Mar 31, 2023
Raj Rayon Industries Limited
Report on the Audit of the Financial Statements
Qualified Opinion
We have audited the accompanying financial statements of Raj Rayon Industries Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flow for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid financial statements give the information required by the Companies Act, 2013 (the Act) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules, 2015, as amended, (âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2023, its loss, total comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Qualified Opinion
The Management is in the process to obtain details of four inoperative bank accounts which are continuing in the name of the Company from prior to the Corporate Insolvency Resolution Process when the current management was not in charge of the affairs of the Company. Accordingly, we are unable to comment on the impact, if any, on the financial statement arising out of subsequent availability of such pending bank statements.
The matter stated above was also the subject matter of qualification in the audit opinion of the predecessor auditor for year ended March 31, 2022.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Companies Act, 2013 (the Act). Our responsibilities under those Standards are further described in the Auditorâs Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Key Audit Matters |
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Sr. |
Key Audit Matter |
Auditorâs Response |
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No. |
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1. |
Capitalisation and useful life of Property, plant & eauipment : |
Our audit procedures included and |
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Significant judgment and estimates are |
were not limited to the following:- |
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involved with respect to the following matters of Property, plant & equipment:- |
- Assessed the design and operating |
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a) During the year ended March 31, |
effectiveness of the controls with |
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2023, the Company has incurred capital |
respect to capital expenditure |
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expenditure classified under capital work |
incurred and classified under |
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in progress. Assets in the course of construction are classified under capital |
capital work in progress. |
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work in progress and are capitalised |
- Assessed the nature of the |
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under appropriate category of Property, |
additions made to Property, Plant |
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Plant and Equipment when an asset is |
and Equipment, and Capital work- |
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operating at managementâs intended |
in-progress on a test check basis |
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use. Judgement is involved to determine |
to test whether they meet the |
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that the aforesaid capitalisation meet |
recognition criteria as set out Ind |
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the recognition requirement under Ind |
AS 16 - Property, Plant and |
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AS including determination of whether the criteria for intended use of the |
Equipment. |
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management has been met. |
- Reviewed the management |
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assessment and re-assessment of |
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b) Re-assessment of estimated useful |
estimated useful lives of Property, |
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lives used for determination of |
Plant and Equipment, and |
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depreciation of Property, plant & |
recoverability of their carrying |
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equipment, recoverability of their |
values with respect to anticipated |
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carrying values involves assumptions used for such technical assessment, consideration of historical experience and anticipated future risks. |
future risks. |
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Accordingly, the above matters relating to Property, Plant and Equipment have been considered as a key audit matter. |
Information Other than the Financial Statements and Auditorâs report thereon
The Companyâs Board of Directors are responsible for the preparation of other information. The Other information comprises the information included in the Management Discussion and Analysis, Boardâs Report including Annexures to the Board report, Business responsibility Report, Corporate Governance report and Shareholderâs information, but does not include the financial statement and our auditorâs report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and those charged with Governance for the Financial Statements
The accompanying financial statements have been approved by the Companyâs Board of Directors. The Companyâs Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the INDAS specified under Section 133 of the Act and other accounting principles generally acceptable in India.
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, 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.
In preparing the financial statements, the Management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial control system in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.
⢠Conclude on the appropriateness of the Managementâs 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 Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements that individually or in aggregate makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope pf our audit work and in evaluating the results of our work and (ii) to evaluate the effect of ant identified misstatements in the financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
|Other Matter:
The financial statements of the Company for the year ended March 31, 2022 were audited by the predecessor auditor; whose report dated May 30, 2022 expressed a qualified opinion on those statements.
Our opinion is not modified in respect of the matter specified in âOther Matterâ paragraph above.
Report on Other Legal and Regulatory Requirements
1. Pursuant to the Companies (Auditor''s Report) Order, 2020 ("the Order" "CARO"), issued by
the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we
give in the Annexure âAâ 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 except for the matter described in the âBasis for Qualified Opinionâ, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
(b) Except for the matters described in the âBasis for Qualified Opinionâ paragraphs above, 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 and records.
(c) The Balance sheet, the Statement of Profit & Loss (including other comprehensive income), Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.
(d) Except for the matters described in the âBasis for Qualified Opinionâ paragraphs above, in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules, 2015.
(e) On the basis of the written representation received from the directors as on March 31, 2023 taken on records by the Board of Directors, none of the directors are disqualified as on March 31, 2023 from being appointed as a Directors in terms of Section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure âBâ.
(g) With respect to the other matters to be included in the Auditorâs Report in accordance with the requirements of Section 197(16) of the Act, in our opinion and to the best of our information and according to the explanations given to us, the Company has not paid remuneration to its directors during the year.
(h) With respect to the matters to be included in the Auditorâs report in accordance with the
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 does not have any pending litigation which would impact its financial position.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred if any, to the Investor Education and Protection Fund by the Company.
iv. (a) The management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(b) The management has represented, that, to the best of its knowledge and belief, no funds have been received by the Company from any person or entity, including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(c) Based on such audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representation under sub clause (i) and (ii) of Rule 11(e) of The Companies (Audit and Auditors) Rules, 2014, as provided under (a) and (b) above, contains any material misstatement.
v. The Company has not declared or paid any dividend during the year ended March 31, 2023 and hence reporting compliance of Section 123 of the Act is not applicable.
For Bagaria & Co. LLP
Chartered Accountants
(Firm Registration No.113447W/W-100019)
Arun Bagaria
Partner
Membership No. 036732
UDIN: 23036732BGQBKD2488
Place: Mumbai
Date: May 27, 2023
Mar 31, 2015
We have audited the accompanying financial statements of Raj Rayon
Industries Limited ("the Company"), which comprise the Balance Sheet as
at 31st March 2015, the Statement of Profit and Loss 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 Board of Director is responsible for the matters stated
in Section 134 (5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these financial statements that give a true and
fair view of the financial position and financial performance of the
Company in accordance with the accounting principles generally accepted
in India, including the Accounting Standards specified under section
133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,
2014. This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act for
safeguarding of the assets of the Company and for preventing and
detecting frauds and other irregularities; selection and application of
appropriate accounting policies; making judgments and estimates that
are reasonable and prudent; and design, implementation and maintenance
of adequate internal financial control, 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.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the Audit Report under the Provisions of the Act and the Rules made
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 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 financial control
relevant to the Company's preparation of the financial statements that
give a true and fair view in order to design and 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 control system over financial reporting and the operating
effectiveness of such controls. An audit also include 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 financial
statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India, of the state of affairs of the Company as
at 31st March, 2015, its Loss for the year ended on that date, and cash
flow statement for year ended on that date.
Emphasis of Matter
We draw attention to Note 2 of the accompanying financial statements in
respect of contingency related to compensation payable in lieu of bank
sacrifice, the outcome of which is materially uncertain and cannot be
determined currently. Our opinion is not qualified in respect of this
matter.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order, 2015("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Companies Act, 2013, we give in
the Annexure a statement on the matters specified in paragraphs 3 and 4
of the Order, to the extent applicable.
As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books.
(c) The Balance Sheet and Statement of Profit and Loss dealt with by
this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the directors are disqualified as on 31st March,
2015 from being appointed as a director in terms of section 164 (2) of
the Act.
(f) The Company has adequate internal financial control and in our
opinion the same is operating effectively.
(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 explanation given to us :
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements.
ii. The Company did not have any long term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
company.
ANNEXURE REFERRED TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1 under the heading of 'Report on Other Legal
and Regulatory Requirements' section of our report of even date)
(i) a. In our opinion,the Company has maintained proper records showing
full particulars, including quantitative details and situation of its
fixed assets.
b. As explained to us, the fixed assets have been physically verified
by the management according to a programme of verification which in our
opinion is reasonable having regard to the size of the Company and the
nature of its assets. No material discrepancies with respect to book
records were noticed on such verification.
(ii) a. As explained to us, physical verification of inventory has been
conducted by the management at reasonable intervals. In our opinion
frequency of verification is reasonable;
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 business.
c. On the basis of our examination of the records of inventory, we are
of the opinion that the Company is maintaining proper records of
inventory. Discrepancies noticed on verification of inventory as
compared to book records were not material and these have been properly
dealt with in books of accounts.
(iii) The Company has not granted any Unsecured Loan to Companies as
covered in the register maintained under section 189 of the Companies
Act, 2013.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and for sale of goods and
services. During the course of our audit, we have not observed any
continuing failure to correct major weakness in the internal control
systems.
(v) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposit within the
meaning of section 73 to 76 of the Companies Act, 2013, and the rules
framed there under.
(vi) We have broadly reviewed the cost records maintained by the
Company in respect of products, pursuant to the rules made by the
Central Government, the maintenance of Cost records have been
prescribed under section 148 (1) of the Companies Act, 2013 and are of
the opinion that prima facie the prescribed accounts and records have
been made and maintained. We have, however, not made a detailed
examination of the cost records with a view to determine whether they
are accurate or complete.
(vii) a. According to the records of the Company and the information
and explanations given to us, the company is regular in depositing with
appropriate authorities undisputed statutory dues including Provident
Fund, Employee's State Insurance, Income Tax, Sales Tax, Wealth Tax,
Service Tax, Custom Duty, Excise duty, Value Added Tax, Cess and other
statutory dues to the extent applicable to it. There are no undisputed
statutory dues as referred to above as at 31st March, 2015 outstanding
for a period of more than six months from the date they become payable.
b. The disputed statutory dues that have not been deposited on account
of matters pending before the appropriate authority are as under -
Name of Nature of the Amount Rs. in Lacs
the Statute Dues (Excluding penalties
and interest, if any)
Central Excise Duty 23.89
Excise
Duty 32.09
38.30
25.82
7.40
127.50
0.09#
2.95
3.35
2.84#
70.87
190.07
187.08
332.04
Textile Cess 0.35
Committee
Act 0.88
2.13
3.10
1.37 7.82
Income Tax Income Tax 25.47
Act
Gujarat Tax Entry tax 558.83
on Entry of
Specified
Goods into
Local Area
Act, 2001
Name of the Period to Forum where dispute is pending
Statute which the
amount relate
Central 1995-1996
Excise
Duty 1996-1997
1997-1998
1998-1999
1999-2000 Additional Directorate of Anti
Evasion.
1999-2000 The Company is in the process of
refund.
2003-2004 Appellate Tribunal of Central
Excise.
2003-2004 The Company has filed reply to
& show Cause Notice received from
2004-2005 Superintendent of Central Excise.
2003-2004 The Company has filed the Appeal
in the Customs, Excise & Service
Tax Appellate Tribunal, Ahmedabad.
2005-2006 The Company has filed the reply to
& Show cause notice received from
2006-2007 the Commissioner of Central
Excise & Custom, Vapi.
2006-2007 The Company has filed the reply to
& Show cause notice received from
2007-2008 the office of the Commissioner of
Central Excise & Custom, Vapi.
2007-2008 The Company has filed the reply to
Show cause notice received from
the Commissioner of Central Excise
& Custom, Vapi.
2009-2010 The Company has filed Appeal &
Stay application with Custom
Excise & Service Tax Appellate
Tribunal, Ahmedabad.
Textile Cess 1997-1998 Textile Cess Appellate Tribunal.
Committee
Act 1998-1999
1999-2000
2000-2001
2001-2002
Income Tax 2004-2005* Application for giving effect to
Act the order of CIT (A) is pending
before the Assessing Officer. The
Appeal was decided in favour of
the Company.
Gujarat Tax 01.04.2012 The Company has filed reply to the
on Entry of to Show Cause Notice issued by the
Specified 31.01.2014 Commercial Tax Officer,Ahmedabad.
Goods into
Local Area
Act, 2001
# Payment made under protest
* Assessment year
c) The amount required to be transferred to Investor Education and
Protection Fund in accordance with the relevant provisions of The
Companies Act, 1956 (1 of 1956) and rules made there under has been
transferred to such fund with in time
(viii) The accumulated losses of the Company at the end of the
financial year are more than fifty per cent of its net worth. The
Company has accumulated losses at the end of the financial year in the
statement of Profit & Loss. It has incurred cash losses in the current
financial year covered by the Audit and also incurred in immediately
preceding financial year.
(ix) Based on our audit procedures and accordingly to the information
and explanation given by the management, we are of the opinion that the
company has generally not defaulted in repayment of dues to bank /
financial institution except delay in making payment towards interest
and principal.
(x) According to the information and explanations given to us the
company has not given any guarantee for loans taken by others from bank
or financial institutions.
(xi) In our opinion and as per the information and explanations given
to us, the term loans have been applied for the purpose for which they
were obtained.
(xii) Based on the audit procedure performed and information and
explanations given to us by the management, we report that no fraud on
or by the Company has been noticed or reported during the course of our
audit.
For K. M. Garg & Co.
Chartered Accountants
(FRN - 120712W)
Sd/-
(CA. K K Garg)
Place: Mumbai Partner
Date: 30th May, 2015 M No. 033940
Mar 31, 2014
We have audited the accompanying financial statements of Raj Rayon
Industries Limited ("the Company"), which comprise the Balance Sheet as
at 31st 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 notified under 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 aforesaid financial statements give the
information required by the Act in the manner so required and give a
true and fair view in conformity with the accounting principles
generally accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2014;
b) in the case of the Statement of Profit and Loss, of the Loss of the
Company for the year ended on that date, and
c) in the case of the Cash Flow Statement, of the cash flows of the
Company for the year ended on that date.
Emphasis of Matter
We draw attention to Note 2 of the accompanying financial statements in
respect of contingency related to compensation payable in lieu of bank
sacrifice, the outcome of which is materially uncertain and cannot be
determined currently. Our opinion is not qualified in respect of this
matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2003("the
Order") issued by the Central Government of India in terms of
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
notified under the Companies 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; and.
(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, 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 Companies Act, 1956.
ANNEXURE REFERRED TO INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 1 under the heading of "Report on other
Legal and Regulatory Requirements" of our report of even date)
(i) In respect of its fixed assets -
a. The company has maintained proper records showing full particulars,
including quantitative details and situation of its fixed assets on the
basis of available information.
b. As explained to us, all the fixed assets have been physically
verified by the management in a phased periodical manner, which in our
opinion is reasonable, having regard to the size of the Company and the
nature of its assets. No material discrepancies were noticed on such
physical verification.
c. In our opinion, the company has not disposed off a substantial part
of its fixed assets during the year and the going concern status of the
Company is not affected.
(ii) In respect of its inventories -
a. The inventories have been physically verified during the year by the
management. In our opinion the frequency of verification is reasonable.
b. In our opinion and according to the information and explanations
provided 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 nature of its business.
c. In our opinion, the company has maintained proper records of
inventory. As explained to us, there were no material discrepancies
noticed on physical verification of inventories as Compared to the book
records.
(iii) In respect of loans, secured or unsecured, granted or taken by
the Company to / from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956 -
The Company has neither granted nor taken any loans, secured or
unsecured, to/from companies, firms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fixed assets and for sale of goods / services.
During the course of our audit, no major weakness has been noticed in
the internal control.
(v) In respect of transactions entered in the register maintained in
pursuance of Section 301 of the Companies Act, 1956 -
a. To the best of our knowledge and belief and according to the
information and explanations provided by the management, we are of the
opinion that the transactions that need to be entered into the register
have been so entered.
b. According to the information and explanations given to us, where
each of such transactions, if any, exceeding during the year by rupees
five lakhs in respect of each party, have been made at prices which are
prima facie reasonable having regard to the prevailing market prices at
the relevant time.
(vi) As per the information and explanations to us, the company has not
raised any deposit during the year, which attracts the provisions of
Section 58A and 58AA of the Companies Act, 1956 and the rules framed
thereunder and the directives issued by the Reserve Bank of India.
(vii) In our opinion, the company has an internal audit system, which
is commensurate with the size of the Company and the nature of its
business.
(viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central Government under Section 209 (1) (d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
(ix) In respect of Statutory dues -
a) According to the records of the Company and the in- formation and
explanations given to us, the company is generally regular in
depositing with appropriate authori- ties undisputed amount of
statutory dues including Prov- ident Fund, Investor Education and
Protection Fund, Em- ployees'' State Insurance, Income Tax, Sales tax,
Wealth Tax, Service Tax, Custom Duty, Excise duty, Cess, and other
statutory dues to the extent applicable to it and no undisputed amounts
payable were outstanding as at 31st March, 2014 for a period of more
than six months from the date they become payable.
b) The disputed statutory dues that have not been deposited on account
of disputed matters pending before appropriate authorities are as under
Name of the Statute Nature of Dues Amount in Rs in Lacs
Excluding penalities and
Interest if any
Central Excise duty Excise Duty 32.09
38.30
25.82
7.40
127.50
0.09
2.95
3.35
2.84
70.87
190.07
187.08
332.04
Textile Committees Cess 0.35
Act
0.88
2.13
3.10
1.37
7.82
Income Tax Act Income Tax 25.47
Gujarat Tax on Entry Entry tax 558.83
of Specified Goods
into Local Area
Act, 2001
Name of the Statute Period to which the Forum where dispute is
amount relate pending
Central Excise Duty 1995-1996
1996-1997
1997-1998
1998-1999
1999-2000 Additional Directorate
of Anti Evasion
1999-2000 The Company is in the
process of refund
2003-2004 Appellate Tribunal of
Central Excise
2003-2004 The Company has filed
2004-2005 reply to show Cause
Notice received from
Superintendent of Central
Excise
2003-2004 The Company has fi led
the Appeal in the Customs,
Excise & Service Tax
Appellate Tribunal,
Ahmedabad
2005-2006 The Company hass filed the
2006-2007 reply to Show cause notice
received from the
Commissioner of Central
Excise & Custom, Vapi
2006-2007 The Company has filed the
2007-2008 reply to Show cause notice
received from the office
of the Commissioner of
Central Excise & Custom,
Vapi
2007-2008 The Company has fi led the
reply to Show cause notice
received from the
Commissioner of Central
Excise & Custom, Vapi
2009-2010 The Company has filed
Appeal & Stay application
with Custom Excise &
Service Tax Appellate
Tribunal, Ahmedabad
1997-1998 Textile Cess Appellate
1998-1999 Tribunal
1999-2000
2000-2001
2001-2002
2004-2005 Application for giving
effect to the order of CIT
(A) is pending before the
Assessing Officer.
The Appeal was decided in
favour of the Company
01.04.2012 The Company is to in the
Process
31.01.2014 of filing reply to the Show
Cause Notice issued by the
Commercial Tax Officer,
Ahmedabad.
(x) The Company has accumulated losses at the end of the financial year
in the Statement of Profit & Loss. The Company has incurred cash losses
during the financial year covered by the Audit but not incurred the
cash losses in immediately preceding financial year.
(xi) Based on our audit procedures and according to the information and
explanation given to us, the Company has defaulted in repayment of dues
to banks in respect of Term Loans, Letter of Credit, Working capital
Facilities,
Interest Liabilities etc. The CDR Proposal of the Company has been
approved by the CDR Empowered Group and a Master Restructuring
Agreement was entered into which made good all defaults during the year
to Banks.
(xii) In our opinion and according to the explanations given to us and
based on the information available, the Company has not granted any
loans and advances on the basis of security by way of pledge of shares,
debentures and other securities.
(xiii) In our opinion, the company is not a chit/ nidhi/ mutual benefit
fund/ society. Therefore provisions of clause (xiii) of paragraph 4 of
the Order are not applicable to the Company.
(xiv) The Company has maintained proper records of the transactions and
Contracts in respect of dealing or trading in shares, securities,
debentures and other investments and timely entries have been made
therein. All shares, securities, debentures and other investments have
been held by the company in its own name.
(xv) According to the information and explanations given to us the
company has not given any guarantee for loans taken by others from bank
or financial institutions.
(xvi) On the basis of records examined by us, and relying on the
information compiled by the Company for Co-relating the funds raised to
the end use of the term loans, we have to state that, the Company has,
prima-facie, applied the term loans for the purposes for which they
were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that the Company has used funds raised on short-term basis in the form
of working capital and working capital loans for long-term purposes to
fund losses incurred during the year.
(xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
covered in the Register maintained under Section 301 of the Companies
Act, 1956.
(xix) According to the information and explanations given and the
records examined by us, the Company has not issued any debentures.
(xx) The company has not raised any money by public issue during the
year.
(xxi) Based on the audit procedure performed and information and
explanations given to us by the management, we report that no fraud on
or by the Company has been noticed or reported during the course of our
audit.
For K. M. Garg & Co.
Chartered Accountants
(FRN - 120712W)
SD/-
(CA. K. K. Garg)
Partner
M No. 033940
Mumbai, May 30, 2014
Mar 31, 2013
We have audited the accompanying fnancial statements of Raj Rayon
Industries 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
accountng policies and other explanatory informaton.
Management''s Responsibility for the Financial Statements
The Company''s Management is responsible for the preparaton of these
fnancial statements that give a true and fair view of the fnancial
positon, fnancial performance and cash fows of the Company in
accordance with the accountng principles generally accepted in India
including Accountng Standards referred to in sub-secton (3C) of secton
211 of the Companies Act, 1956 ("the Act"). This responsibility
includes the design, implementaton and maintenance of internal control
relevant to the preparaton and presentaton 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 Auditng issued by the Insttute 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 preparaton and fair presentaton of the fnancial statements in
order to design audit procedures that are appropriate in the
circumstances. An audit also includes evaluatng the appropriateness of
accountng policies used and the reasonableness of the accountng
estmates made by the Management, as well as evaluatng the overall
presentaton of the fnancial statements.
We believe that the audit evidence we have obtained is sufcient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our informaton and according to the
explanatons given to us, the aforesaid fnancial statements give the
informaton required by the Act in the manner so required and give a
true and fair view in conformity with the accountng principles
generally accepted in India:
a) in the case of the Balance Sheet, of the state of afairs 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-secton (4A) of secton 227 of the Act, we give in the Annexure a
statement on the maters specifed in paragraphs 4 and 5 of the Order.
2. As required by Secton 227(3) of the Act, we report that:
(a) We have obtained all the informaton and explanatons 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 examinaton 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 Accountng Standards referred to
in sub-secton (3C) of secton 211 of the Act, except AS Â 28 as referred
to in note no. 30(i)(h) for non provision for doubtul debts, the proft
for the year and also surplus in statement of Proft & Loss would have
been lower by Rs. 88,60,803/-.
(e) On the basis of the writen representatons 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-secton
(1) of secton 274 of the Act.
ANNEXURE REFERRED TO INDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 1 under the heading of "Report on other Legal
and Regulatory Requirements" of our report of even date)
(i) In respect of its fxed assets Â
a. The company has maintained proper records showing full partculars,
including quanttatve details and situaton of its fxed assets on the
basis of available informaton.
b. As explained to us, all the fxed assets have been physically
verifed by the management in a phased periodical manner, which in our
opinion is reasonable, having regard to the size of the Company and the
nature of its assets. No material discrepancies were notced on such
physical verifcaton.
c. In our opinion, the company has not disposed of a substantal part
of its fxed assets during the year and the going concern status of the
Company is not afected.
(ii) In respect of its inventories Â
a. The inventories have been physically verifed during the year by the
management. In our opinion the frequency of verifcaton is reasonable.
b. In our opinion and according to the informaton and explanatons
provided to us, the procedures of physical verifcaton of inventories
followed by the management are reasonable and adequate in relaton to
the size of the company and nature of its business.
c. In our opinion, the company has maintained proper records of
inventory. As explained to us, there were no material discrepancies
notced on physical verifcaton of inventories as Compared to the book
records.
(iii) In respect of loans, secured or unsecured, granted or taken by
the Company to / from companies, frms or other partes covered in the
register maintained under Secton 301 of the Companies Act, 1956 Â
a. The Company has not granted any loans, secured / unsecured to
Companies, frms or other partes covered in the register maintained
under secton 301 of the Act; therefore clause 4 (iii) (b) to (d) are
not applicable to the Company.
b. During the year the company has taken interest free loan from one
party covered in the register maintained under secton 301 of the
Companies Act, 1956. In respect of the said loans, the maximum amount
outstanding at any tme during the year was Rs. 786.00 Lacs and the Year
end outstanding balance is Rs. Nil.
c. In our opinion and according to the informaton and explanaton given
to us, the rate of interest, wherever applicable, and other terms and
conditons on which the loans have been taken are taken from the bodies
corporate listed in the register maintained under secton 301 of the Act
are not prima-facie prejudicial to the interest of the Company.
d. As per the informaton and explanaton given to us, the Loans are
repayable over a period of three years and accordingly regularity of
repayment is not applicable and interest on the aforesaid loans were
regular.
(iv) In our opinion and according to the informaton and explanatons
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fxed assets and for sale of goods / services.
During the course of our audit, no major weakness has been notced in
the internal control.
(v) In respect of transactons entered in the register maintained in
pursuance of secton 301 of the Companies Act, 1956 Â
a. To the best of our knowledge and belief and according to the
informaton and explanatons provided by the management, we are of the
opinion that the transactons that need to be entered into the register
have been so entered.
b. According to the informaton and explanatons given to us, where each
of such transactons, if any, exceeding during the year by rupees fve
lakhs in respect of each party, have been made at prices which are
prima facie reasonable having regard to the prevailing market prices at
the relevant tme.
(vi) As per the informaton and explanatons to us, the company has not
raised any deposit during the year, which atracts the provisions of
secton 58A and 58AA of the Companies Act, 1956 and the rules framed
thereunder and the directves issued by the Reserve Bank of India.
(vii) In our opinion, the company has an internal audit system, which
is commensurate with the size of the Company and the nature of its
business.
(viii) We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accountng Records) Rules, 2011
prescribed by the Central Government under secton 209 (1) (d) of the
Companies Act, 1956 and are of the opinion that prima facie the
prescribed cost records have been maintained. We have, however, not
made a detailed examinaton of the cost records with a view to determine
whether they are accurate or complete.
(ix) In respect of Statutory dues -
a) According to the records of the Company and the informaton and
explanatons given to us, the company is generally regular in depositng
with appropriate authorites undisputed amount of statutory dues
including Provident Fund, Investor Educaton and Protecton Fund,
Employees'' State Insurance, Income Tax, Sales tax, Wealth Tax, Service
Tax, Custom Duty, Excise duty, Cess, and other statutory dues to the
extent applicable to it and no undisputed amounts payable were
outstanding as at 31st March, 2013 for a period of more than six months
from the date they become payable.
b) The disputed statutory dues that have not been deposited on account
of disputed maters pending before appropriate authorites are as under Â
Name of the Nature Amount in Rs. Period to
Statute of the (excluding penaltes and which the
dues interest, if any) amount
relates
Central
Excise Excise 23,88,909 1995-1996
Act Duty
32,08,844 1996-1997
38,29,886 1997-1998
25,82,445 1998-1999
7,40,129 1999-2000
1,27,50,213
8,500# 1999-2000
2,95,032 2003-2004
3,35,298 2003-2004
&
2004-2005
2,83,594# 2003-2004
70,86,992 2005-2006
&
2006-2007
1,90,06,648 2006-2007
&
2007-2008
1,87,08,431 2007-2008
3,32,03,541 2009-2010
Textile Cess 34,715 1997-1998
Commitee
Act 87,643 1998-1999
2,12,521 1999-2000
3,09,818 2000-2001
1,37,459 2001-2002
7, 82,156
Income Tax Income 25,46,695 2004-2005*
Act tax
Name of the Forum where dispute is
Statute pending
Central Excise
Act
Additonal Directorate of
Ant Evasion
The Company is in the
process of refund
Appellate Tribunal of
Central Excise
The Company has fled
reply to show Cause
Notice received from
Superintendent of Central
Excise
The Company has
fled the Appeal in the
Customs, Excise & Service
Tax Appellate Tribunal,
Ahmedabad
The Company has fled
the reply to Show cause
notice received from the
Commissioner of Central
Excise & Custom, Vapi
The Company has fled the
reply to Show cause notce
received from the ofce
of the Commissioner of
Central Excise & Custom,
Vapi
The Company has fled
the reply to Show cause
notice received from the
Commissioner of Central
Excise & Custom, Vapi
The Company has fled
Appeal & Stay applicaton
with Custom Excise &
Service Tax Appellate
Tribunal, Ahmedabad
Textile Textile Cess Appellate
Committee Tribunal
Act
Income Tax Applicaton for giving
Act effect to the order of CIT
(A) is pending before the
Assessing Ofcer. The
Appeal was decided in
favour of the Company
# Payment made under protest
* Assessment year
(x) The Company does not have accumulated losses at the end of the
fnancial year. The Company has incurred cash losses during the fnancial
year covered by the Audit and in immediately preceding fnancial year.
(xi) Based on our audit procedures and according to the informaton and
explanaton given to us, we are of the opinion that the Company has not
defaulted in repayment of dues to fnancial insttutons & banks.
(xii) In our opinion and according to the explanatons given to us and
based on the informaton available, the Company has not granted any
loans and advances on the basis of security by way of pledge of shares,
debentures and other securites.
(xiii) In our opinion, the company is not a chit/ nidhi/ mutual beneft
fund/ society. Therefore provisions of clause (xiii) of paragraph 4 of
the Order are not applicable to the Company.
(xiv) The Company has maintained proper records of the transactons and
Contracts in respect of dealing or trading in shares, securites,
debentures and other investments and tmely entries have been made
therein. All shares, securites, debentures and other investments have
been held by the company in its own name.
(xv) According to the informaton and explanatons given to us the
company has not given any guarantee for loans taken by others from bank
or fnancial insttutons.
(xvi) On the basis of records examined by us, and relying on the
informaton compiled by the Company for Co-relatng the funds raised to
the end use of the term loans, we have to state that, the Company has ,
prima-facie, applied the term loans for the purposes for which they
were obtained.
(xvii) According to the records examined by us and according to
informaton and explanatons given to us, on an over all basis, funds
raised on short term basis have prima facie, not been used during the
year for long term investment and vice versa, other than temporary
deployment.
(xviii) The company has during the year, consequent upon conversion of
share warrants issued in earlier year, made preferental allotment of
equity shares, to a company covered in the register maintained under
secton 301 of the Act, as per SEBI guidelines.
(xix) According to the informaton and explanatons given and the records
examined by us, the Company has not issued any debentures.
(xx) The company has not raised any money by public issue during the
year.
(xxi) Based on the audit procedure performed and informaton and
explanatons given to us by the management, we report that no fraud on
or by the Company has been notced or reported during the course of our
audit.
For K. M. Garg & Co.
Chartered Accountants
(FRN Â 120712W)
(CA. K K Garg)
Partner
M. No. 033940
Mumbai, July 31, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of RAJ RAYON INDUSTRIES
LIMITED (hereinafter referred to as 'the company') as at 31st March,
2012, the Statement of Profit and Loss and the Cash Flow Statement for
the year ended on that date, annexed thereto. These financial
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles and significant estimates made by
the management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003,
(hereinafter referred to as 'the CARO 2003') issued by the Central
Government of India in terms of section 227(4A) of the Companies Act,
1956, (hereinafter referred to as 'the Act') we enclose in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the said
order.
4. Further to our comments in the Annexure referred to above, we
report that:
(i) we have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(ii) in our opinion, proper books of account as required by law, have
been kept by the company so far as appears from our examination of
those books;
(iii) the Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) in our opinion, the Balance Sheet, Statement of Profit and Loss
and Cash Flow Statement dealt with by this report comply with the
Accounting Standards ('AS') referred to in sub-section (3-C) of section
211 of the Act, except, AS-28 as referred to in note no. 27 (i) (h) for
non provision of doubtful debts for recovery of which the company has
filed legal suits amounting to Rs. 88,60,803/-;
(v) we, further report that, had the company made the respective
provision for doubtful debts, the profit for the year and also surplus
in Statement of Profit and Loss would have been lower by Rs. 88,60,803/-;
(vi) based on the written representation received from the directors as
at 31st March, 2012 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as at 31st March,
2012 from being appointed as a director in terms of section 274 (1) (g)
of the Act;
(vii) in our opinion and to the best of our information and according
to the explanations given to us, the said accounts read together with
Significant Accounting Policies and notes on 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 Balance Sheet, of the state of affairs of the company
as at 31st March, 2012;
b) in the case of Statement of Profit and Loss, of the profit for the
year ended on that date; and
c) in the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
Referred to in paragraph 3 of our report of even date
On the basis of such checks as we considered appropriate and in terms
of the information and explanations given to us, we report that:
(i) (a) the company has generally maintained proper records showing
particulars, including quantitative details and situation of fixed
assets;
(b) as explained to us, major portion of the fixed assets has been
physically verified by management during the year at reasonable
intervals. No material discrepancies were noticed on such verification;
and
(c) during the year the company has not disposed off a substantial part
of its fixed assets and the going concern status of the company is not
affected;
(ii) (a) as explained to us, inventories have been physically verified
during the year by the management. In our opinion, the frequency of
verification is reasonable;
(b) the procedures, explained to us, that followed by the management
for physical verification of inventories, are, in our opinion,
reasonable and adequate in relation to the size of the company and the
nature of its business; and
(c) on the basis of examination of the inventory records of the
company, we are of the opinion that the company is maintaining proper
records of inventory. No material discrepancies have been noticed on
physical verification of inventory as compared to book records;
(iii) (a) the company has not granted, during the year, secured or
unsecured loans to companies, firms or other parties covered in the
register maintained under section 301 of the Act; therefore provisions
of clause 4(iii) (a) to (d) of the CARO, 2003 are not applicable to the
company; and
(b) the company has taken unsecured loans from the companies covered in
the register maintained under section 301 of the Act. The maximum
amount involved during the year was Rs. 95600000 and year-end balance was
Rs. 78600000 from a company;
(c) in our opinion, the rate of interest, wherever applicable, and
other terms and conditions on which the loans have been taken from the
bodies corporate listed in the register maintained under section 301 of
the Act are not prima-facie prejudicial to the interest of the company;
and
(d) since the aforesaid loans, as informed to us, are repayable on
demand, the payment of principal amount and interest on the aforesaid
loans were regular;
(iv) in our opinion , there are generally adequate internal control
procedures commensurate with the size of the company and the nature of
its business, with regard to purchase of inventory and fixed assets and
sale of goods and services. During the course of audit, no major
weakness in internal control, has been noticed;
(v) (a) to the best of our knowledge and belief and representations
given to us, we are of the opinion that the particulars of contracts or
arrangements, referred to in section 301 of the Act have been entered
in the register maintained under section 301 of the Act; and
(b) in our opinion the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Act exceeding the value of Rs. 500000 in respect of any party during
the year have been made at prices which are reasonable having regard to
prevailing market prices at the relevant time where such market prices
are available;
(vi) in our opinion , the company has not accepted any deposit from the
public;
(vii) in our opinion, the company has an internal audit system
commensurate with its size and nature of its business;
(viii) we have broadly reviewed the books of accounts maintained by the
company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209 (1) (d) of the Act and
are of the opinion that prima facie the prescribed records have been
made and maintained. We have not, however, carried out detailed
examination of same;
(ix) (a) the company is generally regular in depositing with the
appropriate authorities undisputed statutory dues including Provident
Fund, Employees' State Insurance, income-tax, sales-tax, wealth tax,
service tax, custom duty, excise euty, cess and other material
statutory dues applicable to it. There were no arrears as at 31st
March, 2012 for a period of more than six months from the date they
became payable; and
(b) the disputed statutory dues in respect of income tax, sales tax,
wealth tax, service tax, custom duty, excise duty and cess that have
not been deposited with the appropriate authorities on account of
dispute and the forum where the disputes are pending are as under:-
Name of the Nature Amount in Rs.
Statute of the (excluding penalties and
dues interest, if any)
Central Excise Excise 23,88,909
Act Duty
32,08,844
38,29,886
25,82,445
7,40,129
1,27,50,213
8,500#
2,95,032
3,35,298
2,83,594#
70,86,992
1,90,06,648
1,87,08,431
3,32,03,541
Textile Cess 34,715
Committee
Act 87,643
2, 12,521
3, 09,818
1, 37,459
7, 82,156
Income Tax Income 25,46,695
Act tax
Name of the
Statute Period to Forum where dispute is
which the pending
amount relates
Central Excise Act 1995-1996
1996-1997
1997-1998
1998-1999
1999-2000
Additional Directorate General
of Anti-Evasion.
1999-2000 The Company is in process of
getting refund.
2003-2004 Appellate Tribunal of Central
Excise.
2003-2004 The company has filed
& reply to show cause notice
2004-2005 to Superintendent of Central
Excise.
2003-2004 The Company has filed appeal
in the Customs, Excise &
Service Tax Appellate
Tribunal, Ahmedabad.
2005-2006 The company has filed
& reply to Show Cause
2006-2007 Notice received from
Commissioner of Central
Excise & Customs, Vapi.
2006-2007 The Company has filed
& reply to show cause notice
2007-2008 received from the Office of
the Commissioner, Central
Excise & Customs, Vapi.
2007-2008 The company has filed reply
to Show Cause Notice received
from Commissioner Central
Excise & Customs, Vapi.
2009-2010 The company is in the process
of replying to Show Cause
Notice received from
Commissioner Central Excise &
Customs, Vapi.
Textile Committee
Act 1997-1998
1998-1999
1999-2000
2000-2001
2001-2002
Textiles Cess Appellate
Tribunal
Income Tax Act 2004-2205* Application for giving effect
to the order of CIT(A) is
pending before the Assessing
Officer. The appeal was decided
in favour of the company.
(x) the company has neither accumulated losses at the end of the
financial year nor has it incurred cash losses, both, in the financial
year under report and in the immediately preceding financial year;
(xi) according to the records examined by us, the company has not
defaulted in repayment of dues to the banks. There are no dues to a
financial institution or debenture holders;
(xii) as explained to us, the company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities;
(xiii) the company is not a chit fund or a nidhi mutual benefit fund/
society. Therefore, the provisions of clause 4(xiii) of the CARO, 2003
are not applicable to the company;
(xiv) the company has dealt or traded in shares, securities, debentures
and other investments. The company has maintained proper records and
made timely entries of such transactions and contracts. The company in
its own name holds all the shares, securities and other investments;
(xv) the company has not given any guarantee for loans taken by others
from banks or financial institutions;
(xvi) on the basis of the records examined by us, and relying on the
information compiled by the company for co-relating the funds raised to
the end use of the term loans, we have to state that, the company has,
prima-facie, applied the term loan for the purpose for which they were
obtained;
(xvii) on an overall examination of the financial statements of the
company, we are of the opinion that, no funds raised on short-term
basis have prima facie been used for long-term purposes;
(xviii) the company has, during the year, consequent upon conversion of
share warrants issued in earlier year, made preferential allotment of
equity shares, to a company covered in the register maintained under
section 301 of the Act, as per SEBI Guidelines. Therefore, the price at
which shares allotted is not prejudicial to the interest of the
company;
(xix) the company has not created any security or charge in respect of
any secured debentures as no secured debentures were issued.
Accordingly, the provisions of clause 4 (xix) of the CARO, 2003 are not
applicable to the company;
(xx) the company has not raised money through public issue during the
year; and
(xxi) to the best of our knowledge and belief, no fraud on or by the
company, has been noticed or reported by the company during the year.
For and on behalf of
R. S. AGRAWAL & ASSOCIATES
Chartered Accountants
(Registration No. 100156W)
R.S. Agrawal
Mumbai Partner
30th May, 2012 Membership No. 33216
Mar 31, 2011
1. We have audited the attached Balance Sheet of RAJ RAYON INDUSTRIES
LIMITED [formerly known as Raj Rayon Limited (hereinafter referred to
as 'the company')] as at 31st March, 2011, the Profit and Loss Account
and the Cash Flow Statement for the year ended on that date, annexed
thereto. These financial statements are the responsibility of the
company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles and significant estimates made by
the management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors' Report) Order, 2003,
(hereinafter referred to as 'the CARO, 2003') issued by the Central
Government of India in terms of section 227(4A) of the Companies Act,
1956, (hereinafter referred to as 'the Act') we enclose in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the said
order.
4. Further to our comments in the Annexure referred to above, we
report that:
(i) we have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
(ii) in our opinion, proper books of account as required by law, have
been kept by the company so far as appears from our examination of
those books;
(iii) the Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) in our opinion, the Balance Sheet, Profit and Loss Account and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards ('AS') referred to in sub-section (3-C) of section
211 of the Act, except, ASÃ28 as referred to in note no.3(i) of
schedule 22 for non provision of doubtful debts for recovery of which
the company has filed legal suits amounting to Rs. 88,60,803/-;
(v) we, further report that, had the company made the respective
provision for doubtful debts, the profit for the year and also surplus
in Profit and Loss Account would have been lower by Rs. 88,60,803/-;
(vi) based on the written representation received from the directors as
at 31st March, 2011 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as at 31st March,
2011 from being appointed as a director in terms of section 274 (1) (g)
of the Act;
(vii) in our opinion and to the best of our information and according
to the explanations given to us, the said accounts read together with
Significant Accounting Policies and Notes on Accounts in Schedule '21'
and '22' respectively 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 Balance Sheet, of the state of affairs of the company
as at 31st March, 2011;
b) in the case of Profit and Loss Account, of the profit for the year
ended on that date; and
c) in the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
ANNEXURE TO AUDITORS' REPORT
Referred to in paragraph 3 of our report of even date
On the basis of such checks as we considered appropriate and in terms
of the information and explanations given to us, we report that:
(i) (a) the company has generally maintained proper records showing
particulars, including quantitative details and situation of fixed
assets;
(b) as explained to us, major portion of the fixed assets has been
physically verified by management during the year at reasonable
intervals. No material discrepancies were noticed on such verification;
and
(c) during the year the company has not disposed off a substantial part
of its fixed assets and the going concern status of the company is not
affected;
(ii) (a) as explained to us, inventories have been physically verified
during the year by the management. In our opinion, the frequency of
verification is reasonable;
(b) the procedures, explained to us, that followed by the management
for physical verification of inventories, are, in our opinion,
reasonable and adequate in relation to the size of the company and the
nature of its business; and
(c) on the basis of examination of the inventory records of the
company, we are of the opinion that the company is maintaining proper
records of inventory. No material discrepancies have been noticed on
physical verification of inventory as compared to book records;
(iii) (a) the company has not granted, during the year, secured or
unsecured loans to companies, firms or other parties covered in the
register maintained under section 301 of the Act; therefore provisions
of clause 4(iii) (a) to (d) of the CARO, 2003 are not applicable to the
company; and
(b) the company has taken unsecured loans from the companies covered in
the register maintained under section 301 of the Act. The maximum
amount involved during the year was Rs. 902.50 lacs and year-end
balance was Rs. 745.00 lacs from a company;
(c) in our opinion, the rate of interest, wherever applicable, and
other terms and conditions on which the loans have been taken from the
bodies corporate listed in the register maintained under section 301 of
the Act are not prima-facie prejudicial to the interest of the company;
and
(d) since the aforesaid loans, as informed to us, are repayable on
demand, the payment of principal amount and interest on the aforesaid
loans were regular;
(iv) in our opinion , there are generally adequate internal control
procedures commensurate with the size of the company and the nature of
its business, with regard to purchase of inventory and fixed assets and
sale of goods and services. During the course of audit, no major
weakness in internal control, has been noticed;
(v) (a) to the best of our knowledge and belief and representations
given to us, we are of the opinion that the particulars of contracts or
arrangements, referred to in section 301 of the Act have been entered
in the register maintained under section 301 of the Act; and
(b) in our opinion the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Act exceeding the value of Rs. 5.00 lacs in respect of any party
during the year have been made at prices which are reasonable having
regard to prevailing market prices at the relevant time where such
market prices are available;
(vi) in our opinion , the company has not accepted any deposit from the
public;
(vii) in our opinion, the company has an internal audit system
Commensurate with its size and nature of its business;
(viii) we have broadly reviewed the books of accounts maintained by the
company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209 (1) (d) of the Act and
are of the opinion that prima-facie the prescribed records have been
made and maintained. We have not, however, carried out detailed
examination of same;
(ix)(a) the company is generally regular in depositing with the
appropriate authorities undisputed statutory dues including Provident
Fund, Employees' State Insurance, Income-tax, Sales- tax, Wealth tax,
Service tax, Custom Duty, Excise Duty, Cess and other material
statutory dues applicable to it. There were no arrears as at 31st
March, 2011 for a period of more than six months from the date they
became payable; and
(b) the disputed statutory dues in respect of income tax, sales tax,
wealth tax, service tax, custom duty, excise duty and cess that have
not been deposited with the appropriate authorities on account of
dispute and the forum where the disputes are pending are as under:-
Name of Nature of Amount in Rs. (excluding
the Statute the dues penalties and interest,
if any)
Central Excise 23,88,909
Excise Act Duty 32,08,844
38,29,886
25,82,445
7,40,129
1,27,50,213
8,500#
2,95,032
3,35,298
2,83,594#
70,86,992
1,90,06,648
1,87,08,431
3,32,03,541
Textile Cess 34,715
Committee 87,643
2,12,521
3,09,818
1,37,459 7,82,156
Income Tax Income 2546695
Act Tax
Name of Period to Forum where dispute is
the Statute which the pending
amount
relates
Central 1995-1996
Excise Act
1996-1997
1997-1998
1998-1999
1999-2000
Additional Directorate
General of Anti-Evasion.
1999-2000 The Company is in process
of getting refund.
2003-2004 Appellate Tribunal of
Central Excise.
2003-2004 The company has filed
& reply to show cause
2004-2005 notice to Superintendent
of Central Excise.
2003-2004 The Company has filed
appeal in the Customs,
Excise & Service
Tax Appellate Tribunal,
Ahmedabad.
2005-2006 The company has filed
& reply to Show Cause
2006-2007 Notice received from
Commissioner of Central
Excise & Customs, Vapi.
2006-2007 The Company has filed
& reply to show cause notice
2007-2008 received from the Office
of the Commissioner,
Central Excise
& Customs, Vapi.
2007-2008 The company has filed
reply to Show Cause
Notice received from
Commissioner Central
Excise & Customs, Vapi.
2009-2010 The Company is in the
process of replying to Show
Cause Notice received
from Commissioner
Central Excise &
Customs, Vapi.
Textile 1997-1998
Committee
1998-1999
1999-2000
2000-2001
2001-2002 Textile Cess Appellate
Tribunal.
Income Tax 2004-2005* Application for giving
Act effect to the order of
CIT(A) is pending before
the Assessing Officer.
The appeal was decided in
favour of the company.
# Payment made under protest.
* Assessment Year
(x) the company has neither accumulated losses at the end of the
financial year nor has it incurred cash losses, both, in the financial
year under report and in the immediately preceding financial year;
(xi) according to the records examined by us, the company has not
defaulted in repayment of dues to the banks. There are no dues to a
financial institution or debenture holders;
(xii) as explained to us, the company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities;
(xiii) the company is not a chit fund or a nidhi mutual benefit fund/
society. Therefore, the provisions of clause 4(xiii) of the CARO, 2003
are not applicable to the company;
(xiv) the company has dealt or traded in shares, securities, debentures
and other investments. The company has maintained proper records and
made timely entries of such transactions and contracts. The company in
its own name holds all the shares, securities and other investments;
(xv) the company has not given any guarantee for loans taken by others
from banks or financial institutions;
(xvi) on the basis of the records examined by us, and relying on the
information compiled by the company for co-relating the funds raised to
the end use of the term loans, we have to state that, the company has,
prima-facie, applied the term loan for the purpose for which they were
obtained;
(xvii) on an overall examination of the financial statements of the
company, we are of the opinion that, no funds raised on short-term
basis have prima- facie been used for long-term purposes;
(xviii) the company has made preferential allotment of 26,90,000 share
warrants convertible into equity shares to a company covered in the
register maintained under section 301 of the Act on preferential basis
in accordance with SEBI (ICDR) Regulations, 2009. Accordingly, in our
opinion, the prices at which the share warrants were issued is not
prejudicial to the interest of the company;
(xix) the company has not created any security or charge in respect of
any secured debentures as no secured debentures were issued.
Accordingly, the provisions of clause 4 (xix) of the CARO, 2003 are not
applicable to the company;
(xx) the company has not raised money through public issue during the
year; and
(xxi) to the best of our knowledge and belief, no fraud on or by the
company, has been noticed or reported by the company during the year.
For and on behalf of
R. S. AGRAWAL & ASSOCIATES
Chartered Accountants
(Registration No. 100156W)
R.S. Agrawal
Mumbai Partner
26th May, 2011 Membership No. 33216
Mar 31, 2010
1. We have audited the attached Balance Sheet of RAJ RAYON LIMITED as
at 31st March 2010, the Profit and Loss Account and also Cash Flow
Statement for the year ended on that date, annexed thereto. These
financial statements are the responsibility of the CompanyÃs
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles and significant estimates made by
the management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (AuditorÃs Report) Order, 2003,
(hereinafter referred to as Ãthe CARO 2003Ã) issued by the Central
Government of India in terms of section 227(4A) of the Companies Act,
1956, (hereinafter referred to as Ãthe ActÃ) we enclose in the Annexure
a statement on the matters specified in paragraphs 4 and 5 of the said
order.
4. Further to our comments in the Annexure referred to above, we
report that:
(i) we have obtained all the information and explanations, which to the
best of our knowledge and belief, were necessary for the purpose of our
audit;
(ii) in our opinion, proper books of account as required by law, have
been kept by the Company so far as appears from our examination of
those books;
(iii) the Balance Sheet, Profit and Loss Account and Cas Flow Statement
dealt with by this report are in agreement with the books of account;
(iv) in our opinion, the Balance Sheet, Profit and Loss Account and
Cash Flow Statement dealt with by this report comply with the mandatory
Accounting Standards (AS) referred to in sub-section (3-C) of section
211 of the Act, except, AS-28 as referred to in note no.3(h) of
schedule 22 for non provision of doubtful debts for recovery of which
the Company has filed legal suits amounting to Rs.93.54 lacs;
(v) we, further report that, had the Company made the respective
provision for doubtful debts, the profit for the year would have been
lower and surplus in profit and loss account would have been lower by
Rs.93.54 lacs;
(vi) based on the representation made, the directors of the Company do
not prima facie, have any disqualification as referred to in section
274 (1) (g) of the Act;
(vii) in our opinion and to the best of our information and according
to the explanations given to us, the said accounts read together with
Significant Accounting Policies and Notes on Accounts in Schedule 21
and 22 respectively and other notes appearing elsewhere in 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 Balance Sheet, of the state of affairs of the Company
as at 31st March, 2010;
b) in the case of Profit and Loss Account, of the profit for the year
ended on that date; and
c) in the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
ANNEXURE REFERRED IN PARAGRAPH 3 OF AUDITORS REPORT OF EVEN DATE ON
THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2010 OF RAJ
RAYON LIMITED
On the basis of such checks as we considered appropriate and in terms
of the information and explanations given to us, we report that:
(i) (a) the Company has generally maintained proper records showing
particulars, including quantitative details and situation of fixed
assets;
(b) as explained to us, major portion of the fixed assets has been
physically verified by management during the year at reasonable
intervals. No material discrepancies were noticed on such verification;
and
(c) during the year the Company has not disposed off a substantial part
of its fixed assets;
(ii) (a) as explained to us, inventories have been physically verified
during the year by the management. In our opinion, the frequency of
verification is reasonable;
(b) the procedures, explained to us, that followed by the management
for physical verification of inventories, are, in our opinion,
reasonable and adequate in relation to the size of the Company and the
nature of its business; and
(c) on the basis of examination of the inventory records of the
Company, we are of the opinion that, the Company is maintaining proper
records of inventory. No material discrepancies have been noticed on
physical verification of inventory as compared to book records;
(iii) (a) the Company has not granted, during the year, secured or
unsecured loans to companies, firms or other parties covered in the
register maintained under section 301 of the Act; therefore provisions
of clause 4(iii) (a) to (d) of the CARO 2003 are not applicable to the
Company; and
(b) the Company has taken unsecured loan from a company covered in the
register maintained under section 301 of the Act. The maximum amount
involved during the year was Rs. 900.00 lacs and year-end balance was
Rs. 230.00 lacs;
(c) in our opinion, the rate of interest and other terms and conditions
on which the loan has been taken from the body corporate listed in the
register maintained under section 301 of the Act are not prima-facie
prejudicial to the interest of the Company; and
(d) since the aforesaid loan, as informed to us, is repayable on
demand, the payment of principal amount and interest on the aforesaid
loan was treated as regular;
(iv) in our opinion, there are generally adequate internal control
procedures commensurate with the size of the Company and the nature of
its business, with regard to purchase of inventory and fixed assets and
sale of goods and services. During the course of audit, no major
weakness in internal control, has been noticed;
(v) (a) to the best of our knowledge and belief and representations
given to us, we are of the opinion that the particulars of contracts or
arrangements, referred to in section 301 of the Act have been entered
in the register maintained under section 301 of the Act; and
(b) in our opinion the transactions made in pursuance of contracts or
arrangements entered in the register maintained under section 301 of
the Act exceeding the value of rupees five lacs in respect of any party
during the year have been made at prices which are reasonable having
regard to prevailing market prices at the relevant time where such
market prices are available;
(vi) in our opinion , the Company has not accepted any deposit from the
public;
(vii) in our opinion, the Company has an internal audit system
commensurate with its size and nature of its business;
(viii) we have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 209 (1) (d) of the Act and
are of the opinion that prima facie the prescribed records have been
made and maintained;
(ix) (a) the Company is generally regular in depositing with the
appropriate authorities undisputed statutory dues including Provident
Fund, Employeesà State Insurance, Income-tax, Sales-tax, Wealth tax,
Service tax, Custom Duty, Excise Duty, Cess and other material
statutory dues applicable to it. There were no arrears as at 31st
March, 2010 for a period of more than six months from the date they
became payable;
(b) the disputed statutory dues in respect of income tax, sales tax,
wealth tax, service tax, custom duty, excise duty and cess that have
not been deposited with the appropriate authorities on account of
dispute and the forum where the disputes are pending are as under:-
Name of Nature of Amount
the Statute the dues (in Rupees)
(excluding penalties
and interest,
if any)
Central Excise 23,88,909
Excise Act Duty 32,08,844
38,29,886
25,82,445
7,40,129
1,27,50,213
8,500#
2,95,032
3,35,298
2,83,594#
70,86,992
1,90,06,648
1,87,08,431
Textile Cess 34,715
Committee 87,643
Act 2, 12,521
3, 09,818
1, 37,459
7, 82,156
Income Income tax 2546695
Tax Act
Name of the Period Forum where dispute
statute to which is pending
the
amount
relates
Central 1995-1996
Excise Act 1996-1997
1997-1998
1998-1999
1999-2000
Additional Directorate General
of Anti-Evasion.
1999-2000 The Company is in process of
getting refund.
2003-2004 Appellate Tribunal of Central
Excise.
2003-2004 The Company has filed
& reply to show cause
2004-2005 notice to
Superintendent of
Central Excise.
2003-2004 The Company has filed appeal in
the Customs Excise & Service
Tax Appellate Tribunal,
Ahmedabad.
2005-2006 The company has filed
& reply to Show Cause
2006-2007 Notice received from
Commissioner of Central Excise &
Customs, Vapi.
2006-2007 The Company has filed & reply to
show cause
2007-2008 notice received from the Office
of the Commissioner, Central
Excise & Customs, Vapi.
2007-2008 The company has filed reply to
Show Cause Notice received
from Commissioner, Central
Excise & Customs, Vapi.
Textile 1997-1998
Committee 1998-1999
Act 1999-2000
2000-2001
2001-2002
Textiles Cess Appellate
Tribunal
Incom Tax 2004-2005* The Commissioner of Income Tax
(Appeals)
Tax Act
# Payment made under protest.
* Assessment year
(x) the Company has neither accumulated losses at the
end of the financial year nor has it incurred cash losses, both, in the
financial year under report and in the immediately preceding financial
year;
(xi) according to the records examined by us, the Company has not
defaulted in repayment of dues to the banks. There are no dues to a
financial institution or debenture holders;
(xii) as explained to us, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities;
(xiii) the Company is not a chit fund or a nidhi mutual benefit fund/
society. Therefore, the provisions of clause 4(xiii) of the CARO 2003
are not applicable to the Company;
(xiv) the Company has dealt or traded in shares, securities, debentures
and other investments. The Company has maintained proper records and
made timely entries of such transactions and contracts. The Company in
its own name holds all the shares, securities and other investments;
(xv) the Company has not given any guarantee for loans taken by others
from banks or financial institutions;
(xvi) on the basis of the records examined by us, and relying on the
information compiled by the Company for co- relating the funds raised
to the end use of the term loans, we have to state that, the Company
has, prima- facie, applied the term loan for the purpose for which they
were obtained;
(xvii) on an overall examination of the financial statements of the
Company, we are of the opinion that, no funds raised on short-term
basis have prima facie been used for long-term purposes;
(xviii) the Company has made preferential allotment of 8,99,000 equity
shares of Rs. 10/- each to a Company covered in the register maintained
under section 301 of the Act on preferential basis in accordance with
SEBI (ICDR) Guidelines 2009;
(xix) the Company has not created any security or charge in respect of
any secured debentures as no secured debentures were issued.
Accordingly, the provisions of clause 4 (xix) of the CARO 2003 are not
applicable to the Company;
(xx) the Company has not raised money through public issue during the
year; and
(xxi) to the best of our knowledge and belief, no fraud on or by the
Company, has been noticed or reported by the Company during the year.
For and on behalf of
R. S. AGRAWAL & ASSOCIATES
Chartered Accountants
(Registration No. 100156W)
R.S. Agrawal
Mumbai Partner
28th May 2010 Membership No. 33216