribunal, Mumbai.

(x) The Company does not have accumulated losses as at the end of the year, Company has not incurred cash losses in the current year. There were cash losses in immediately preceding financial year.

(xi) Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions, banks and debentures holders

(xii) According to the information and explanations given to us the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The provisions of any Special Statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund/Societies are not applicable to the Company.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by other from banks and financial institutions.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us term loans availed by the Company were prima facie, applied by the Company during the year for the purposes for which the loans were obtained.

(xvii) According to the Cash Flow Statement and records examined by us and according to the information and explanations given to us, on overall basis, funds raised on short term basis have prima facie, not been used during the year for long term investment and vice versa.

(xviii) The company has made preferential allotment of shares on conversion of warrants to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956. The issue price is not prejudicial to the interest of the Company.

(xix) According to the information and explanations given to us and the records examined by us no debentures have been issued hence creation of security does not arise.

(xx) The Company has not raised money by any public issues during the year and hence the question of disclosure and verification of end use of such money does not arise.

( 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 and on behalf of

For M C Bhandari & Co.

Chartered Accountants Firm Reg. No.303002E

CA V. CHATURVEDI

Place : Udaipur Partner

Date : 22nd May 2014 Membership No. 13296


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Shree Rajasthan Syntex Ltd. ("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 then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting 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/ loss for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

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

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.

ANNEXURE REFERRED TO IN PARAGRAPH 3 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) The fixed assets have been physically verified by the management during the year. There is 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.

c) The company has not sold substantial part of plant and machinery , during the year , which effect the going concern status of the company.

(ii) a) As explained to us, the inventory had been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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 are 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 and on the basis of our examination of the inventory records, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records are not material and have been properly dealt with in the books of account.

(iii) a) The Company has granted loans to a Trust in earlier year covered in the register maintained under section 301 of the Companies Act, 1956 Maximum amount of loan during the year was Rs.106.70 Lacs and the year-end balance of loans granted to such party was Rs. 102.24 Lacs.

b) In our opinion, the rate of interest and other term and conditions of above loan granted by the Company are not prima facie, prejudicial to the interest of the company

c) According to the information and explanations given to us, the parties to whom loan and advance in the nature of loan have been given are repaying the principal amount as stipulated and are also regular in payment of interest.

d) The company has taken loans from Directors and other parties covered in the register maintained under section 301 of the Companies Act, 1956 aggregating to Rs 60.70 lacs during the year and total outstanding was Rs. 42.64 Lacs at the close of the year .

e) In our opinion, the rate of interest and other terms and conditions of above loans taken by the company are not prima facie prejudical to the interest of the company.

f) The company is regular in payment of Principal amount and interest as per stipulations.

(iv) In our opinion and according to the information and explanations given to us there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to the purchase of inventory and fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

(v) In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956.

a) Based on audit procedures applied by us, to the best of our knowledge and belief and according to the information and explanations given to us we are of the opinion that the contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under section 301, and ;

b) According to information and explanations given to us each of such transactions made in pursuance of such contracts or arrangements have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vi) According to the information and explanations given to us the Company has complied with the Directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA of the Act or any other relevant provisions of the Act and the rules framed there under wherever applicable.

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

(viii) We have broadly reviewed the books of account maintained by the Company relating to the manufacture of the spun yarn 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 maintained. We have not however made a detailed examination of the records with a view to determining whether they are accurate or complete.

(ix) a) According to the records of the Company and information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employee''s State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax ,Customs duty, Excise Duty , Cess and other statutory dues with the appropriate authorities.

b) According to the records of the Company and information and explanations given to us following disputed demands have not been deposited since –

(i) Excise duty demands amounting to Rs.232.63 lacs pending with CSTAT (Rs.191.79 Lacs), Commissioner (Appeals) (Rs. 37.65 Lacs), Asstt. Commissioner (Rs. 2.17 Lacs) and Joint secretary (Rs. 1.02 Lacs). Against these demands, Company has deposited Rs.84.88 Lacs under protest

(ii) Sales tax demands amounting to Rs. 222.39 Lacs pending with Rajasthan Tax Board, Ajmer Against these demands company has deposited under Protest Rs.40.53 Lacs.

(iii) Entry tax demand amount to Rs.300.49 Lacs pending with High court of Rajasthan against these demand company has deposited under protest Rs.106.48 Lacs.

(iv) ESI Demand amounting to Rs.24.44 lacs pending with appellate authorities against these demands company has deposited Rs. 0.93 lacs under protest.

(v) T.C. Cess amounting to Rs. 10.14 Lacs not deposited as same is disputed and pending with Textile Committee Cess Tribunal, Mumbai.

(x) The Company does not have accumulated losses as at the end of the year, Company has not incurred cash losses in the current year. There were cash losses in immediately preceding financial year.

(xi) Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions, banks and debentures holders

(xii) According to the information and explanations given to us the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The provisions of any Special Statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund/Societies are not applicable to the Company.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by other from banks and financial institutions.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us term loans availed by the Company were prima facie, applied by the Company during the year for the purposes for which the loans were obtained.

(xvii) According to the Cash Flow Statement and records examined by us and according to the information and explanations given to us, on overall basis, funds raised on short term basis have prima facie, not been used during the year for long term investment and vice versa.

(xviii) The company has made preferential allotment of shares on conversion of warrants to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956. The issue price is not prejudicial to the interest of the Company.

(xviii) According to the information and explanations given to us and the records examined by us no debentures have been issued hence creation of security does not arise.

(xix) The Company has not raised money by any public issues during the year and hence the question of disclosure and verification of end use of such money does not arise.

(xx) 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 and on behalf of

For M C Bhandari & Co.

Chartered Accountants,

Firm Reg.no.303002E

CA V. CHATURVEDI

Place : Udaipur Partner

Date : 25th May 2013 Membership No. 13296


Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s. Shree Rajasthan Syntex Limited as at 31st March 2012 and also the Statement of Profit and Loss and cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with 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 amount and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentations. We believe that our audit provides a reasonable basis for our opinion.

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

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

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

ii) In our opinion, proper Books of Account as required by law have been kept by the Company so far as appears from our examination of the books;

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

iv) In our opinion the Balance Sheet the Statement of Profit and Loss and the Cash flow statement dealt with by this report comply with the accounting standards referred to in the sub section (3C) of the Section 211 of the Companies Act 1956 to the extent applicable.

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

vi) In our opinion and to the best of our information and according to the explanation given to us, the said accounts give the information as 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;

a) in the case of Balance Sheet, of the State of Affairs of the Company as at 31.03.2012;

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

c) In the case of cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 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) The fixed assets have been physically verified by the management during the year. There is 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.

c) The company has not sold substantial part of plant and machinery , during the year , which effect the going concern status of the company.

(ii) a) As explained to us, the inventory had been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. .

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 are 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 and on the basis of our examination of the inventory records, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records are not material and have been properly dealt with in the books of account.

(iii) a) The Company has granted loans to a Trust in earlier year covered in the register maintained under section 301 of the Companies Act, 1956 Maximum amount of loan during the year was Rs. 112.66 Lacs and the year-end balance of loans granted to such party was Rs. 106.70 Lacs.

b) In our opinion, the rate of interest and other term and conditions of above loan granted by the Company are not prima facie, prejudicial to the interest of the company

c) According to the information and explanations given to us, the parties to whom loan and advance in the nature of loan have been given are repaying the principal amount as stipulated and are also regular in payment of interest.

d) The company has taken loans from Directors and other parties covered in the register maintained under section 301 of the Companies Act, 1956 aggregating to Rs. 45.15 lacs during the year and total outstanding was Rs. 48.47 Lacs at the close of the year.

e) In our opinion, the rate of interest and other terms and conditions of above loans taken by the company are not prima facie prejudicial to the interest of the company.

f) The company is regular in payment of Principal amount and interest as per stipulations.

(iv) In our opinion and according to the information and explanations given to us there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to the purchase of inventory and fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

(v) In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956.

a) Based on audit procedures applied by us, to the best of our knowledge and belief and according to the information and explanations given to us we are of the opinion that the contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under section 301, and;

b) According to information and explanations given to us each of such transactions made in pursuance of such contracts or arrangements have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vi) According to the information and explanations given to us the Company has complied with the Directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA of the Act or any other relevant provisions of the Act and the rules framed there under wherever applicable.

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

(viii) We have broadly reviewed the books of account , maintained by the Company relating to the manufacture of the spun yarn 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 maintained. We have not however made a detailed examination of the records with a view to determining whether they are accurate or complete.

(ix)a) According to the records of the Company and information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employee's State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs duty, Excise Duty, Cess and other statutory dues with the appropriate authorities.

b) According to the records of the Company and information and explanations given to us following disputed demands have not been deposited since - I Excise duty demands amounting to Rs. 651.96 lacs pending with High Court (Rs. 41.88 Lacs), CSTAT (Rs. 352.72 Lacs), Commissioner (Appeals) (Rs.31.68 Lacs), Asstt. Commissioner (Rs.169.10 Lacs) and Joint secretary (Rs. 56.58 Lacs). Against these demands, Company has deposited Rs. 73.68 Lacs under protest

(ii) Sales tax demands amounting to Rs. 233.16 Lacs pending with Rajasthan Tax Board, Aimer Against these demands company has deposited under ProtestRs. 32.71 Lacs.

(iii) ESI Demand amounting to Rs. 24.44 lacs pending with appellate authorities against these demands company has depositedRs. 0.93 lacs under protest.

(iv) T.C. Cess amounting to Rs. 10.14 Lacs not deposited as same is disputed and pending with Textile Committee Cess Tribunal, Mumbai.

(x) The Company does not have accumulated losses as at the end of the year, Company has incurred cash losses in the current year. There were no cash losses in immediately preceding financial year.

(xi) Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions, banks and debentures holders

(xii) According to the information and explanations given to us the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The provisions of any Special Statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund/Societies are not applicable to the Company.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by other from banks and financial institutions.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us term loans availed by the Company were prima facie, applied by the Company during the year for the purposes for which the loans were obtained.

(xvii) According to the Cash Flow Statement and records examined by us and according to the information and explanations given to us, on overall basis, funds raised on short term basis have prima facie, not been used during the year for long term investment and vice versa.

(xviii) The company has made preferential allotment of warrants to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956. The issue price is not prejudicial to the interest of the Company

(xviii) According to the information and explanations given to us and the records examined by us no debentures have been issued hence creation of security does not arise.

(xix) The Company has not raised money by any public issues during the year and hence the question of disclosure and verification of end use of such money does not arise.

(xx) 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 and on behalf of

M/s M.C. BHANDARI & CO.

Chartered Accountants

Firm Reg. No. 303002E

sd/-

CA V. CHATURVEDI

Date : 28.05.2012 Membership. No. 13296

Place: Udaipur Partner


Mar 31, 2010

1. We have audited the attached Balance Sheet of M/s. Shree Rajasthan Syntex Limited as at 31st March 2010 and also the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with 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 amount and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentations. We believe that our audit provides a reasonable basis for our opinion.

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

4. Further to our comments in the Annxure referred to above, we report that;

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

ii) In our opinion, proper Books of Account as required by law have been kept by the Company so far as appears from our examination of the books;

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

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

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

vi) In our opinion and to the best of our information and according to the explanation given to us, the said accounts give the information as 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;

a) in the case of Balance Sheet, of the State of Affairs of the Company as at 31.03.2010;

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

c) In the case of Cash Flow Statement, of the cash flows for the year ended on that date. ANNEXURE TO THE REPORT REFERRED TO IN PARAGRAPH 3 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) The fixed assets have not been physically verified by the management at the end of the year. There is regular programme of verification which in our opinion is reasonable having regard to the size of the Company and the nature of its assets.

c) The Company has taken Technical Upgradation Programme under TUF. During the year it has disposed of certain Plant & Machinery and other Fixed Assets . This has not affected the going concern concept.

(ii) a) As explained to us, the inventory had been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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 are 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 and on the basis of our examination of the inventory records, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to the book records are not material and have been properly dealt with in the books of account.

(iii) a) The Company has granted loans to a Trust in earlier year covered in the register maintained under section 301 of the Companies Act, 1956 Maximum amount of loan during the year was Rs.122.53 lacs and the year-end balance of loans granted to such party was Rs. 117.20 lacs.

b) In our opinion, the rate of interest and other term and conditions of above loan granted by the Company are not prima facie, prejudicial to the interest of the Company.

c) According to the information and explanations given to us, the parties to whom loan and advance in the nature of loan have been given are repaying the principal amount as stipulated and are also regular in payment of interest.

d) The Company has taken loans from two directors and three other parties covered in the register maintained under Section 301 of the Companies Act, 1956 aggregating to Rs 7.01 lacs during the year and which was Rs. 13.80. lacs at the close of the year .

e) In our opinion, the rate of interest and other terms and conditions of above loans taken by the Company are not prima facie prejudical to the interest of the Company.

f) The Company is regular in payment of Principal amount and interest as per stipulations.

(iv) In our opinion and according to the information and explanations given to us there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to the purchase of inventory and fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

(v) In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956.

a) Based on audit procedures applied by us, to the best of our knowledge and belief and according to the information and explanations given to us we are of the opinion that the contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under Section 301, and ;

b) According to information and explanations given to us each of such transactions made in pursuance of such contracts or arrangements have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vi) According to the information and explanations given to us the Company has complied with the Directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA of the Act or any other relevant provisions of the Act and the rules framed thereunder wherever applicable.

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

(viii) We have broadly reviewed the books of account maintained by the Company relating to the manufacture of the filament and spun yarn 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 maintained. We have not however made a detailed examination of the records with a view to determining whether they are accurate or complete.

(ix) a) According to the records of the Company and information and explanations given to us, the Company has been 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 ,Customs duty, Excise Duty , Cess and other statutory dues with the appropriate authorities except MAT for the assessment year 2007-08 amounting to Rs. 22.44 for which Company has requested to adjust the demand against refunds due for assessment year 2009-10.

b) According to the records of the Company and information and explanations given to us following disputed demands have not been deposited since -

(i) Excise duty demands amounting to Rs.510.40 lacs pending with High Court (Rs. 219.65 lacs), CESTAT (Rs.176.57 lacs), Commissioner (Appeals) (Rs.99.18 lacs), Asstt. Commissioner (Rs. 13.98 lacs) and Joint secretary (Rs. 1.02 lacs). Against these demands, Company has deposited Rs.205.35 lacs under protest

(ii) Sales tax demands amounting to Rs. 33.01 lacs pending with Rajasthan Tax Board, Ajmer and Rs. 79.72 lacs pending with Dy. Commissioner (Appeals). Against their demands Company has deposited under Protest Rs.21.65 lacs.

(iii) ESI Demand amounting to Rs.24.68 lacs pending with appellate authorities against these demands Company has deposited Rs. 1.37 lacs under protest.

(iv) T.C. Cess amounting to Rs. 10.14 lacs not deposited as same is disputed and pending with Textile Committee Cess Tribunal, Mumbai.

(x) The Company does not have accumulated losses as at the end of the year, Company has not incurred cash losses in the current year. In immediately preceding financial year Company suffered cash losses.

(xi) Based on our audit procedures and on the basis of information and explanations given by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions, banks and debentures holders.

(xii) According to the information and explanations given to us the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The provisions of any Special Statute applicable to Chit Fund, Nidhi or Mutual Benefit Fund/Societies are not applicable to the Company.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by other from banks and financial institutions.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us term loans availed by the Company were prima facie, applied by the Company during the year for the purposes for which the loans were obtained.

(xvii) According to the Cash Flow Statement and records examined by us and according to the information and



For and on behalf of

For M C Bhandari & Co.

Chartered Accountants,

Sd/-

CA V. CHATURVEDI

Place : Udaipur Partner

Date : 29th May, 2010 Membership No. 13296



 
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