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Auditor Report of Morarjee Textiles Ltd.

Mar 31, 2018

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying Standalone Ind AS Financial Statements of Morarjee Textiles Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended and a summary of significant accounting policies and other explanatory information, (hereinafter referred to as "the Standalone Ind AS Financial Statements").

Management''s Responsibility for the Standalone Ind AS 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 Standalone Ind AS Financial Statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with relevant rules issued thereunder. 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 design, implementation and maintenance of adequate internal financial controls and ensuring their operating effectiveness and the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone Ind AS Financial Statements, Management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Auditor''s Responsibility

Our responsibility is to express an opinion on these Standalone Ind AS Financial Statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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

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

We are also responsible to conclude on the appropriateness of Management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in the auditor''s report to the related disclosures in the Standalone Ind AS Financial Statements, or if such disclosures are inadequate, to modify the opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS Financial Statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Ind AS 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 including the Ind AS, of the state of affairs of the Company as at March 31, 2018, its profit (including other comprehensive income), its cash flows and changes in equity for the year ended on that date.

Other Matter

The comparative financial information of the Company for the year ended March 31, 2017 and the transition date opening balance sheet as at April 1, 2016 included in these Standalone Ind AS Financial Statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended March 31, 2017 and March 31, 2016 dated May 15, 2017 and May 3, 2016 respectively expressed an unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

(1) As required by the Companies (Auditors'' Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in "Annexure 1", 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 it appears from our examination of those books;

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

d. In our opinion, the aforesaid Standalone Ind AS Financial Statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with relevant rules issued thereunder;

e. On the basis of written representations received from the directors as on March 31, 2018 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act;

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, we give our separate Report in "Annexure 2".

g. 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 Standalone Ind AS Financial Statements -Refer Note no. 38 on Contingent Liabilities to the Standalone Ind AS Financial Statements;

(ii) The Company did not have any material foreseeable losses on long-term contracts including derivative contracts;

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

ANNEXURE 1 TO THE INDEPENDENT AUDITOR''S REPORT

[Referred to in Paragraph 1 under ''Report on Other Legal and Regulatory Requirements''in the Independent Auditor''s Report of even date to the members of Morarjee Textiles Limited ("the Company") on the Standalone Ind AS Financial Statements for the year ended March 31, 2018]

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

(b) During the year, the fixed assets of the Company have been physically verified by the Management and as informed, no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) The title deeds of immovable properties recorded as fixed assets in the books of account of the Company are held in the name of the Company.

(ii) The inventory (excluding stocks lying with third parties) has been physically verified by the Management during the year. In our opinion, the frequency of verification is reasonable. In respect of inventory lying with third parties at the year end, it has substantially been confirmed by them. As informed, no material discrepancies were noticed on physical verification carried out during the year.

(iii) As informed, the Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, Paragraphs 3 (iii)(a), 3 (iii)(b) and 3 (iii)(c) of the Order are not applicable to the Company.

(iv) Based on information and explanation given to us in respect of loans, investments, guarantees and securities, the Company has complied with the provisions of Section 185 and 186 of the Act.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within 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 in respect of products where the maintenance of cost records has been specified by the Central Government under sub-section (1) of Section 148 of the Act and the rules framed there under and we are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

(vii) (a) The Company is generally regular in depositing with appropriate authorities, undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, value added tax, goods and services tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, however, delays in deposit have not been serious.

AND

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

(b) According to the information and explanation given to us, there are no dues with respect to income tax, sales tax, service tax, value added tax, goods and services tax, customs duty, excise duty, which have not been deposited on account of any dispute, except as follows:

Name of the Statute

Nature of Dues *

Financial Year

Amount (Rs. in lakhs)

Forum where Dispute is Pending

Central Excise Act, 1944

Excise duty

1979-80 to 1985-86

6.22

Commissioner

1990-91

0.09

1993-94 to 1995-96

146.49

1999-2000 to 2001-02

218.61

Central Excise Act, 1944

Excise duty

1990-91 to 1991-92

2.10

CESTAT

1995-96 to 2002-03

488.27

Name of the Statute

Nature of Dues *

Financial Year

Amount (Rs. in lakhs)

Forum where Dispute is Pending

Central Excise Act, 1944

Excise duty

1997-98 to 2001-02

3.19

High Court

2006-07 to 2008-09

90.11

Service tax

2007-08

30.71

Central Excise Act, 1944

Excise duty

1981-84

296.14

Supreme Court

Maharashtra Value Added Tax Act, 2002

Sales tax

2006-07 to 2007-08

66.20

Joint Commissioner of Sales Tax

Maharashtra Value Added Tax Act, 2002

Sales tax

2003-04

112.07

Sales Tax Tribunal

* Includes amounts of interest and penalty, where ascertainable.

(viii)According to the information and explanations given to us, the Company has not defaulted in repayment of loans or borrowings to financial institutions and banks, as at the balance sheet date. As informed, the Company has not availed any loan or borrowing from any government nor has it issued any debentures.

(ix) In our opinion and according to the information and explanations given to us, the Company has utilised the money raised by way of term loans during the year for the purposes for which they were raised.

As informed, the Company has not raised money by way of initial public issue offer / further public offer (including debt instruments).

(x) 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 explanations given to us, we have neither come across any instance of fraud by the Company or any fraud on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such instance by the Management.

(xi) According to the information and explanations given to us, managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, Paragraph 3(xii) of the Order is not applicable to the Company.

(xiii)According to the information and explanation given to us, all transactions entered into by the Company with the related parties are in compliance with Sections 177 and 188 of Act, where applicable and the details have been disclosed in the Standalone Ind AS Financial Statements, as required by the applicable Indian Accounting Standards. (Refer Note no. 48 to the Standalone Ind AS Financial Statements).

(xiv)The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, Paragraph 3(xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him during the year.

(xvi)According to the information and explanation given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

ANNEXURE 2 TO THE INDEPENDENT AUDITOR''S REPORT

[Referred to in Paragraph 2 under ''Report on Other Legal and Regulatory Requirements'' in the Independent Auditor''s Report of even date to the members of Morarjee Textiles Limited on the Standalone Ind AS Financial Statements for the year ended March 31, 2018]

Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Morarjee Textiles Limited ("the Company") as of March 31, 2018 in conjunction with our audit of the Standalone Ind AS Financial Statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Company''s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting ("the Guidance Note") issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing specified under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness.

Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.

For Haribhakti & Co. LLP

Chartered Accountants

ICAI Firm Registration No. 103523W / W100048

Sumant Sakhardande

Partner

Membership No. 034828

Mumbai: May 24, 2018


Mar 31, 2017

TO THE MEMBERS OF MORARJEE TEXTILES LIMITED

INDEPENDENT AUDITORS'' REPORT

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of MORARJEE TEXTILES LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2017, and 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, 2016, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act ("the Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

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

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

(e) On the basis of the written representations received from the directors as on 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to adequacy of Internal Financial Controls over Financial Reporting of the Company and the operating effectiveness of such controls during the period covered by our audit, refer to our separate report in Annexure B.

(g) 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 29(A) to the financial statements;

(ii) the Company does not have any long-term contracts including derivative contracts for which there are any material foreseeable losses.

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

(iv) the Company has provided requisite disclosures in the standalone financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November 08, 2016 to December 30, 2016. Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the Management. Refer Note 37 to the standalone financial statements.

(Referred to in paragraph 1 under paragraph "Report on Other Legal and Regulatory Requirements" of the Independent Auditors'' Report of even date)

1. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of Property, Plant & Equipment.

(b) There is a regular program of physical verification of Property, Plant & Equipment which in our opinion is reasonable having regard to the size of the Company and the nature of Property, Plant & Equipment. No material discrepancies have been noticed in respect of the assets physically verified during the year.

(c) The title deeds of immovable properties forming part of Property, Plant & Equipment of the Company as disclosed in Note 12 of the financial statements are held in the name of the Company.

2. The inventory excluding stocks with third parties has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. In respect of inventory lying with third parties at the year end, written confirmations for the same are obtained. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act.

4. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act in respect of loans and investment made and guarantee or security provided by it.

5. In our opinion, and according to the information and explanations given to us, the Company has not accepted any deposit from the public in accordance with the provisions of section 73 to 76 or any other relevant provisions of the Act and rules framed there under. Accordingly, paragraph 3(v) of the order is not applicable to the Company.

6. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government of India for the maintenance of cost records under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

Name of the Statute

Nature of Dues

Financial Year

Amount Rs, in lacs

Forum where Dispute is Pending

Central Excise Act 1944

Interpretation of Act

1979-80 to 1985-86

6.84

First Appeal (Commissioner Level)

1990-91

0.09

1993-94 to 1995-96

146.49

1999-2000 to 2001-02

218.61

Central Excise Act 1944

Interpretation of Act

1976-77

0.19

Second Appeal (CESTAT)

1990-91 to 1991-92

2.35

1995-96 to 2002-03

45.86

2008-09

111.63

Central Excise Act 1944

Interpretation of Act

1997-98 to 2001-02

3.19

High Court

Central Excise Act 1944

Interpretation of Act

2008-09

30.72

Central Excise Act 1944

Interpretation of Act

1981-1984

296.14

Supreme Court

Maharashtra Value Added Tax Act, 2002

Interpretation of Act

2006-07 to 2007-08

66.20

Joint Commissioner of Sales Tax

Maharashtra Value Added Tax Act, 2002

Interpretation of Act

2003-04

112.07

Sales Tax Tribunal

7. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities.

According to the information and explanations given to us and the records of the Company examined by us, in our opinion, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable were in arrears as at 31st March 2017 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax or cess as at 31st March 2017 which have not been deposited on account of a dispute, are as follows:

8. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution, bank and government as at the balance sheet date.

9. The Company has not raised any money by way of an initial public offer or further public offer (including debt instruments). In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained.

10. According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

11. According to the information and explanations given to us, the Company has complied with the provisions of section 197 read with schedule V of the Act with regards to payment or provision of managerial remuneration.

12. The Company is not a Nidhi Company as defined under section 406(1) of the Act and thus Nidhi Rules 2014 are not applicable to the Company.

(Referred to in paragraph 2(f) under paragraph "Report on Other Legal and Regulatory Requirements" of the Independent Auditors'' Report of even date)

Report on the Internal Financial Controls under Clause

(i) of sub-section 3 of Section 143 of the Act.

We have audited the internal financial controls over financial reporting of the company as of March 31, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial controls:

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting

13. The transactions entered by the Company with related parties are in compliance with section 177 and 188 of the Act. The details of all such transactions are disclosed in Note 38 to the financial statements as required under Accounting Standard 18, Related Party Disclosures.

14. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.

15. In our opinion and according the information and explanations given to us, the Company has not entered into any non-cash transactions with its directors or persons connected with him.

16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors'' Responsibility:

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by ICAI and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting were established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting:

A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflected the transactions and depositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting:

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion:

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Manubhai & Shah LLP

Chartered Accountants

Firm Registration No.: 106041W / W100136

Ashish H. Shah

Partner

Membership No: 103750

Mumbai, May 15, 2017


Mar 31, 2016

TO THE MEMBERS OF MORARJEE TEXTILES LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of MORARJEE TEXTILES LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and 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, 2016, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act ("the Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

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

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

(e) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to adequacy of Internal Financial Controls over Financial Reporting of the Company and the operating effectiveness of such controls during the period covered by our audit, refer to our separate report in Annexure B.

(g) 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 29(A) to the financial statements;

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

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

(Referred to in paragraph 1 under paragraph "Report on Other Legal and Regulatory Requirements" of the Independent Auditors'' Report of even date)

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

(b) There is a regular program of physical verification of fixed assets which in our opinion is reasonable having regard to the size of the Company and the nature of fixed assets. No material discrepancies have been noticed in respect of the assets physically verified during the year.

(c) The title deeds of immovable properties forming part of Fixed Assets of the Company as disclosed in Note 12 of the financial statements are held in the name of the Company.

2. The inventory excluding stocks with third parties has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. In respect of inventory lying with third parties at the year end, written confirmations for the same are obtained. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act.

4. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act in respect of loans and investment made and guarantee or security provided by it.

5. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Sections 73, 74, 75 and 76 or any other relevant provisions of the Act and the Rules framed there under to the extent notified, with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

6. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government of India for the maintenance of cost records under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

7. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities.

According to the information and explanations given to us and the records of the Company examined by us, in our opinion, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable were in arrears as at 31st March 2016 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax, wealth tax, service tax, duty of customs duty of excise, value added tax or cess as at 31St March 2016 which have not been deposited on account of a dispute, are as follows:

Name of the Statute

Nature of Dues

Financial Year

Amount Rs. in lacs

Forum where Dispute is Pending

Central Excise Act 1944

Interpretation of Act

1979-80 to 1985-86

6.84

First Appeal

1990-91

0.09

(Commissioner Level)

1993-94 to 1995-96

146.49

1999-2000 to 2008-09

417.81

Central Excise Act 1944

Interpretation of Act

1976-77

0.19

Second Appeal (CESTAT)

1990-91 to 1991-92

2.35

1995-96 to 2005-06

585.45

2006-07 to 2008-09

218.14

Central Excise Act 1944

Interpretation of Act

1997-98 to 2001-02

3.19

High Court

Central Excise Act 1944

Interpretation of Act

1981-1984

296.14

Supreme Court

2001-02 to 2002-03

124.43

Maharashtra Value Added Tax Act, 2002

Interpretation of Act

2003-04

119.70

Joint Commissioner of Sales Tax

Maharashtra Value Added Tax Act, 2002

Interpretation of Act

2006-07 to 2007-08

66.20

Maharashtra Value Added Tax Act, 2002

Interpretation of Act

2010-11

23.47

Maharashtra Value Added Tax Act, 2002

Interpretation of Act

2003-04

112.06

Sales Tax Tribunal


8. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution, bank, government or debenture holders as at the balance sheet date.

9. The Company has not raised any money by way of an initial public offer or further public offer (including debt instruments). In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained.

10. According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

11. The Company has paid managerial remuneration to the whole time directors which is in excess of limits prescribed under section 197 read with Schedule V of the Companies Act 2013 by Rs. 8.84 Lacs. The same is shown as recoverable under head Short Term Loans & Advances (Refer note no. 19) & will be recovered by the Company from the relevant directors.

12. The Company is not a Nidhi Company as defined under section 406(1) of the Act and thus Nidhi Rules 2014 are not applicable to the Company.

13. The transactions entered by the Company with related parties are in compliance with section 177 and 188 of the Act. The details of all such transactions are disclosed in Note no. 37 to the financial statements as required under Accounting Standard 18, Related Party Disclosures.

14. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.

15. In our opinion and according the information and explanations given to us, the Company has not entered into any non-cash transactions with its directors or persons connected with him.

16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

FOR MANUBHAI & SHAH LLP

Chartered Accountants

Firm Registration No.: 106041W / W100136

Ashish H. Shah

Partner

Membership No: 103750

Mumbai, May 3, 2016


Mar 31, 2015

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

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2015, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act ("the Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

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

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

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

(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 29(A) to the financial statements;

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

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

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph 1 under paragraph "Report on Other Legal and Regulatory Requirements" of the Independent Auditors'' Report of even date)

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

(b) There is a regular program of physical verification of fixed assets which in our opinion is reasonable having regard to the size of the Company and the nature of fixed assets. No material discrepancies have been noticed in respect of the assets physically verified during the year.

2. (a) The inventory excluding stocks with third parties has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. In respect of inventory lying with third parties at the year end, written confirmations for the same are obtained.

(b) In our opinion, 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 buisness.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. The Company has not granted secured/ unsecured loans, to companies / firms / other parties covered in the register maintained under Section 189 of the Act.

4. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its buisness for the purchase of inventory and fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across, nor have been informed of, any continuing

failure to correct major weaknesses in the aforesaid internal control system.

5. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Sections 73, 74, 75 and 76 or any other relevant provisions of the Act and the Rules framed thereunder to the extent notified, with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

6. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government of India for the maintenance of cost records under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

7. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities.

According to the information and explanations given to us and the records of the Company examined by us, in our opinion, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable were in arrears as at March 31, 2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax, wealth tax, service tax, duty of customs duty of excise, value added tax or cess as at March 31, 2015 which have not been deposited on account of a dispute, are as follows:

Name of the Statute Nature of Dues Financial Year

Central Excise Act 1944 Interpretation of Act 1979-80 to 1985-86 1990-91 1993-94 to 1995-96 1999-2000 to 2008-09

Central Excise Act 1944 Interpretation of Act 1976-77 1990-91 to 1991-92 1995-96 to 2005-06 2006-07 to 2008-09

Central Excise Act 1944 Interpretation of Act 1997-98 to 2001-02

Central Excise Act 1944 Interpretation of Act 1981-1984 1999-2000 to 2002-03

Maharashtra Value Added Interpretation of Act 2003-04 Tax Ach 2002 2006-07 to 2007-08

2010-11

2003-04

Name of the Staute Amount Forum where Dispute is Pending Rs in lacs

Central Excise Act 1944 6.84 First Appeal 0 09 (Commissioner Level)

Central Excise Act 1944 146.49

Central Excise Act 1944 417.81

Central Excise Act 1944 0.19 Second Appeal 235 (CESTAT)

Central Excise Act 1944 586.66

Central Excise Act 1944 218.14

Central Excise Act 1944 3.19 High Court

Central Excise Act 1944 296.14 Supreme Court

Central Excise Act 1944 540.65

Maharashtra Value Added 119.70 Joint Commissioner of Tax Act2002 Sales Tax

Maharashtra Value Added 66.20 Tax Act2002

Maharashtra Value Added 23.47 Tax Act2002

Maharashtra Value Added 112.06 Sales Tax Tribunal Tax Act2002

(c) The amount required to be transferred to Investor Education and Protection Fund has been transferred within the stipulated time in accordance with the provisions of the Companies Act, 1956 and the rules made thereunder.

8. The Company has no accumulated losses as at the end of the financial year and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

9. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

10. The Company has not given any guarantees for loans taken by others from banks or financial institutions during the year.

11. In our opinion, and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained.

12. According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

For Manubhai & Shah Chartered Accountants (Firm''s Registration No.: 106041W)

Kshitij M. Patel (Partner) (Membership No.:045740)

Mumbai, 8th May, 2015.


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the 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 31st March, 2014;

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

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

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 purposes of our audit.

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

(c) The Balance Sheet, Statement of Profit and Loss and the 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 the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act 1956 read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act 2013.

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

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

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

1 (a) The Company has maintained reasonable records showing full particulars including quantitative details and location of the Fixed Assets.

(b) As informed, there is a regular program of physical verification, which in our opinion is reasonable, having regard to the size of the Company and the nature of fixed assets. No material discrepancies have been noticed in respect of the assets physically verified during the year.

(c) The Company has not disposed of substantial part of fixed assets during the year.

2 (a) According to the information and explanations given to us, inventory has been physically verified by themanagement during and at the year end. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its business.

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

(c) The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verification between the physical stocks and the book records.

3 The Company has neither granted nor taken any loans, secured or unsecured, to or from Companies, firms or other parties covered in the register required to be maintained under section 301of the Act. In view of the above, clauses 4(iii){b, c, d, f & g) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

4 In our opinion, and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of stores, raw materials, plant & machinery, equipment & other assets and with regards to sale of goods and services. Further on the basis of our examination and according to the information and explanations given to us, there is no major weakness in the internal control procedures.

5 (a) In our opinion, and according to the information and explanations given to us, the particulars of all contracts

and arrangements referred to in section 301 of the Companies Act, 1956 have been properly entered in the register maintained under section 301of the Act.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of '' 5 Lacs with any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6 In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from public during the year and hence provisions of clause 4(vi) of Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

7 In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8 We are informed that the cost records are required to be maintained by the Company under section 209 (1) (d) of the Companies Act, 1956 for textile product of the Company. We have not reviewed the cost record maintained by the Company, but we are informed that the Company has maintained the prescribed cost records.

9 (a) The Company is generally regular in depositing undisputed statutory dues including Provident Fund,

Employees '' State Insurance, Income Tax, Service Tax, Wealth Tax, Custom Duty, Excise Duty, cess and other statutory dues with the appropriate authorities during the year except some delay. There are no undisputed statutory dues outstanding as on 31st March 2014 for the period of more than six months from the date they became payable.

(b) According to the records of the Company and information and explanation given to us, there are following disputed dues on account of Income Tax, Service Tax, Custom Duty and Excise duty dues which have not been deposited with respective authorities.

Name of the Statute Nature of Dues Financial Year Amount in lacs Central Excise Act 1944 Interpretation of Act 1979-80 to 1985-86 6.84 1990-91 0.09 1993-94 to 1995-96 146.49

1999-2000 to 2008-09 605.85

Central Excise Act 1944 Interpretation of Act 1976-77 0.19 1990-91 to 1991-92 2.35 1995-96 to 2005-06 586.66

2007-08 to 2008-09 83.13

Central Excise Act 1944 Interpretation of Act 1997-98 to 2001-02 3.19 Central Excise Act 1944 Interpretation of Act 1981-1984 296 .14 1998-99 to 2002-03 839.54

Name of the Statute Forum where Dispute is Pending

Central Excise Act 1944 First Appeal (Commissioner Level) Central Excise Act 1944 Second Appeal (CESTAT)

Central Excise Act 1944 High Court

Central Excise Act 1944 Supreme Court 10 The Company does not have any accumulated losses as at the end of the financial year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

11 According to the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank during the year. Also Company does not have any debentures.

12 According to the information and explanation 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.

13 As the Company is not a chit fund, nidhi, mutual benefit fund or society the provision of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 is not applicable to the Company.

14 As the Company is not dealing or trading in shares, securities, debentures and other investments, the provision of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 is not applicable to the Company.

15 According to the information and explanation given to us, the Company has not given any guarantees during the year under review.

16 According to the information and explanation given to us, the term loans taken during the year are utilized for the purpose for which they were taken.

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

18 The Company has not made any preferential allotment of shares during the year.

19 The Company has not issued any debentures during the year.

20 The Company has not raised any money by way of issue of public issue during the year.

21 As per the information and explanation given to us, no material fraud on or by the Company has been noticed during the year.

For Shah & Co. Chartered Accountants Firm Registration No: 109430W

Ashish H. Shah Partner Mumbai, 23rd May, 2014 Membership No: 103750


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fnancial statements of MORARJEE TEXTILES LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2013, the Statement of Proft and Loss and the Cash Flow Statement for the year then ended, and a summary of the signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows 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 fnancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these fnancial 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 the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fnancial statements are free from material misstatement.

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

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

Basis for Qualifed Opinion

On the basis of inquiries made under sub-section (1A) of Section 227 of The Companies Act, 1956, the Company has not accrued interest income on unsecured loan given to Integra Garments and Textiles Limited (Previously known as Five Star Mercantile Limited) – a company within the same management, amounting to Rs. 422 lacs for the year ended on 31st March 2013. The said loan is recovered in full during the year. (Refer note no. 42 in the fnancial statements). As a result of the same, the proft for the year ended on 31st March 2013 is lower by Rs. 422 lacs.

Qualifed Opinion

In our opinion and to the best of our information and according to the explanations given to us, the fnancial 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 except for non provision of interest income in the preceding paragraph:

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

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

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

AnnEXURE TO THE InDEPEnDEnT AUDITORS'' REPORT

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

1 (a) The Company has maintained reasonable records showing full particulars including quantitative details and location of the Fixed Assets.

(b) As informed, there is a regular program of physical verifcation, which in our opinion is reasonable, having regard to the size of the Company and the nature of fxed assets. No material discrepancies have been noticed in respect of the assets physically verifed during the year.

(c) The Company has not disposed of substantial part of fxed assets during the year.

2 (a) According to the information and explanations given to us, inventory has been physically verifed by the management during and at the year end. In our opinion, the frequency of verifcation is reasonable having regard to the size of the Company and the nature of its business.

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

(c) The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verifcation between the physical stocks and the book records.

3 (a) During the year, the Company has received repayment of an opening unsecured loan to one party covered in the register maintained under section 301 of the Companies Act, 1956.

Name of the Party Relationship with Opening balance as at Balance as at 31st March

the Company 1st April 2012 (Rs. In Lacs) 2013 (Rs. In Lacs)

Integra Garments & Textiles Limited Company 3,749.51 NIL

(formerly known as Five Star under the same

Mercantile Limited) management

(b) The Company has not accrued interest income amounting to Rs. 422 lacs on the above mentioned unsecured loan.

(c) The principal amount is received in full during the year and the interest portion on the same is waived off. Thus clause 4(iii)(d) is also not applicable to the Company (Refer note no. 42 in the fnancial statements).

(d) The Company has not accepted any loans, secured or unsecured, from the parties covered in the register maintained under section 301 of the Companies Act, 1956.

In view of clause 4 (iii)(e) of the Companies (Auditor''s Report) Order, 2003, clause 4(iii)(f & g) are not applicable to the company.

4 In our opinion, and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of stores, raw materials, plant & machinery, equipment & other assets and with regards to sale of goods and services.

Further on the basis of our examination and according to the information and explanations given to us, there is no major weakness in the internal control procedures.

5 (a) In our opinion, and according to the information and explanations given to us, the particulars of all contracts and arrangements referred to in section 301 of the Companies Act, 1956 have been properly entered in the register maintained under section 301 of the Act.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 Lacs with any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6 In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from public during the year and hence provisions of clause 4(vi) of Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

7 In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8 We are informed that the cost records are required to be maintained by the Company under section 209 (1) (d) of the Companies Act, 1956 for textile product of the Company. We have not reviewed the cost record maintained by the Company, but we are informed that the Company has maintained the prescribed cost records.

9 (a) The Company is generally regular in depositing undisputed statutory dues including Provident Fund,

Employees'' State Insurance, Income Tax, Service Tax, Wealth Tax, Custom Duty, Excise Duty, cess and other statutory dues with the appropriate authorities during the year except some delay. There are no undisputed statutory dues outstanding as on 31 March 2013 for the period of more than six months from the date they became payable.

The Company does not have any accumulated losses at the end of the fnancial year and has not incurred cash losses in the current fnancial year and in the immediately preceding fnancial year.

11 According to the information and explanation given to us, the Company has not defaulted in repayment of dues to any fnancial institution or bank during the year. Also Company does not have any debentures.

12 According to the information and explanation 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.

13 As the Company is not a chit fund, nidhi, mutual beneft fund or society the provision of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 is not applicable to the Company.

14 As the Company is not dealing or trading in shares, securities, debentures and other investments, the provision of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 is not applicable to the Company.

15 According to the information and explanation given to us, the Company has not given any guarantees during the year under review.

16 According to the information and explanation given to us, the term loans taken during the year are utilized for the purpose for which they were taken.

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

18 The Company has not made any preferential allotment of shares during the year.

19 The Company has not issued any debentures during the year.

20 The Company has not raised any money by way of issue of public issue during the year.

21 As per the information and explanation given to us, no material fraud on or by the Company has been noticed during the year.

For SHAH & CO.

Chartered Accountants

FRN: 109430W Ashish H. Shah

Partner

M. No.: 103750

Mumbai : 28th May, 2013


Mar 31, 2012

We have audited the attached Balance Sheet of Morarjee Textiles Limited, ('the Company') as at 31st March 2012, and also the Statement of Profit and Loss and the Cash Flow Statement of the Company 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.

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 statement presentation. We believe that our audit provides a reasonable basis of our opinion.

On the basis of inquiries made under sub-section (1A) of Section 227 of The Companies Act, 1956, the Company has not accrued interest income on unsecured loan given to Five Star Mercantile Limited - a company within the same management, amounting to Rs. 221 lacs for the year ended on 31st March 2012. As a result of the same, the profit for the year ended on 31st March 2012 is lower by Rs. 221 lacs.

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

Further to our comments in the Annexure referred to above, we state 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 it appears from our examination of those books;

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

(d) In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement read with notes thereon dealt with by this report comply with the Accounting Standards referred to in Section 211(3C) of Companies Act, 1956.

(e) On the basis of the written representations received from the Directors of the Company as at 31 March 2012, and taken on record by the Board of Directors, we report that none of the directors of the Company 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, the said financial statements read with notes thereon give the information required by the Act, in the prescribe manner and give a true and fair view in conformity with the accounting principles generally accepted in India except for non provision of interest income as mentioned in the preceding paragraph:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2012;

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 4 OF THE AUDITORS' REPORT TO THE MEMBERS OF MORARJEE TEXTILES LIMITED FOR THE YEAR ENDED ON 31ST MARCH, 2012.

1 (a) The Company has maintained reasonable records showing full particulars including quantitative details and location of the Fixed Assets.

(b) As informed, there is a regular program of physical verification, which in our opinion is reasonable, having regard to the size of the Company and the nature of fixed assets. No material discrepancies have been noticed in respect of the assets physically verified during the year.

(c) The Company has demerged the garment manufacturing division at Banglore into a separate company as per the demerger scheme. As a result of the same all the fixed assets of the said division are disposed off at book value to the demerged company as mentioned in notes 11, 29 & 30 forming part of the financial statements. The above disposal does not affect the going concern for the Company.

2 (a) According to the information and explanations given to us, inventory has been physically verified by the management during and at the year end. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its business.

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

(c) The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verification between the physical stocks and the book records.

3 (a) The Company has granted an unsecured loan during the year to one party covered in the register maintained under sections 301 of the Companies Act, 1956.

Name of the Party Relationship with the Amount Balance as at 31st Company (Rs. In Lacs) March 2012 (Rs. In Lacs)

Five Star Mercantile Limited Company under the same 3,749.51 3,749.51 management

(b) The Company has not accrued interest income amounting to Rs. 221 lacs on the above mentioned unsecured loan.

(c) The principal amount and interest on the same is not recovered as at the Balance Sheet date.

(d) The Company is in the process of taking reasonable steps for recovery of principal and interest amount.

(e) The Company has not accepted any loans, secured or unsecured, from the parties covered in the register maintained under section 301 of the Companies Act, 1956.

In view of clause 4 (iii)(e) of the Companies (Auditor's Report) Order, 2003, clause 4(iii)(f & g) are not applicable to the company.

4 In our opinion, and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of stores, raw materials, plant & machinery, equipment & other assets and with regards to sale of goods and services. Further on the basis of our examination and according to the information and explanations given to us, there is no major weakness in the internal control procedures.

5 (a) In our opinion, and according to the information and explanations given to us, the particulars of all contracts and arrangements referred to in section 301 of the Companies Act, 1956 have been properly entered in the register maintained under section 301 of the Act.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 Lacs with any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6 In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from public during the year and hence provisions of clause 4(vi) of Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

7 In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8 We are informed that the cost records are required to be maintained by the Company under section 209 (1) (d) of the Companies Act, 1956 for textile product of the Company. We have not reviewed the cost record maintained by the Company, but we are informed that the Company has maintained the prescribed cost records.

9 (a) The Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Service Tax, Wealth Tax, Custom Duty, Excise Duty, cess and other statutory dues with the appropriate authorities during the year except some delay. There are no undisputed statutory dues outstanding as on 31 March 2012 for the period of more than six months from the date they became payable.

(b) According to the records of the Company and information and explanation given to us, there are following disputed dues on account of Income Tax, Service Tax, Custom Duty, dues which have not been deposited with respective authorities.

Name of the Statute Nature of Dues Financial Year Amount Forum where Dispute is Rs. in lacs Pending

Central Excise Act 1944 Interpretation of Act 1976-1977 00.19 First Appeal (Commissioner Level)

1979-80 to 1985-86 06.84

1990-91 00.09

1993-94 to 1995-1996 146.49

1999-2000 to 2008-09 475.32

Central Excise Act 1944 Interpretation of Act 1990-91 to 1991-92 02.35 Second Appeal (CESTAT)

1995-96 to 2005-06 747.71

2007-08 to 2008-09 84.27

Central Excise Act 1944 Interpretation of Act 1997-98 to 2001-02 03.19 High Court

Central Excise Act 1944 Interpretation of Act 1981-1984 296.14 Supreme Court

1998-99 to 2000-01 715.11

10 The Company has not incurred cash loss during the current financial year and in the immediately preceding financial year. The accumulated losses as at the end of financial year 31 March 2012 does not exceed fifty percent of the networth of the Company.

11 According to the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank during the year. Also Company does not have any debentures.

12 According to the information and explanation 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.

13 As the Company is not a chit fund, nidhi, mutual benefit fund or society the provision of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 is not applicable to the Company.

14 As the Company is not dealing or trading in shares, securities, debentures and other investments, the provision of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 is not applicable to the Company.

15 According to the information and explanation given to us, the Company has not given any guarantees during the year under review.

16 According to the information and explanation given to us, the term loans taken during the year are utilized for the purpose for which they were taken.

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

18 The Company has not made any preferential allotment of shares during the year.

19 The Company has not issued any debentures during the year.

20 The Company has not raised any money by way of issue of public issue during the year.

21 As per the information and explanation given to us, no material fraud on or by the Company has been noticed during the year.

For SHAH & CO.

Chartered Accountants

FRN: 109430W

Ashish H. Shah

Partner

M. No.: 103750

Mumbai: 1st August, 2012


Mar 31, 2011

We have audited the attached Balance Sheet of Morarjee Textiles Limited as at 31st March 2011, and also the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto, in which are included the audited accounts of Integra – Division of Morarjee Textiles Limited which are audited by other auditors. 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 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 statement presentation. We believe that our audit provides a reasonable basis of our opinion.

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

Further to our comments in the Annexure referred to in paragraph 3 above, we state 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 reports on the accounts of Integra – Division of Morarjee Textiles Limited audited by other auditors have been forwarded to us and have been dealt with by us in preparing this report.

(d) The Balance Sheet, the Profit and Loss Account and the Cash Flow Statement referred to in this report are in agreement with the books of account.

(e) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211(3C) of Companies Act, 1956.

(f) On the basis of the written representations received from the directors, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 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.

(g) In our opinion and as per the information and according to the explanations given to us, the said Balance Sheet and the Profit and Loss Account, read together with the 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 on 31st March 2011;

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

and

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT TO THE MEMBERS OF MORARJEE TEXTILES LIMITED FOR THE YEAR ENDED 31ST MARCH, 2011.

1 (a) The Company has maintained proper records showing full particulars including quantitative details and location of the Fixed Assets except in garment division (Integra) at Bangalore where Company is still in the process of compiling the above mentioned data.

(b) There is a regular program of physical verification, which in our opinion is reasonable, having regard to the size of the Company and the nature of fixed assets. No material discrepancies have been noticed in respect of the assets physically verified during the year.

(c) The Company has not disposed of substantial part of fixed assets during the year.

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

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material and have been properly dealt with in the books of account.

3 (a) The Company has not granted any loans during the year to the parties covered in the register maintained under section 301 of the Companies Act, 1956.

In view of clause 4 (iii)(a) of the Companies (Auditors Report) Order, 2003, clause 4 (iii) (b, c & d) are not applicable to the Company.

(b) The Company has not accepted any loans during the year from the parties covered in the register maintained under section 301 of the Companies Act, 1956.

In view of clause 4 (iii)(e) of the Companies (Auditors Report) Order, 2003, clauses 4 (iii) (f & g) are not applicable to the Company.

4 In our opinion, and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of stores, raw materials including components, packing materials, plant and machinery, equipment and other assets and with regard to sale of goods and services. There is no major weakness in the internal control procedures.

5 (a) The particulars of all contracts and arrangements referred to in section 301 of the Companies Act, 1956 have been properly entered in the register maintained under section 301 of the Act.

(b) In our opinion, and according to the information and explanations given to us, the contracts and arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market price.

6 The Company has not accepted any deposits from public and hence provisions of clause 4 (vi) are not applicable to the Company.

7 In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8 We are informed that the cost records are required to be maintained by the Company under Section 209(1) (d) of the Companies Act, 1956 for textile products of the Company. We have not reviewed the cost records maintained by the Company, but we are informed that the Company maintained the prescribed cost records.

9 (a) 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, Custom Duty, Excise Duty, cess and other statutory dues with the appropriate authorities.

(b) Following dues are not deposited on account of disputes pending at various forums.

Nature of Statute Nature of Dues Financial year

Central Excise Act, 1944 Interpretation of Act 1976-1977

1979-80 to 1985-86

1990-91

1993-94 to 1995-1996

1999-2000 to 2008-09

Central Excise Act, 1944 Interpretation of Act 1990-91 to 1991-92

1995-96 to 2005-06

2007-08 to 2008-09

Central Excise Act, 1944 Interpretation of Act 1997-98 to 2001-02

Central Excise Act, 1944 Interpretation of Act 1981-1984

1998-99 to 2000-01

Customs Tariff Act 1975 Customs Duty Upto 2005-2006

Nature of Statute Amount Forum where Rs. in Lacs Dispute is Pending

Central Excise Act, 1944 00.19 First Appeal

06.84 (Commissioner Level)

00.09

146.49

475.32

Central Excise Act, 1944 02.35 Second Appeal

817.20 (CESTAT)

84.27

Central Excise Act, 1944 03.19 High Court

Central Excise Act, 1944 296.14 Supreme Court

715.11

Customs Tariff Act 1975 88.11 Joint Director General of Foreign Trade

10 The Company has not incurred cash loss in the current year and also in the immediately preceding financial year and there are accumulated losses in the balance sheet as on 31/3/2011.

11 The Company has not defaulted during the year in repayment of dues to any financial institutions, banks.

12 The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13 As the Company is not a chit fund, nidhi, mutual benefit fund or society the provision of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

14 As the Company is not dealing or trading in shares, securities, debentures and other investments, the provision of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

15 The Company has given guarantees on behalf of its subsidiary during the year under review. In our opinion based on the information and explanations received, the terms and conditions of these guarantees are not prejudicial to the interest of the Company.

16 The term loans taken during the year are utilised for the purpose for which it was taken.

17 According to the information and explanations received the Company has not applied short-term borrowings for long-term use.

18 The Company has not made any preferential allotment of shares during the year.

19 The Company has not issued any debentures during the year.

20 The Company has not raised money by way of public issue during the year.

21. As per the information and explanation given to us no material fraud on or by the Company has been noticed during the year.

For SHAH & CO. Chartered Accountants FRN: 109430W

H. N. SHAH Partner M. No. 8152

Place : Mumbai Date : 11th May, 2011


Mar 31, 2010

We have audited the attached Balance Sheet of Morarjee Textiles Limited, (the Company) as at 31st March 2010, and also the profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These fnancial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these fnancial 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 fnancial statements. An audit also includes assessing the accounting principles used and signifcant estimates made by management, as well as evaluating the overall fnancial statement presentation. We believe that our audit provides a reasonable basis of our opinion.

As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, (‘the act) we enclose in the Annexure a statement on the matters specifed in paragraph 4 and 5 of the said order to the extent applicable.

Further to our comments in the Annexure referred to above, we state 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, profit and Loss Account and Cash Flow Statement referred in this report are in agreement with the books of account.

(d) In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet, the profit and Loss Account and Cash Flow Statement read with notes thereon dealt with by this report comply with the Accounting Standards referred to in Section 211(3C) of Companies Act, 1956.

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

(f) In our opinion, and to the best of our information and according to the explanations given to us, the said fnancial statements read with notes thereon, give the information required by the Act, in the prescribe manner 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 on 31st March 2010;

(ii) in the case of the profit and Loss Account, of the loss of the Company for the year ended on that date; and

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

AnnEXURE REFERRED TO In PARAGRAPH 3 OF THE AUDITORS REPORT TO THE MEMBERS OF MORARJEE TEXTILES LIMITED FOR THE yEAR EnDED 31ST MARCH, 2010.

1 (a) The Company has maintained reasonable records showing full particulars including quantitative details and location of the Fixed Assets.

(b) As informed, there is a regular programme of physical verifcation, which in our opinion is reasonable, having regard to the size of the Company and the nature of fixed assets. No material discrepancies have been noticed in respect of the assets physically verifed during the year.

(c) The Company has not disposed of substantial part of fixed assets during the year.

2 (a) According to the information and explanations given to us, inventory has been physically verifed by the management during or at the year end. In our opinion, the frequency of verifcation is reasonable having regard to the size of the Company and the nature of its business.

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

(c) The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verifcation between the physical stocks and the book records.

3. (a) The Company has not granted any loan during the year to the parties covered in the register maintained under sections 301 of the Companies Act, 1956.

In view of clause 4 (iii)(a) of the Companies (Auditors Report) Order, 2003, clause 4(iii)(b, c, & d) are not applicable to the company. (b) The Company has not accepted any loans, secured or unsecured, from the parties covered in the register maintained under section 301 of the Companies Act, 1956.

In view of clause 4 (iii)(e) of the Companies (Auditors Report) Order, 2003, clause 4(iii)(f & g) are not applicable to the company.

4. In our opinion, and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of stores, raw materials, plant & machinery, equipment & other assets and with regards to sale of goods and services. Further on the basis of our examination and according to the information and explanations given to us, there is no major weakness in the internal control procedures.

5. (a) In our opinion, and according to the information and explanations given to us, the particulars of all contracts and arrangements referred to in section 301 of the Companies Act, 1956 have been properly entered in the register maintained under section 301 of the Act. (b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 Lacs with any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. According to the information and explanations given to us, the Company has not accepted any deposits from public and hence provisions of clause 4 (vi) are not applicable to the Company.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

8. We are informed that the cost records are required to be maintained by the Company under section 209 (1) (d) of the Companies Act, 1956 for textile product of the Company. We have not reviewed the cost record maintained by the Company, but we are informed that the Company maintained the prescribed cost records.

9. (a) The Company is regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Service Tax, Wealth Tax, Custom Duty, Excise Duty, cess and other statutory dues with the appropriate authorities during the year. There are no undisputed statutory dues outstanding as on 31 March 2010 for the period of more than six month.

(b) According to the records of the Company and information and explanation given to us, there are following disputed dues on account Income Tax, Service Tax, Excise Duty, dues which have not been deposited with respective authorities.

Nature of Statute Nature of Dues Financial Year

Central Excise Act, 1944 Interpretation of Act 1976-1977 1979-80 to 1985-86

1990-91

1993-94 to 1995-1996

1999-2000 to 2008-09

Central Excise Act, 1944 Interpretation of Act 1990-91 to 1991-92

1995-96 to 2004-05 2007-08 to 2008-09

Central Excise Act, 1944 Interpretation of Act 1997-98 to 2001-02

Central Excise Act, 1944 Interpretation of Act 1981-1984

1998-99 to 2000-01

Income Tax Act, 1961 Penalty 2004-05

Income Tax Act, 1961

Nature of Statue Amount Forum where Rs. in Lacs Dispute is Pending

Central Excise Act, 1944 00.19 First Appeal 06.84 (Commissioner Level) 00.09

146.49

933.19

Central Excise Act, 1944 02.35 Second Appeal 346.30 (CESTAT)

61.93

Central Excise Act, 1944 03.19 High Court

296.14 Supreme Court 715.11

Central Excise Act, 1944 167.75 CIT Appeal

10 The Company has not incurred cash loss during the current year but has incurred cash loss during the immediately preceding fnancial year and the accumulated losses as at the end of fnancial year ended 31st March 2010 is less than 50% of the net worth of the company.

11 According to the information and explanation given to us The Company has not defaulted in repayment of dues to any fnancial institution or bank. Also Company does not have any debentures.

12 According to the information and explanation 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.

13 As the Company is not a chit fund, nidhi, mutual benefit fund or society the provision of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

14 As the Company is not dealing or trading in shares, securities, debentures and other investments, the provision of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

15 According to the information and explanation given to us, the Company has not given any guarantees during the year.

16 According to the information and explanation given to us, the term loans taken during the year are utilized for the purpose for which it was taken.

17 According to the information and explanations given to us and on overall examination of balance sheet of the Company we are of the opinion that funds raised on short term basis have not been used for long term investment.

18 The Company has not made any preferential allotment of shares during the year.

19 The Company has not issued any debentures during the year.

20 The Company has raised money by way of public issue (right issue) during the year. The management has disclosed on the end use of money raised by public issues (right issue) and the same has been verifed.

21. As per the information and explanation given to us no material fraud on or by the Company has been noticed during the year.

For SHAH & CO. Chartered Accountants

H. N. SHAH

Partner M. No. 8152

Mumbai: 22nd September, 2010

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