We have audited the attached Balance Sheet of The Rai Saheb Rekhchand
Mohota Spg. & Wvg. Mills Ltd. Mumbai as at 31st March, 2010 and also
the Profit and Loss Account and the Cash Flow Statement for the year
ended on that date and annexed thereto. These financial statements are
the responsibility of the Companys management. Our responsibility is
to express an opinion on these financial statements based on our Audit.
We have conducted our audit in accordance with auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statements
presentation. We believe that ouraudit provides a reasonable basis for
ouropinion.
1. As required by the Companies (Auditors Report) Order, 2003 (as
amended by the Amendment Order 2004) issued by the Central Government
of India in terms of Section 227 (4A) of the Companies Act, 1956, we
enclose, an annexure hereto a statement on the matters referred to in
para 4 and 5 of the said order.
2. Further and subject to our comments in the annexure referred to in
paragraph 1 above we report that:
a) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purpose of
ouraudit.
b) In our opinion proper books of accounts as required by Law have been
kept by the Company, so far as appears from our examination of those
books.
c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement
dealt with by this Report are in agreement with the books of account.
d) In our opinion, the Balance Sheet, Profit & Loss Account and the
Cash Flow Statement dealt by this report comply with the Accounting
Standards referred to in sub-section (3C) of Sec. 211 of the Companies
Act, 1956 except for provision of Leave with pay (refer note No. 4 of
schedule Q) in accordance with revised accounting standard 15 for
employee benefits.
e) On the basis of written representations received from the Directors
as on 31st March, 2010 and taken on record by the Board of Directors,
we report that none of the Directors is disqualified as on 31s March,
2010 from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, and subject to (d) above, and
non-transfer of leased assets to company (refer note No. 7 of schedule
Q) the accounts read with other notes thereon give the information
required by the Companies Act, 1956 in the manner so required and give
a true and fair view in conformity with the accounting principles
generally accepted in India.
i) In the case of the Balance Sheet of the State of affairs of the
Company as at 31st March 2010,
ii) In the case of the Profits Loss Account of the Loss forthe year
ended on that date and
iii) In the case of the Cash Flow Statement, of the Cash Flow for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT ON THE ACCOUNTS FOR THE YEAR ENDED 31
ST MARCH, 2010 OF THE RAISAHEB REKHCHAND MOHOTASPG.& WVG. MILLS LTD.
(Referred to in Paragraph 1 thereof.)
i) a. The Company is maintaining proper records showing full
particulars including quantitative details and situation of fixed
assets.
b. The management has confirmed that wherever practicable, physical
verification of all the major fixed assets has been carried out. No
serious discrepancies have been noticed by the management on such
verification.
c. No substantial part of fixed assets has been disposed off during
the year, which has bearing on the going concern status of the company.
ii) a. The inventory has been physically verified by the management at
reasonable intervals.
b. In our opinion and according to the information and explanations
given to us the procedures of physical verification of inventory
followed by the management were found reasonable and adequate in
relation to the size of the company and the nature of its business.
c. The Company is maintaining proper records of inventory. No material
discrepancies were noticed on physical verification.
iii) a. The Company has not granted any loans, secured or unsecured to
companies, firms or other parties listed in the Register maintained
under Section 301 of the companies Act, 1956. Accordingly, clause
4(iii)(b) to (d) of the order are not applicable.
b. The Company has not taken any loans, secured or unsecured from
companies, firms or other parties listed in the Register maintained
under Section 301 of the companies Act, 1956. Accordingly, clause
4(iii)(f) to (g) of the order are not applicable.
iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control system commensurate
with the size of the company and the nature of its business with
regards to purchase of inventory, fixed assets and for the sale of
goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weaknesses in internal
control.
v) In our opinion and according to the information and explanations
given to us there are no contracts and arrangements referred to in
Section 301 of the Companies Act 1956, particulars of which need to be
entered into a register maintained under Section 301 of the Companies
Act, 1956. Accordingly, clause 4(v)(b) of the order is not applicable.
vi) The Directives issued by the Reserve Bank of India and the
provisions of Section 58A and 58AA or any other relevant provisions of
the Companies Act, 1956 and the rules framed thereunder have been
complied with in respect of deposits accepted from the public. We have
been informed that, no order has been passed by Company Law Board or
National Company Law Tribunal or Reserve Bank of India or any Court or
Tribunal in this regard.
vii) The Company has an Internal Audit System, which in our opinion is
commensurate with the size and nature of the business.
viii) The Company has made and maintained proper cost records as
prescribed by Central Government under Section 209(1 )(d) of the
Companies Act, 1956 for the products of the Company, but no detailed
examination of such records has been carried out by us.
ix) a. According to the information and explanations given to us and on
the basis of our examination of the books of accounts, the Company is
regular in depositing undisputed statutory dues including Provident
Fund, Investor Education and Protection Fund, Employees State
Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty, Cess and Other statutory dues with the appropriate
authorities and there are no undisputed amounts payable in respect of
above statutory dues outstanding as at 31.03.2010 for a period
exceeding six months from the date they became payable.
b. According to the information and explanations given to us, the dues
of Sales Tax, Income Tax, Wealth Tax, Service tax, Custom Duty, Excise
Duty and Cess which have not been deposited on account of any dispute
and forum where the dispute is pending are as under;
Name of the
Statute Nature of Dues Amount Forum where
dispute
(Rs.in lacs) is pending
Central Excise Excise Duty on disallo
wance 321.13 Commissioner of
Act, 1944 of deemed Credit availed Central Excise,
Nagpur
Central Excise Excise Duty on disallo
wance
Act, 1944 of utilization of deemed
credit 40.92 - do -
towards payment of
AED (ST)
x) The Company does not have any accumulated losses and has not
incurred cash losses during the current financial year and in the
immediately preceding financial year.
xi) The Company has not defaulted in repayment of dues to Financial
Institutions or Banks.
xii) According to the information and explanations given to us, the
Company has not granted any loans or advances on the basis of security
by way of pledge of Shares, Debentures and other Securities.
xiii) The Company is not a chitfund or Nidhi/mutual benefit
fund/society.
xiv) The Company is not in the business of dealing or trading in
Shares. The Company has maintained proper records of transactions and
contracts in respect of Shares, Securities, Debentures and other
Investments and timely entries have been made therein. The Shares,
Securities, Debentures and Other Investments have been held by the
company, in its own name.
xv) In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from Banks and Financial Institutions.
xvi) Based on information and explanations given to us by the
management, term loans were applied forthe purpose for which the loans
were obtained.
xvii) On the basis of examination of the Cash Flow Statement, the funds
raised on short term basis have not been used for long term investment.
xviii) During the year under Audit, the Company has not made any
preferential allotment of shares to parties or companies covered in the
register maintained under section 301 of the Companies Act, 1956.
xix) The company has neither issued any debentures during the year nor
there is any outstanding debentures as on 31.03.2010 and hence
provisions of clause 4(xix) of the order are not applicable to the
company.
xx) The Company has not raised any money byway of the Public Issue
during the year.
xxi) Based upon the audit procedures performed and on the basis of
information and explanations provided by the management, we report that
no fraud, on or by the company has been noticed or reported during the
year.
FOR BATLIBOI & PUROHIT
Chartered Accountants
Firm Registration Number 101048W
K. A. Mehta
Place : Hinganghat Partner
Dated: 29/05/2010 Membership No. 111749
