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Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Auditor Report of Hindoostan Mills Ltd.

Mar 31, 2025

We have audited the accompanying financial statements of
Hindoostan Mills Limited (âthe Companyâ), which comprise
the Balance Sheet as at March 31, 2025, the Statement of
Profit and Loss (including Other Comprehensive Income),
the Statement of Cash Flows and the Statement of Changes
in Equity for the year then ended, and notes to the financial
statements including a summary of material accounting policies
and other explanatory information.

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 Companies Act, 2013 (âthe
Actâ) in the manner so required and give a true and fair view
in conformity with Indian Accounting Standards (âInd ASâ)
specified under section 133 of the Act and other accounting
principles generally accepted in India, of the state of affairs of
the Company as at March 31, 2025, its loss including its other
comprehensive income, its cashflows and the changes in equity
for the year ended on that date.

Basis of Opinion

We conducted our audit of the financial statements in accordance
with the Standards on Auditing (SAs) specified under section
143(10) of the Act. Our responsibilities under those Standards
are further described in the Auditorâs Responsibility 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 made thereunder, and we have fulfilled
our other ethical responsibilities in accordance with these
requirements and the iCaIâs Code of Ethics. We believe that the
audit evidence obtained by us is sufficient and appropriate to
provide a basis for our audit opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current year. These matters were addressed in
the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.

Sr.

No.

Key Audit Matter

How the matter was
addressed in our audit

Provisions and Contingent Liabilities (Refer Note No.
32 (XI) to the Financial Statements)

> There are certain
legal cases against
the Company
or pursued by the
Company.

This involves high
level of Management
judgement to
determine the
possible outcome
of the legal cases,
estimation of level of
provisioning and its
related accounting
disclosures.

Our audit procedures amongst

others included the following:

> Performing substantiative
procedure on underlying
calculations for the
provisioning made,
relying on opinions if
any obtained by the
Management

> discussing the matters
with the Management and
assessing Management
conclusion and its
probable, possible and
remote analysis of thereof

> We have validated
the completeness and
appropriateness of
provision / related
disclosures in the
financial statements
and concluded that the
provision / disclosures
are adequate.

Emphasis of Matter

We draw attention to note 32(X) to the statement, in respect of
Board of Directors decision to close down textile division (under
temporary suspension from October 3, 2024), with effect from
April 15, 2025 subject to approval of Government Authorities.
The Company continues to pursue itâs other business operation.

Our opinion is not modified in respect of this matter.

Information Other than the Financial Statements and
Auditorâs Report Thereon

The Companyâs Board of Directors are responsible for the
preparation of the other information. The other information
comprises the information included in the Annual Report, but
does not include the financial statements 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 in the
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 are 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 Companyâs Board of Directors is 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, cash flows, and changes in equity of the
Company in accordance with accounting principles generally
accepted in India including the Ind AS specified under Section
133 of the Act read with the Companies (Indian Accounting
Standards) Rules, 2015, as amended. 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, Board of Directors 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
Board of Directors either intends to liquidate the Company or
to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the
Companyâs financial reporting process.

Auditorâs Responsibility for the Audit of the Financial
Statements

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:

â¢ 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.

â¢ Obtain an understanding of internal financial 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 controls system in place and the operating
effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates and
related disclosures in the financial statements made by the
Management.

â¢ Conclude on the appropriateness of 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.

â¢ 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.

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
year 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditorâs Report) Order,
2020 (âthe Orderâ) issued by the Central Government in
terms of Section 143(11) of the Act, we give in âAnnexure
Aâ a statement on the matters specified in paragraphs 3 and
4 of the Order, to the extent applicable.

2. A. As required by Section 143(3) of the Act, based on our

audit, 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
except for the matters stated in the paragraph
2B(f) below on reporting under Rule 11(g) of the
Companies (Audit and Auditors) Rules, 2014.

c) The balance sheet, the statement of profit and
loss (including other comprehensive income),
the statement of cash flows and the statement of
changes in equity dealt with by this report are in
agreement with the relevant books of account.

d) In our opinion, the aforesaid financial statements
comply with the Ind AS specified under Section
133 of the Act, read with Companies (Indian
Accounting Standards) Rules, 2015, as amended.

e) On the basis of the written representations received
from the directors as on March 31, 2025 taken
on record by the Board of Directors, none of the
directors is disqualified as on March 31, 2025 from
being appointed as a director in terms of Section
164(2) of the Act.

f) The modifications relating to the maintenance of
accounts and other matters connected therewith are
as stated in the paragraph 2A(b) above on reporting
under Section 143(3)(b) of the Act and paragraph
2B(f) below on reporting under Rule 11(g) of the
Companies (Audit and Auditors) Rules, 2014.

g) With respect to the adequacy of the internal
financial controls over financial reporting of the
Company and the operating effectiveness of such
controls, refer to our separate Report in âAnnexure
Bâ.

B. With respect to the other matters to be included in
the Auditorâs Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014,
(as amended), in our opinion and to the best of our
information and according to the explanations given to
us:

a) The Company has disclosed the impact of pending
litigations as on March 31, 2025 on its financial
position in its financial statements refer Note 32
(XI) to the financial statements;

b) The Company has made provision, as required
under the applicable law or accounting standards,
for material foreseeable losses, if any, on long-term
contracts including derivative contracts;

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

d) (i) The Management has represented, to best of

their knowledge and belief, that 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(s) or entity(ies),
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.

(ii) The Management has represented, to best
of their knowledge and belief, that no
funds have been received by the Company
from any person(s) or entity(ies), 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.

(iii) Based on such audit procedures as
considered reasonable and appropriate in
the circumstances, nothing has come to our
notice that has caused us to believe that the
representations under sub clause (d) (i) & (ii)
above contain any material misstatement.

e) The Company has not paid any dividend during the
year.

f) The Company has used three accounting software
for maintaining its books of account, which have
a feature of recording audit trail (edit log) facility.
Based on our examination which included test
checks, the same has operated throughout the
year for all relevant transactions recorded in
the respective software except for the instances
mentioned below. Further, we did not come
across any instance of the audit trail feature being
tampered with.

i) The feature of recording audit trail (edit log)
facility was not enabled at the database level
to log any direct data changes in respect of all
accounting software used for maintaining the
books of accounts.

ii) The feature of recording audit trail (edit log)
facility was not completely enabled at the
application layer of the accounting software
in respect of Sales Module, used for textile
division.

Additionally, the audit trail has been preserved
by the Company as per the statutory requirements
for record retention, to the extent audit trail was
maintained for accounting software.

C. In our opinion and to the best of our information
and according to the explanations given to us, the
remuneration paid by the Company to its directors
during the current year is in accordance with the
provisions of section 197 of the Act read with Schedule
V of the Act.

For S H R & CO.

Chartered Accountants
FRN: 120491W

Deep N Shroff

Partner

Membership No. 122592
UDIN:

Place: Mumbai
Date: May 14, 2025

Mar 31, 2024

We have audited the accompanying financial statements of
Hindoostan Mills Limited (âthe Companyâ), which comprise
the Balance Sheet as at March 31, 2024, the Statement of
Profit and Loss (including Other Comprehensive Income), the
Statement of Cash Flows and the Statement of Changes in Equity
for the year then ended, and 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, the aforesaid financial statements
give the information required by the Companies Act, 2013 (âthe
Actâ) in the manner so required and give a true and fair view
in conformity with accounting principles generally accepted
in India including Indian Accounting Standards (âInd ASâ)
specified under section 133 of the Act, of the state of affairs of
the Company as at March 31, 2024, its profits including its other
comprehensive income, its cashflows and the changes in equity
for the year ended on that date.

Basis of Opinion

We conducted our audit of the financial statements in accordance
with the Standards on Auditing (SAs) specified under section
143(10) of the Act. Our responsibilities under those Standards
are further described in the Auditorâs Responsibility 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 made thereunder, and we have fulfilled
our other ethical responsibilities in accordance with these
requirements and the ICAIâs Code of Ethics. We believe that the
audit evidence obtained by us is sufficient and appropriate to
provide a basis for our audit opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed
in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.

Sr. No.	Key Audit Matter	How the matter was addressed in our audit
	Inventory and its valuation thereof (Refer Note 2.10 of the Significant Accounting Policies)
i)	> The inventories comprise of Raw Materials, Finished Goods, Work in Progress and others. Existence of Inventories is a matter of significant importance. > Inventory valuation involves significant assumptions and estimations made by the Management. Management also makes an assessment in respect of carrying value of inventory whether stated at the lower of cost or net realisable value (âNRVâ). > We have identified inventories as a key audit matter because of the size of the inventories, judgment applied in the valuation of inventories.	Our audit procedures amongst others included the following: > assessed the appropriateness of the inventories accounting policies and its compliances with applicable accounting standards. > evaluated the design of key internal financial controls and operating effectiveness of the relevant key controls with respect to physical verification of inventory, valuation of inventory and management assessment of arriving at lower of cost or NRV. > year-end count of inventory was carried out by the Management and was checked on a sample basis by us. > tested, on a sample basis, the valuation of inventories as at the year end and the Managementâs assessment for writing down of inventories to the NRV held as at the balance sheet date.
ii)	Provisions and Contingent Liabilities (Refer Note No. 33 (X) to the Financial Statements)
	> There are certain legal cases against the Company or pursued by the Company. This involves high level of Management judgement to determine the possible outcome of the legal cases, estimation of level of provisioning and its related accounting disclosures.	Our audit procedures amongst others included the following: > Performing substantiative procedure on underlying calculations for the provisioning made, relying on opinions if any obtained by the Management > discussing the matters with the Management and assessing Management conclusion and provisions thereof > We have validated the completeness and appropriateness of the related disclosures in the financial statements and concluded that the disclosures are sufficient.

Information Other than the Financial Statements and
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.

Responsibilities of Management and those charged with
governance for the Financial Statements

The Companyâs Board of Directors is 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, cash flows, and changes in equity of the
Company in accordance with accounting principles generally
accepted in India including the Ind AS specified under Section 133
of the Act read with the Companies (Indian Accounting Standards)
Rules, 2015, as amended. 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.

Those Board of Directors are also responsible for overseeing the
Companyâs financial reporting process.

Auditorâs Responsibility 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 Standards on Auditing 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:

â¢ Obtain an understanding of internal financial 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 controls system in place and the operating
effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies
used and the reasonableness of accounting estimates and
related disclosures in the financial statements made by the
Management.

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.

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.

Report on Other Legal and Regulatory Requirements

2. A. As required by Section 143(3) of the Act, based on our

audit, 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

except for the matters stated in the paragraph
2B(f) below on reporting under Rule 11(g) of the
Companies (Audit and Auditors) Rules, 2014.

d) In our opinion, the aforesaid financial statements
comply with the Ind AS specified under Section
133 of the Act, read with Companies (Indian
Accounting Standards) Rules, 2015, as amended.

e) On the basis of the written representations received
from the directors as on March 31, 2024 taken
on record by the Board of Directors, none of the
directors is disqualified as on March 31, 2024 from
being appointed as a director in terms of Section
164(2) of the Act.

g) With respect to the adequacy of the internal financial
controls over financial reporting of the Company
and the operating effectiveness of such controls,
refer to our separate Report in âAnnexure Bâ.

a) The Company has disclosed the impact of pending
litigations as on March 31, 2024 on its financial
position in its financial statements refer Note 33
(X) to the financial statements;

b) The Company has made provision, as required
under the applicable law or accounting standards,
for material foreseeable losses, if any, on long-term
contracts including derivative contracts;

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

d) (i) 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 persons or entities, including
foreign entities (âIntermediariesâ) with the
understanding, whether recorded in writing or
otherwise, that the intermediary shall:

â¢ Directly or indirectly lend or invest in other
persons or entities identified in any manner
whatsoever (âUltimate Beneficiariesâ) by
or on behalf of the Company or

â¢ Provide any guarantee, security or the like
or on behalf of the Ultimate Beneficiaries.

(ii) The Management has represented that, to the
best of its knowledge and belief, no funds
have been received by the Company from any
persons or entities (âFunding Partiesâ), with
the understanding, whether recorded in writing
or otherwise, that the Company shall:

â¢ Directly or indirectly, lend or invest
in other persons or entities identified
in any manner whatsoever (âUltimate
Beneficiariesâ) by or on behalf of the
Funding Party or

â¢ Provide any guarantee, security or the
like from or on behalf of the Ultimate
Beneficiaries; and

e) The Company has not paid any dividend during the
year.

f) The reporting under Rule 11(g) of the Companies
(Audit and Auditors) Rules, 2014 is applicable
from 1 April 2023.

The Company has used three accounting software
for maintaining its books of account, which have

a feature of recording audit trail (edit log) facility.
Based on our examination which included test
checks, the same has operated throughout the
year for all relevant transactions recorded in
the respective software except for the instances
mentioned below. Further, we did not come
across any instance of the audit trail feature being
tampered with.

i) The feature of recording audit trail (edit log)
facility was not enabled at the application layer
of the accounting software used for primary
and subsidiary records of textile division in
respect of certain fields and modules. Further
based on the information available, we are
unable to ascertain whether audit trail (edit
log) in respect of accounting software used for
primary books of account of Textile division
was always enabled (not disabled), for the
period April 1, 2023 to November 30, 2023.

ii) The feature of recording audit trail (edit log)
facility was not enabled at the database level
to log any direct data changes in respect of all
accounting software used for maintaining the
books of accounts.

C) In our opinion and to the best of our information
and according to the explanations given to us, the
remuneration paid by the Company to its directors
during the current year is in accordance with the
provisions of section 197 of the Act read with
Schedule V of the Act.

For S H R & CO.

Chartered Accountants

FRN: 120491W

Deep N Shroff

Partner

Membership No. 122592

UDIN:

Place: Mumbai

Date: 23^rd May, 2024

Mar 31, 2018

Report on the Financial Statements

We have audited the accompanying financial statements of HINDOOSTAN MILLS LIMITED (âthe Companyâ) which comprise the Balance Sheet as at 31st March 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Managementâs Responsibility for the Financial Statements

The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of theAct for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements 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.

Auditorâs 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 and Rules made thereunder including the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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 theAct in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2018;

(b) in the case of the Statement of Profit and Loss (including Other Comprehensive Income), of the loss for the year ended on that date;

(d) In the case of the Statement of Changes in Equity for the year ended on that date

Other Matter:

The financial information of the Company for the year ended 31^st March, 2017 and the transition date opening balance sheet as at 1^st April, 2016 included in these financial statements, are based on the previously issued statutory financial statements for the years ended 31^st March, 2017 and 31^st March, 2016 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by us, on which we expressed an unmodified opinion dated 9^th May, 2017 and 4^th May, 2016 respectively. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the have been audited by us. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ), 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 obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

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

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

(d) In our opinion, the aforesaid financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act;

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

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure âBâ; and

(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Amendment Rules, 2017, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:

(i) The company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer to Note No. 33 Point No. II(A), II(B) and II(C) of other notes to the financial statements.

(ii) The Company does not have any long-term contracts including derivative contracts for which there could be any material foreseeable losses and hence, the question of making provision for such losses does not arise.

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

Annexure - A to the Auditorsâ Report

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

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

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the company, the title deeds of Leasehold Land are held in the name of the company.

(ii) As explained to us, inventories were physically verified during the year by the management at reasonable intervals and no material discrepancies were noticed on physical verification. Further, Inventory lying with third party processors as on 31^st March, 2018 aggregating to Rs.07.63 lakhs (previous year Rs.70.04 lakhs) were not verified for which confirmations have been obtained.

(iii) The Company has not granted loans to parties covered in the register maintained under section 189 of the Act. Thus, paragraph 3(iii) of the Order is not applicable.

(iv) In our opinion and according to the information and explanations given to us, the Company:

(a) Has complied with the provisions of section 186 of the Act, with respect to the investments made.

(b) The provisions of section 185 of the Act are not applicable to it.

(v) The Company has not accepted any deposits from the public. Thus, paragraph 3 (v) of the Order is not applicable

(vi) We have broadly reviewed the books of accounts and records maintained by the Company pursuant to the rule made by the Central Government for the maintenance of Cost Records under Sub-Section 1 of Section 148 of the Companies Act, 2013 and are of the opinion that prima facie the prescribed accounts and records have been so made and maintained. We have, however, not made a detailed examination of the accounts and records with a view to determining whether they are accurate or complete.

(vii) In respect of statutory dues:

(a) According to the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employeesâ State Insurance, Income-tax, Sales-Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues as applicable, with the appropriate authorities during the year.

(b) According to the information and explanations given to us, statutory dues aggregating to Rs.91.57 lakhs which have not been deposited as on 31^st March, 2018 on account of disputes are given below:

Name Of Statute	Nature of dues	Amount C in lakhs)	Period to which the dues relate	Forum Where dispute is pending
Income Tax Act,1961	Income Tax dues	3.12	A.Y. 2007-08	Commissioner of Income Tax.
		1.94	A.Y. 2010-11	Commissioner of Income Tax.
		3.94	A.Y. 2014-15	Commissioner of Income Tax.
Central Excise Act	Excise Duty	4.06	1977-2002	Dy. Commissioner of Central Excise.
		2.49		Joint Commissioner of Central Excise
		27.78		Asst. Commissioner of Central Excise
		16.63	1994-1998	Commissioner of Central Excise.
		5.36	1996-2003	CESTAT
Maharashtra Sales Tax and Central Sales Tax	Sales Tax and Central Sales Tax	5.10	2002-03	Dy. Commissioner of sales-tax (Appeal)-I
Maharashtra Sales Tax on the transfer of property in goods involved in the execution of the work contract (Reenacted) Act, 1989	Work contract Tax	21.15	1993-94 to 1997-98	Dy. Commissioner of sales-tax (Appeal)-I

(viii) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to its banks.

(ix) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Thus, paragraph 3 (ix) of the Order is not applicable.

(x) According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

(xi) The Company has paid/provided managerial remuneration which is in accordance with the provisions of section 197 read with Schedule V of the Companies Act, 2013.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Thus, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by Indian Accounting Standard 24.

(xiv) According to the information and explanations give to us and based on our examination of the records of the Company, during the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) According to the information and explanations given to us and based on our examination of the records of the Company it is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

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

We have audited the internal financial controls over financial reporting of HINDOOSTAN MILLS LIMITED (âthe Companyâ) as of 31^st March, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managementâs Responsibility for Internal Financial Controls

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

Auditorsâ Responsibility

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

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls over Financial Reporting

A Companyâs internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Companyâs internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Companyâs assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

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

For M. A. Parikh & Co.

Chartered Accountants

(Firmâs Registration No. 107556W)

MukuL M. PATEL

Partner

Membership No. 032489

Place: Mumbai

Date: May 16, 2018

Mar 31, 2017

Report on the Financial Statements

We have audited the accompanying financial statements of HINDOOSTAN MILLS LIMITED (âthe Companyâ) which comprise the Balance Sheet as at 31st March 2017, 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.

Managementâs Responsibility for the Financial Statements

The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Amendment Rules, 2016. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditorâs Responsibility

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

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

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

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:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2017;

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Amendment Rules, 2016;

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

(g) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Amendment Rules, 2017, in our opinion and to the best of our information and according to the explanations given to us:

(i) The company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer to Note No. 27B Point No. III(A), III(B) and III(C) of other notes to the financial statements.

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

(iv) The Company has provided requisite disclosure in its financial statements as to holdings as well as dealing in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and the same are in accordance with the books of account maintained by the Company. Refer Note No. 15.1 of the financial statements.

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

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

(c) According to the information and explanations given to us and on the basis of our examination of the records of the company, the title deeds of Leasehold Land are held in the name of the company.

(ii) As explained to us, inventories were physically verified during the year by the management at reasonable intervals and no material discrepancies were noticed on physical verification. Further, Inventory lying with third party processors as on 31st March, 2017 aggregating to Rs 70.04 lakhs (previous year Rs. 63.95 lakhs) were not verified for which confirmations have been obtained.

(iii) The Company has not granted loans to parties covered in the register maintained under section 189 of the Act. Thus, paragraph 3(iii) of the Order is not applicable.

(iv) In our opinion and according to the information and explanations given to us, the Company:

(a) Has complied with the provisions of section 186 of the Act, with respect to the investments made.

(b) The provisions of section 185 of the Act are not applicable to it.

(v) The Company has not accepted any deposits from the public. Thus, paragraph 3 (v) of the Order is not applicable.

(vi) We have broadly reviewed the books of accounts and records maintained by the Company relating to the manufacture of textiles pursuant to the Order made by the Central Government for the maintenance of Cost Records under Sub-Section 1 of Section 148 of the Companies Act, 2013 and are of the opinion that prima facie the prescribed accounts and records have been so made and maintained. We have, however, not made a detailed examination of the accounts and records with a view to determining whether they are accurate or complete.

(vii) In respect of statutory dues:

(b) According to the information and explanations given to us, statutory dues aggregating to Rs. 159.14 lakhs which have not been deposited as on March 31, 2017 on account of disputes are given below:

Name Of Statute	Nature of dues	Amount (Rs. in lakhs) (Gross)	Period to which the dues relate	Forum Where dispute is pending
Income Tax Act,1961	Income Tax dues	3.12	A.Y. 2007-08	Commissioner of Income Tax.
		1.94	A.Y. 2010-11	Commissioner of Income Tax.
		3.94	A.Y. 2014-15	Commissioner of Income Tax.
Central Excise Act	Excise Duty	4.06	1977-2002	Dy. Commissioner of Central Excise.
		2.49		Joint Commissioner of Central Excise
		27.78		Asst. Commissioner of Central Excise
		51.87	1994-1998	Commissioner of Central Excise.
		20.10	1996-2003	CESTAT
Maharashtra Sales Tax and Central Sales Tax	Sales Tax & Central Sales Tax	22.69	2000-01 & 2002-03	Dy. Commissioner of sales-tax (Appeal)-I
Maharashtra Sales Tax on the transfer of property in goods involved in the execution of the work contract (Reenacted) Act, 1989	Work contract Tax	21.15	1990-91 to 2000-01	Dy. Commissioner of sales-tax (Appeal)-I

(viii)Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to its banks.

(x) According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

(xi) The Company has paid/provided managerial remuneration which is in accordance with the provisions of section 197 read with Schedule V of the Companies Act, 2013.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Thus, paragraph 3(xii) of the Order is not applicable.

(xiii)According to the information and explanations given to us and based on our examination of the records of the Company, transactions with related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by Accounting Standard 18.

(xiv)According to the information and explanations give to us and based on our examination of the records of the Company, during the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.

(xvi)According to the information and explanations given to us and based on our examination of the records of the Company it is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For M. A. Parikh & Co.

Chartered Accountants

(Firmâs Registration No. 107556W)

MUKUL M. PATEL

Partner

Membership No. 032489

Place: Mumbai

Date: 9^th May, 2017

Mar 31, 2016

INDEPENDENT AUDITORâS REPORT

To the Members of HINDOOSTAN MILLS LIMITED Report on the Financial Statements

We have audited the accompanying financial statements of HINDOOSTAN MILLS LIMITED (the Company)â which comprise the Balance Sheet as at 31st March 2016, 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.

Managementâs Responsibility for the Financial Statements

The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fi 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.

Auditorâs 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 required to be included in the audit report under the provisions of the Act and the Rules made there under.

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 auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs 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:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2016;

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

(d) In our opinion, the aforesaid 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 write presentations received from the directors as on 31^st March, 2016 and taken on record by the Board of Directors, none of the directors is disqualified as on 31^st March, 2016 from being appointed as a director in terms of Section 164(2) of the Act;

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

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

ANNEXURE - A TO THE AUDITORSâ REPORT

Annexure referred to in paragraph 1 of our report on Other

Legal and Regulatory Requirements of even date

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

to us and on the basis of our examination of the records of the company, the title deeds of Leasehold Land are held in the name of the company.

ii) In respect of its inventories:

(a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals except inventory lying with third party processors as on 31st March, 2016 aggregating to Rs, 63.95 lakhs (previous year Rs, 3.86 lakhs) for which confirmations have been obtained.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) The Company has not granted loans to parties covered in the register maintained under section 189 of the Act. Thus, paragraph 3(iii) of the Order is not applicable.

(iv) In our opinion and according to the information and explanations given to us, the Company:

(a) Has complied with the provisions of section 186 of the Act, with respect to the investments made.

(b) The provisions of section 185 of the Act are not applicable to it.

(v) The Company has not accepted any deposits from the public.

(vi) We have broadly reviewed the books of accounts and records maintained by the Company relating to the manufacture of textiles pursuant to the order made by the Central Government for the maintenance of Cost Records under Sub-Section 1 of Section 148 of the Companies Act, 2013 and are of the opinion that prima facie the prescribed accounts and records have been so made and maintained. We have, however, not made a detailed examination of the accounts and records with a view to determining whether they are accurate or complete.

(vii) In respect of statutory dues:

(b) According to the information and explanations given to us, statutory dues aggregating to '' 273.81 lakhs which have not been deposited as on March 31, 2016 on account of disputes are given below:

Name Of Statute	Nature of dues	Amount (Rs. in lakhs) (Gross)	Period to which the dues relate	Forum Where dispute is pending
Income Tax Act,1961	Income Tax dues	3.12	A.Y. 2007-08	Commissioner of Income Tax.
Income Tax Act,1961	Income Tax dues	1.94	A.Y. 2010-11	Commissioner of Income Tax.
Central Excise Act	Excise Duty	4.06	1977-2002	Asst./Dy. Commissioner of Central Excise.
		2.49		Joint Commissioner of Central Excise
		37.98		Commissioner (Appeals) of Central Excise
		57.70	1994-1998	Asst. Commissioner of Central Excise.
		71.07	1996-2003	CESTAT
		0.68	1993-1994	Supreme Court
Maharashtra Sales Tax and Central Sales Tax	Sales Tax & Central Sales Tax	27.02	2000-01, 2002-03, 2009-10 & 2010-11	Dy. Commissioner of sales-tax (Appeal)-I
Maharashtra Sales Tax on the transfer of property in goods involved in the execution of the work contract (Reenacted) Act, 1989	Work contract Tax	21.15	1990-91 to 2000-01	Dy. Commissioner of sales-tax (Appeal)-I

(viii) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to its banks.

(x) According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

(xi) The Company has paid/provided managerial remuneration which is in accordance with the provisions of section 197 read with Schedule V of the Companies Act, 2013.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Thus, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records the Company, transactions with related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standard.

(xiv) According to the information and explanations given to us and based on our examination of the records of Company, during the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures.

(xv) According to the information and explanations given to us and based on our examination of the records of Company, the Company has not entered into non-cash transactions with directors or persons connected w him. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) According to the information and explanations given to

us and based on our examination of the records of the Company it is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

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

We have audited the internal financial controls over financial reporting of HINDOOSTAN MILLS LIMITED (the Companyâ) as of 31 March 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managementâs Responsibility for Internal Financial Controls

Auditorsâ Responsibility

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

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

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

Meaning of Internal Financial Controls over Financial Reporting

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

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.

For M.A.Parikh & Co.

Chartered Accountants

(Firmâs Registration No. 107556W)

Mukul M. Patel

Partner Membership No. 32489

Place: Mumbai

Date: 4^th May, 2016

Mar 31, 2015

We have audited the accompanying financial statements of HINDOOSTAN MILLS LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date, and a summary of 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, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provision 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.

Auditor's Responsibility

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

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

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements

and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

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

and

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

Report on Other Legal and Regulatory Requirements

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, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

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

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

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

i. The company has disclosed the impact of pending litigations on its financial position in its financial statement - Refer to Note No. 27B Point No. III(A), III(B) and III(C) of other notes to the financial statements.

ii. The company does not have any long-term contracts including derivatives contracts and hence there are no material foreseeable losses.

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

Annexure to the Independent Auditors' Report The Annexure referred to in our Independent Auditors 'Report to the members of the Company on the financial statements for the year ended 31st March 2015, we report that :

i. In respect of its fixed assets:

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

(b) We are informed that the physical verification of Fixed Assets was carried out by the management at year end. According to the information and explanations given to us, discrepancies noticed on such verification were not material and have been dealt with appropriately in the books of accounts.

ii. In respect of its Inventories:

(a) As explained to us, Inventories were physically verified during the year by the management at reasonable intervals except inventory lying with third party processors as on 31st March, 2015 aggregating to Rs 3.86 lakhs (previous year Rs. 7.37 lakhs) for which confirmations have been obtained.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its Inventories and no material discrepancies were noticed on physical verification.

iii. The Company has not granted any loans to any party, covered in the register maintained under section 189 of the Companies Act, 2013 and hence clause 3(iii) of the Order is not applicable

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 and Fixed Assets and for the sale of goods and services. We have not noticed any major weaknesses in the Internal Control System during the course of audit.

v. The Company has not accepted any Deposits and hence, the directions of the Reserve Bank of India and the provisions of section 73 to 76 and other relevant provision of the Companies Act 2013 and its rules, are not applicable. Hence clause 3(v) of the Order is not applicable.

vi. We have broadly reviewed the books of accounts and records maintained by the Company relating to the manufacture of textiles pursuant to the order made by the Central Government for the maintenance of Cost Records under Sub-Section 1 of Section 148 of the Companies Act, 2013 and are of the opinion that prima facie the prescribed accounts have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

vii. In respect of statutory dues:

(a) According to the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Sales-Tax, Wealth Tax, Service Tax, Duty of Custom, Duty of Excise, Value Added Tax, Cess and any other statutory dues as applicable with the appropriate authorities during the year, except the arrears of Duty of Custom amounting to Rs. 6.31 Lacs outstanding for more than six months from the date they became payable.

(b) According to the information and explanations given to us, statutory dues aggregating to 381.74 lakhs which have not been deposited as on March 31, 2015 on account of disputes are given below:

Name of Nature of dues Amount (Rs. in Statute lakhs) (Gross)

Income Tax Income Tax dues 3.12 Act,1961

132.34

Central Excise Excise Duty 4.06 Act

2.49

37.96

102.10

39.93

Maharashtra Sales Tax and 29.02 Sales Tax and Central Sales Tax Central Sales Tax

Maharashtra Work contract Tax 30.72 Sales Tax on the transfer of property in goods involved in the execution of the work contract (Reenacted) Act, 1989

Name of Statute Period to which the Forum Where dispute is dues relate pending

Income Tax Act,1961 A.Y. 2007-08 Commissioner of Income Tax.

A.Y. 2010-11 Commissioner of Income Tax.

Central Excise Act 1977-2002 Asst./Dy. Commissioner of Central Excise.

Joint Commissioner of Central Excise

Commissioner (Appeals) of Central Excise

1996-2003 CESTAT

1994-1999 Supreme Court

Maharashtra 2000-01, 2002-03, Dy. Commissioner of sales- Sales Tax and 2009-10 & 2010-11 tax (Appeal)-I Central Sales Tax

Maharashtra Sales 1990-91 to 2000-01 Dy. Commissioner of sales- Tax on the transfer tax (Appeal)-I of property in goods involved in the execution of the work contract (Reenacted) Act, 1989

(c) According to the information and explanations given to us the amounts which were required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under have been transferred to such fund within time.

viii. Company does not have accumulated losses as at the end of the financial year and hence the question of accumulated losses being more than fifty per cent of its net worth does not arise. The Company has not incurred cash losses in the current financial year and the immediate preceding financial year.

ix. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any bank and financial institution during the year. The Company has not issued any debenture during the year.

x. According to information and explanations given to us, the Company has not given guarantees for loans taken by others from banks or financial institutions.

xi. According to information and explanations given to us, and on examination of the balance sheet and other records, we report that the term loan availed by the company has been applied for the purpose for which it is raised.

xii. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For M. A. Parikh & Co. Chartered Accountant Firm Reg. No. 107556W

MUKUL M. PATEL Partner Membership No. 32489

Place: Mumbai Date: 5 th May, 2015

Mar 31, 2014

We have audited the accompanying financial statements of HINDOOSTAN MILLS LIMITED (''the Company''), which comprise the Balance Sheet as at 31st March, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13 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.

Auditor''s Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014:

(b) in the case of the statement of profit and loss, of the profit for the year ended on that date;

and

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013:

e. On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

Annexure referred to in Paragraph 1 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 fixed assets.

(b) We are informed that the physical verification of fixed assets was carried out by the management at year end. According to the information and explanations given to us, discrepancies noticed on such verification were not material and have been dealt with appropriately in the books of accounts.

(c) There has not been any substantial disposal of fixed assets during the year and hence the question of the disposal of fixed assets affecting the going concern status of the Company does not arise.

ii. In respect of its inventories:

(a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals except inventory lying with third party processors as on 31st March, 2014 aggregating to Rs. 7.37 lakhs (previous year Rs. 13.33 lakhs) for which confirmations have been obtained.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

iii. (a) The Company has not granted any loans to any party, covered in the register maintained under section 301 of the Companies Act, 1956 and hence clauses 4(iii) (a), (b), (c) and (d) of the Order are not applicable.

(b) According to the information and explanations given to us, during the year, the Company has received interest bearing unsecured loans repayable on demand unsecured loan from four parties covered in the register maintained under section 301 of the Companies Act, 1956 aggregating to Rs. 400 lakhs and which are since repaid in full during the year. The Maximum amount involved during the year and outstanding balance of such loan as at the year end are Rs. 400 lakhs and Rs. Nil respectively.

(c) The rate of interest and other terms and conditions of such unsecured loans, in our opinion, are not prima facie prejudicial to the interest of the Company.

(d) Since the loans being repayable on demand have been repaid during the year with interest, the question of its regular payment of principal and interest does not arise and hence clause 4(iii)(g) of the Order is not applicable.

iv In our opinion and according to the information and explanations given to us, there is an internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. We have not noticed any major weaknesses in the internal control system during the course of audit.

v. In respect of contracts or arrangements entered in the register maintained in pursuance of section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in section 301 that needed to be entered in the register, maintained under the said section have been so entered.

(b) There is no such transaction (excluding loans reported under paragraph (iii) above), which is in excess of Rs. 5 lakhs in respect of any party.

vi. The Company has not accepted any deposits from the public and hence, the provisions of section 58A, 58AA and its rules, and also the directions of the Reserve Bank of India, or any other relevant provisions of the Act and the rules framed there under are not applicable. Hence clause 4 (vi) of the Order is not applicable.

vii. In our opinion, the internal audit function carried out during the year by a firm of Chartered Accountants appointed by the management is commensurate with the size of the Company and nature of its business.

viii. We have broadly reviewed the books of accounts and records maintained by the Company relating to the manufacture of textiles pursuant to the order made by the Central Government for the maintenance of Cost Records under Section 209(1)(d)of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

ix. In respect of statutory dues:

(a) According to the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Labour Welfare Fund, Income-tax, Wealth Tax, Central Sales-tax, Value Added Tax, Custom Duty, Excise Duty, Cess and any other statutory dues as applicable with the appropriate authorities during the year.

(b) According to the information and explanations given to us, statutory dues aggregating to Rs. 415.13 lakhs which have not been deposited as on March 31, 2014 on account of disputes are given below:

Name Of Statute Nature of dues Amount Period to which (Rs. in the dues relate lakhs) (Gross)

Income Tax Act, 1961 Income Tax dues 3.12 A.Y. 2007-08

132.34 A.Y. 2010-11

Central Excise Act Excise Duty 4.06 1977-2002

2.49

38.04

102.10 1996-2003

44.93 1994-1999

Maharashtra Sales Tax and Sales Tax & 29.02 2000-01, Central Sales Tax Central Sales Tax 2002-03, 2009-10 & 2010-11

Maharashtra Sales Tax on Work contract 59.03 1990-91 to the transfer of property in Tax 2000-01 goods involved in the execution of the work contract (Reenacted) Act, 1989

Name of Statute Forum Where dispute is pending

Income Tax Act, 1961 Commissioner of Income Tax.

Commissioner of Income Tax.

Central Excise Act Asst./Dy. Commissioner of Central Excise.

Joint Commissioner of Central Excise

Commissioner (Appeals) of Central Excise

CESTAT

Supreme Court

Maharashtra Sales Tax and Dy. Commissioner of sales-tax Central Sales Tax (Appeal)-I

Maharashtra Sales Tax on Dy. Commissioner of sales-tax the transfer of property (Appeal)-I in goods involved in the execution of the work contract (Reenacted) Act, 1989

x. The Company does not have accumulated losses as at the end of the financial year and hence the question of accumulated losses being more than fifty per cent of its net worth does not arise. The Company has not incurred cash losses in the current financial year and the immediate preceding financial year.

xi. In our opinion and according to the information and explanations given to us, the Company is not indebted to any bank and hence the question of default in repayment does not arise.

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, and hence, the question of maintenance of adequate records for this purpose does not arise.

xiii. In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4 (xiii) of the Order are not applicable to the Company.

xiv In our opinion and according to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. The investments in shares and units of mutual funds have been held by the Company in its name.

xv. According to information and explanations given to us, the Company has not given guarantees for loans taken by others from banks or financial institutions.

xvi. To the best of our knowledge and belief and according to the explanations given to us, in our opinion, no term loans have been availed by the Company. Therefore, the provisions of clause 4 (xvi) of the Order are not applicable to the Company.

xvii. According to the information and explanations given to us, and on an overall examination of the balance sheet of the Company, it has not raised funds on short-term basis, which have been used for long-term investment.

xviii. The Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956 and hence the question as to whether the price at which shares have been issued is prejudicial to the interest of the Company does not arise.

xix. According to the information and explanation given to us, the Company has not issued any debentures during the year and hence the question, of creation of security or charge in respect of debentures issued, does not arise.

xx. According to the information and explanation given to us, the Company has not raised funds by way of public issue during the year. Therefore, the provision of clause 4 (xx) of the Order is not applicable to the Company.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For M. A. Parikh & Co. Chartered Accountants Firm Reg. No. 107556W

Mukul M. Patel Partner Place: Mumbai Membership No. 32489 Date: 6th November, 2014

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of HINDOOSTAN MILLS LIMITED (the Company), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub- section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

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

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to in paragraph 1 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 fixed assets.

(b) We are informed that the physical verification of fixed assets was carried out by the management at year end. According to the information and explanations given to us, discrepancies noticed on such verification were not material and have been dealt with appropriately in the books of accounts.

(c) There has not been any substantial disposal of fixed assets during the year and hence the question of the disposal of fixed assets affecting the going concern status of the Company does not arise.

ii. In respect of its inventories:

(a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals except cloth lying with third party processors as on 31st March, 2013 aggregating to Rs 13.33 lakhs (previous year Rs. 9.12 lakhs) for which confirmations have been obtained!

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

iii. (a) According to information and explanations given to us, Company has granted interest free unsecured loan repayable on demand to its Subsidiary which is covered in the register maintained under section 301 of the Companies Act, 1956 amounting to Rs.622.96 lakhs. The maximum amount involved during the year and the outstanding balance of such loan as at the year end are Rs. 991.24 lakhs and Rs. 991.24 lakhs respectively.

Since the loan is interest free and repayable on demand, in our opinion:

(b) the terms and conditions of the loan are not prima facie prejudicial to the interest of the company.

(c) The question of its regular payment of principal and interest does not arise.

(d) Since the loan is repayable on demand, the question of their overdue amounts being more than Rs. 1 lakh, does not arise and hence clause 4(iii)(d) of the Order is not applicable.

(e) According to information and explanations given to us, during the year, the Company has not received unsecured loan from a party covered in the register maintained under section 301 of the Companies Act, 1956. However, the Company has received an opening balance of Rs. 90 lakhs, being interest bearing unsecured loan repayable on demand during the previous year and which is since repaid in full during the year. The Maximum amount involved during the year and outstanding balance of such loan as at the year end are Rs. 90 lakhs and Rs. Nil respectively.

(f) The rate of interest and other terms and conditions of such unsecured loans, in our opinion, are not prima facie prejudicial to the interest of the Company.

(g) Since the loans are repaid/repayable on demand, the question of its regular payment of principal and interest does not arise and hence clause 4(iii)(g) of the Order is not applicable.

iv In our opinion and according to the information and explanations given to us, there is an internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. We have not noticed any major weaknesses in the internal control system during the course of audit.

v. In respect of contracts or arrangements entered in the register maintained in pursuance of section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in section 301 that needed to be entered in the register, maintained under the said section have been so entered.

(b) There is no such transaction (excluding loans reported under paragraph (iii) above), which is in excess of Rs. 5 lakhs in respect of any party.

vi. The Company has not accepted any deposits from the public and hence, the provisions of section 58A, 58AA and its rules, and also the directions of the Reserve Bank of India, or any other relevant provisions of the Act and the rules framed there under not are applicable. Hence clause 4 (vi) of the Order is not applicable.

vii. In our opinion, the internal audit function carried out during the year by a firm of Chartered Accountants appointed by the management are commensurate with the size of the Company and nature of its business.

viii. We have broadly reviewed the books of accounts and records maintained by the Company relating to the manufacture of textiles pursuant to the order made by the Central Government for the maintenance of Cost Records under Section 209(1 )(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

ix. In respect of statutory dues:

(a) According to the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Labour Welfare Fund, Income-tax, Wealth Tax, Central Sales-tax, Value Added Tax, Custom Duty, Excise Duty, Cess and any other statutory dues as applicable with the appropriate authorities during the year. Further, there are no disputed amounts payable in respect of statutory dues.

(b) According to the information and explanations given to us, Income tax, Excise duty and Property Tax dues which have not been deposited as on March 31, 2013 on account of disputes are given below:

Name of Statute Nature of dues Amount Period to Forum Where dispute is (Rs. in lakhs) which the pending (Gross) dues relate

Income Tax Act, 1961 Income Tax dues 3.12 A.Y. 2007-08 Commissioner of Income Tax.

132.34 A.Y. 2010-11 Commissioner of Income Tax.

Central Excise Act Excise Duty 4.06 1977-2002 Asst./Dy. Commissioner of Central Excise. 2.49 Joint Commissioner of Central Excise

38.04 Commissioner (Appeals) of

Central Excise

102.10 1996-2003 CESTAT

44.93 1994-1999 Supreme Court

Maharashtra Sales Tax and Central Sales Tax Sales Tax & 86.57 2000-01 Dy. Commissioner of sales-tax Central Sales Tax 2004-05 (Appeal)-I

Maharashtra Sales Tax on the transfer of property in Work contract Tax 59.03 1990-91 to Dy. Commissioner of sales-tax goods involved in the execution of the work contract 2000-01 (Appeal)-I (Reenacted) Act, 1989

x. The Company does not have accumulated losses as at the end of the financial year and hence the question of accumulated losses being more than fifty per cent of its net worth does not arise. The Company has not incurred cash losses in the current financial year and the immediate preceding financial year.

xi. In our opinion and according to the information and explanations given to us, the Company is not indebted to any bank and hence the question of default in repayment does not arise.

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, and hence, the question of maintenance of adequate records for this purpose does not arise.

xiii.In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4 (xiii) of the Order are not applicable to the Company.

xiv. In our opinion and according to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. The investments in shares and units of mutual funds have been held by the Company in its name.

xv. According to information and explanations given to us, the Company has not given guarantees for loans taken by others from banks or financial institutions.

xvi. To the best of our knowledge and belief and according to the explanations given to us, in our opinion, no term loans have been availed by the Company. Therefore, the provisions of clause 4 (xvi) of the Order are not applicable to the Company.

xvii. According to the information and explanations given to us, and on an overall examination of the balance sheet of the Company, it has not raised funds on short-term basis, which have been used for long-term investment.

xviii.The Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956 and hence the question as to whether the price at which shares have been issued is prejudicial to the interest of the Company does not arise.

xix. According to the information and explanation given to us, the Company has not issued any debentures during the year and hence the question of creation of security or charge in respect of debentures issued, does not arise.

xx. According to the information and explanation given to us, the Company has not raised funds by way of public issue during the year. Therefore, the provision of clause 4 (xx) of the Order is not applicable to the Company.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For M. A. Parikh & Co.

Chartered Accountants Firm Reg. No. 107556W

MUKULM. PATEL

Partner

Membership No. 32489

Place: Mumbai

Date: May 4, 2013

Mar 31, 2012

Report on the Financial statements

We have audited the accompanying financial statements of Hindoostan Mills Limited (the Company), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Proft and Loss and Cash Flow Statement for the year ended on that date, and a summary of signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Financial statements

Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 (''the Act''). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fnancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and 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 internal control relevant to the Company''s preparation and fair presentation of the fnancial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Report on other Legal and Regulatory Requirements

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

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

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

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

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

d. In our opinion, the Balance Sheet, Statement of Proft and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

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

f. Since the Central Government has not issued any notifcation as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

anneXURe to tHe aUDItoRs'' RePoRt

(Referred to in paragraph 1 of our report of even date)

i. In respect of its fxed assets:

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

(b) We are informed that the physical verifcation of fxed assets was carried out by the management at year end. According to the information and explanations given to us, discrepancies noticed on such verifcation were not material and have been dealt with appropriately in the books of accounts.

(c) There has not been any substantial disposal of fxed assets during the year and hence the question of the disposal of fxed assets affecting the going concern status of the Company does not arise.

ii. In respect of its inventories:

(a) As explained to us, inventories were physically verifed during the year by the management at reasonable intervals except cloth lying with third party processors as on 31st March, 2013 aggregating to Rs 13.33 lakhs (previous year Rs. 9.12 lakhs) for which confrmations have been obtained.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verifcation.

iii. (a) According to information and explanations given to us, Company has granted interest free unsecured loan repayable on demand to its Subsidiary which is covered in the register maintained under section 301 of the Companies Act, 1956 amounting to Rs.622.96 lakhs. The maximum amount involved during the year and the outstanding balance of such loan as at the year end are Rs. 991.24 lakhs and Rs. 991.24 lakhs respectively.

Since the loan is interest free and repayable on demand, in our opinion:

(b) the terms and conditions of the loan are not prima facie prejudicial to the interest of the company.

(c) The question of its regular payment of principal and interest does not arise.

(d) Since the loan is repayable on demand, the question of their overdue amounts being more than Rs. 1 lakh, does not arise and hence clause 4(iii)(d) of the Order is not applicable.

(e) According to information and explanations given to us, during the year, the Company has not received unsecured loan from a party covered in the register maintained under section 301 of the Companies Act, 1956. However, the Company has received an opening balance of Rs. 90 lakhs, being interest bearing unsecured loan repayable on demand during the previous year and which is since repaid in full during the year. The Maximum amount involved during the year and outstanding balance of such loan as at the year end are Rs. 90 lakhs and Rs. Nil respectively.

(f) The rate of interest and other terms and conditions of such unsecured loans, in our opinion, are not prima facie prejudicial to the interest of the Company.

(g) Since the loans are repaid/repayable on demand, the question of its regular payment of principal and interest does not arise and hence clause 4(iii)(g) of the Order is not applicable.

iv In our opinion and according to the information and explanations given to us, there is an internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fxed assets and for the sale of goods and services. We have not noticed any major weaknesses in the internal control system during the course of audit.

v. In respect of contracts or arrangements entered in the register maintained in pursuance of section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in section 301 that needed to be entered in the register, maintained under the said section have been so entered.

(b) There is no such transaction (excluding loans reported under paragraph (iii) above), which is in excess of Rs. 5 lakhs in respect of any party.

vi. The Company has not accepted any deposits from the public and hence, the provisions of section 58A, 58AA and its rules, and also the directions of the Reserve Bank of India, or any other relevant provisions of the Act and the rules framed there under not are applicable. Hence clause 4 (vi) of the Order is not applicable.

vii. In our opinion, the internal audit function carried out during the year by a frm of Chartered Accountants appointed by the management are commensurate with the size of the Company and nature of its business.

viii. We have broadly reviewed the books of accounts and records maintained by the Company relating to the manufacture of textiles pursuant to the order made by the Central Government for the maintenance of Cost Records under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

ix. In respect of statutory dues:

According to the information and explanations given to us, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Labour Welfare Fund, Income-tax, Wealth Tax, Central Sales-tax, Value Added Tax, Custom Duty, Excise Duty, Cess and any other statutory dues as applicable with the appropriate authorities during the year. Further, there are no disputed amounts payable in respect of statutory dues.

x. The Company does not have accumulated losses as at the end of the fnancial year and hence the question of accumulated losses being more than ffty per cent of its net worth does not arise. The Company has not incurred cash losses in the current fnancial year and the immediate preceding fnancial year.

xi. In our opinion and according to the information and explanations given to us, the Company is not indebted to any bank and hence the question of default in repayment does not arise.

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, and hence, the question of maintenance of adequate records for this purpose does not arise.

xiii. In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual beneft fund / society. Therefore, the provisions of clause 4 (xiii) of the Order are not applicable to the Company.

xiv. In our opinion and according to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments. The investments in shares and units of mutual funds have been held by the Company in its name.

xv. According to information and explanations given to us, the Company has not given guarantees for loans taken by others from banks or fnancial institutions.

xvi. To the best of our knowledge and belief and according to the explanations given to us, in our opinion, no term loans have been availed by the Company. Therefore, the provisions of clause 4 (xvi) of the Order are not applicable to the Company.

xvii.According to the information and explanations given to us, and on an overall examination of the balance sheet of the Company, it has not raised funds on short-term basis, which have been used for long-term investment.

xviii.The Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956 and hence the question as to whether the price at which shares have been issued is prejudicial to the interest of the Company does not arise.

xix. According to the information and explanation given to us, the Company has not issued any debentures during the year and hence the question of creation of security or charge in respect of debentures issued, does not arise.

xx. According to the information and explanation given to us, the Company has not raised funds by way of public issue during the year. Therefore, the provision of clause 4 (xx) of the Order is not applicable to the Company.

xxi. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year. For M. a. Parikh & Co.

Chartered Accountants

Firm Reg. No. 107556W

MUKUL M. PateL

Partner

Membership No. 32489

Place: Mumbai

Date : May 4, 2013

Mar 31, 2011

1. We have audited the attached consolidated balance sheet of Hindoostan Mills Ltd. (erstwhile The Sirdar Carbonic Gas Company Ltd), as at March 31,2011, and also the consolidated profit and loss account and the consolidated 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 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 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 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order, on the basis of such checks of the books and records of the Company as we considered appropriate and the information and explanations given to us during the course of our audit.

4. Further 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 appears from our examination of the Books of Account.

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

d) In our opinion, the Profit & Loss Account and the Balance Sheet of the Company comply with the accounting standards referred to in Section 21 l(3C)of the Companies Act, 1956.

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

f) In our opinion and to the best of our information and according to the explanations given to us, the accounts, read together with the notes, particularly note no 1 of schedule 18 thereto, in respect of amalgamation of The Hindoostan Spg. & Wvg. Mills Limited with the Company w.e.f 01-04-2010 as per the Order of Hon'ble High Court of Bombay dated 1st April, 2011, whose financial statements and information along with its subsidiary viz. Hindoostan Technical Fabrics Limited has been audited by M/s. M. A. Parikh & Co., Chartered Accountants give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view.

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

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

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

ANNEXURE TO THE AUDITORS' REPORT*

(*Referred to our Report of even date on the accounts of Hindoostan Mills Ltd. for the year ended March 31, 2011)

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

(b) As explained to us, fixed assets have been physically verified by the management during the year, no material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off a substantial part of the fixed assets.

2. (a) The inventories have been physically verified by the management during the year. In our opinion, the frequency of physical verification is reasonable, except cloth lying with third party processors, for which confirmation has been obtained

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

(c) The Company has maintained proper records of inventories. Discrepancies noticed on physical verification of stocks as compared to book records have been properly dealt with in the books of account.

3. (a) According to information and explanations given to us, erstwhile The Hindoostan Spg. & Wvg. Mills Ltd. has granted interest free unsecured loan repayable on demand to its Subsidiary Company which is covered in the register maintained under section 301 of the Companies Act, 1956 amounting to Rs.239.70 lakhs. The maximum amount involved during the year and the outstanding balance of such loan as at the year ended is Rs.239.70 lakhs and Rs.222.78 lakhs respectively.

(b) The rate of interest and other terms and conditions of such unsecured loans, in our opinion, are not prima facie prejudicial to the interest of the Company.

(c) Since the loan is interest free and repayable on demand, the question of its regular payment of principal and interest does not arise.

(d) Since the loan is interest free and repayable on demand, the question of their overdue amounts being more than Rs. 1 lakh, does not arise and hence clause 4(iii)(d) of the Order is not applicable.

(e) The company has not taken any unsecured loan repayable on demand from any party covered in the register maintained under section 301 of the Act and hence, clause 4(iii)(e) of the Order is not applicable.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchases of inventory, fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in system of internal control.

5. (a) In our opinion and according to the information and explanations given to us, transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) According to the information and explanations given to us, that the transactions made with party in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956, exceeding in aggregating the value of rupees five lakhs during the year have been made at price which are reasonable having regard to prevailing market price of such goods, material and services.

6. According to the information and explanations given to us, the company has not accepted any deposit from the public as defined under the provisions of section 58A and 58AA of the Companies Act, 1956.

7. The Company's Internal audit system needs to be strengthened.

8. We have broadly reviewed the books of account maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

9. (a) According to the records of the Company, 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 any other statutory dues have generally been deposited on time during the year with the appropriate authorities. There are no arrears of the aforesaid dues as on the date of the Balance Sheet outstanding for more than six months from the date they became payable.

(b) According to the records of the Company, and according to information and explanations given to us the dues of Income-tax/Sales- tax/Wealth- tax/Service-tax/ Custom-duty/ Excise-duty/Cess which have not been deposited on account of any disputes are as under:

Sr Name of the Statute Nature of Amount Forum where No Dues (Rs. In dispute is lakhs) pending

1. Maharashtra Sales Sales-tax 39.64 Deputy tax on the transfer on work Commissioner of property in goods contract of Sales-tax involved in the (1991-92 to (Appeal)-I execution of the work 2000-01) contract (Reenacted) Act, 1989

2. Maharashtra Sales tax Sales tax 74.97 Deputy & Central Sales tax & Central Commissioner Act. Sales tax of Sales-tax (2000-01 to (Appeal)-I 2004-05)

3 Income tax Income tax 3.12 Income tax (Asst. Yr. Appellate 2007-08) Tribunal

4. Income tax Income tax 50.34 Income tax (Asst. Yr. Appellate 1993-94) Tribunal

5. Central Excise Act Excise Duty 38.04 Asst./DC/ of (1977-02) Central Excise 2.49 JC of Central Excise

6. Central Excise Act ExciseDuty 39.11 Commissioner (2000-03) of (Appeals) , Central Excise

7 Central Excise Act ExciseDuty 71.07 CEGAT (1996-03)

8. Central Excise Act ExciseDuty 29.73 Supreme Court (1994-99)

10. The Company has no accumulated losses at the end of the current financial year The company has not incurred cash losses during the financial year and in immediately preceding financial year.

11. According to the records of the company and as per the information and explanations given to us there was no default in repayment of dues to a financial institution or bank.

12. According to the records of the company and as per die information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion the Company is not a Chit Fund Company or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

14. The company is not dealing in shares/ securities and hence provisions of clause 4(xiv) of the order is not applicable.

15. According to the records of the company, and as per the information and explanations given to us the Company has not given guarantees for loans taken by others from banks and financial Institutions.

16. According to the records of the company, and as per the information and explanations given to us, the Company has not taken the term loan and hence provision of clause 4(xvi) of the order is not applicable.

17. According to the records of the company, and as per the information and explanations given to us and on an overall examination of the balance sheet of the Company, it has not raised funds on short-term basis, which have been used for long term investments.

18. According to the records of the company, and as per the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19. According to the records of the company, and as per the information and explanations given to us the Company has no debenture outstanding as at the year- end. Therefore the question of creating a security for the same does not arise.

20. The Company has not raised any money by public issue during the year covered by our report.

21. According to the records of the company, and as per the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For H. N. Motiwalla & Co. Chartered Accountants (F. R. No. 111949W)

H. N. Motiwalla Partner (M.No. 11423)

Place: Mumbai

Date : August 10,2011

Mar 31, 2010

1. We have audited the attached Balance Sheet of The Sirdar Carbonic Gas Company Ltd. as at March 31, 2010 and Profit & Loss Account and cash flow for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We 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 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 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order, on the basis of such checks of the books and records of the Company as we considered appropriate and the information and explanations given to us during the course of our audit.

4. Further to our comments in Para 7 of the Annexure, 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 appears from our examination of the Books of Account.

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

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

e) On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2010 from being appointed as a Director under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the accounts, read together with the notes, particularly note no. 2 of schedule 20 thereon in respect of amalgamation of six wholly owned subsidiaries and in consequence reduction of share capital give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view.

i) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010

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

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

ANNEXURE TO THE AUDITORS REPORT*

(Referred to our Report of even date on the accounts of The Sirdar Carbonic Gas Company Limited for the year ended March 31, 2010)

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

(b) As explained to us, fixed assets have been physically verified by the management during the year, no material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off a substantial part of the fixed assets.

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

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

(c) The Company has maintained proper records of inventories. Discrepancies noticed on physical verification of stocks as compared to book records have been properly dealt with in the books of account.

3. (a) The Company has not granted loans to any party covered in the register maintained under section 301 of the Companies Act. Hence, reporting under this clause is not applicable.

(b) The company has not taken any unsecured loan from any party covered in the register maintained under section 301 of the Companies Act, 1956. Hence, reporting under this clause is not applicable.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchases of inventory, fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in system of internal control.

5. (a) In our opinion and according to the information and explanations given to us, transactions that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) According to the information and explanations given to us, the company has transactions made with party in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding in aggregating the value of rupees five lakhs during the year have been made at price which are reasonable having regard to prevailing market price of such goods, material and services.

6. According to the information and explanation?.; given to us, the company has not accepted any deposit from the public as defined under the provisions of section S8A and 58AA of the Companies Act, 1956.

7. The Company being listed company does not have internal audit system.

8. As informed to us, the Central Government has not prescribed the maintenance of cost records under Section 209(1 )(d) of the Companies Act, 1956 in respect of the products manufactured by the Company.

9. (a) According to the records of the Company, undisp ,uted 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 any other statutory dues have generally been deposited on time during the ye* ir with the appropriate authorities. There are no arrears of the aforesaid dues as on the date of the Balance Sheet outstanding for more than six months from the date they became payable.

(b) According to the records of the Company, and according to information and explanations given to us the dues of Income-tax/Sales- tax/Wealtl Max/Service-tax/Gustom-duty/ Excise-duty/Cess which have not been deposited on account of any disputes areas under

Sr. Name of the Statute Nature of Amount Forum where dispute is No. dues (Rupees) pending 1 Maharashtra Sal
work contract (Reenacted) Act,

1989

2 Maharashtra Sales tax & Sales tax & 74,96.577 Deputy Commissioner of Central Sales tax Act Central Sales-tax

Sate tax (Appeal)-I

10. The Company has no accumulated losses at the end of the current financial year. The company has not incurred cash losses during the financial year and in immediately preceding financial year.

11. According to the records of the company and as per the information and explanations given to us there was no default in repayment of dues to a financial institution or bank or debenture holders and other securities.

12. According to the records of the company and as per the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares debentures and other securities.

13. In our opinion the Company is not a Chit Fund Company or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

14. The company is dealing in securities and has maintained proper records of the transactions and contracts, timely entries have been made and all the securities have been held in the name of the company

15. According to the records of the company, and as per the information and explanations given to us the Company has not given guarantees for loans taken by others from banks and financial Institutions.

16. According to the records of the company, and as per the information and explanations given to us, the Company has taken the term loan and the same have been utilized for the purpose for which it was obtained.

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

18. According to the records of the company, and as per the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19. According to the records of the company, and as per the information and explanations given to us the Company has no debenture outstanding as at the year-end. Therefore the question of creating a security for the same does not arise.

20. The Company has not raised any money by public issue during the year covered by our report.

21. According to the records of the company, and as per the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For H. N. MOTIWALLA & CO.

Chartered Accountants

(F. R. No. 111949W)

H. N. MOTIWALLA

Place: Mumbai Partner

Date: 31st May, 2010 (M. No. 1 1423)

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