To 

The Members of 


ACIL Cotton Industries Limited, Baroda 

1. We have audited the atta ched Balance Sheet of ACIL Cotton Industries Limited
as at 31 st March, 2012 and the related Profit and Loss Account and Cash Flow
Statement for the year ended on that date, which we have signed under reference to this
report. 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 standa rds 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’ of India and on the basis of such checks as we cons idered appropriate and
according to the information and explanations given to us, we set out in the Annexure, a
statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent
applicable. 

4. Further to our comments in the Annexure referred in paragraph (3) above, we report
that : 

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

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

c) The Balance Sheet , Profit and Loss Account and Cash Flow Statement dealt with by
this Report are in agreement with the Books of Account; 

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

e) On the basis of confirmations received from the Directors of the Company and taken
on record by the Board of Directors, we report that none of the Directors is disqualified
as on 31 st March, 2012 from being appointed as a Director of the Company in
terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 and 

f) Subject to the matters reported above, In our opinion, and to the best of our
information and according to the explanations given to us, the said accounts read together
with the Notes thereon give the in formation required by the Companies Act, 1956 in the
manner so required and give a true and fair view in conformity with the accounting
principles generally accepted in India : 

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

ii) in the case of the Prof it and Loss Account, of the Profit for the year ended on
that date. 

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


  

    

    
For L. N. PATEL & Co.
  
  

    

    
Chartered Accountants
  
  

    

    
Sd/-
  
  

    
Place : Ahmedabad
    
[L.N. PATEL]
  
  

    
Dated : 31/08/2012
    
PROPRIETOR
  



ANNEXURE TO THE AUDITORS’ REPORT 

(Referred to in Paragraph (3) of our Report of even date) 

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

(ii) (a) As explained to us , the stocks of finished and semi -finished goods and raw
materials of the Company have been physically verified by the Management at reasonable
interva ls during the year. In respect of Stock lying with third parties , these have
substantially been confirmed by them. 

(b) In our opinion and according to the information and explanations given to us the
procedure of physical verification of stocks follow ed by the Management are reasonable
and adequate in relation to Size of the company and nature of its business. 

(c) In our opinion and according to the information and explanations given to us, the
company is maintaining proper records of inventory. The discrepancies noticed between the
physical stocks as verified by the Management and the Book records were not material
having regard to the size of the operations of the company. 

(iii) (a) In our opinion the company has not granted or taken any loans, secured or
unsecured to/from companies, firms or other parties covered in the Register maintained
under Section 301 of the Companies Act,1956.Consequently requirement of clauses (iii b),
(iii c), (iii d) of paragraph 4 of the order are not applicable. 

(iv) In our opinion and according to information and explanations given to us, during
the course of our audit there are adequate internal control procedures commensurate with
the size of the Company and the nature of its business for the purchases of i nventory,
and fixed assets and for the sale of goods. During the course of our audit, we have not
observed any continuing failure to correct major weakness in internal controls. 

(v) According to the information and explanations given to us, that no transactions
need to be entered into the register maintained under section of 301 of the Companies Act
1956. Consequently requirement of clause (v,b) of paragraph 4 of the Order is not
applicable. 

(vi) In our opinion the company has not accepted any deposit s from the public, within
the meaning of Section 58A and 58AA of the Companies Act,1956. 

(vii) The company has an internal audit system which in our opinion is commensurate
with the size and nature of business. 

(viii) To the best of our knowledge and according to explanations given to us the
Central Government has not prescribed maintenance of cost records under Section 209 (1)
(d) of the Companies Act, 1956 for any of the products manufactured by the Company. 

(ix) (a) According to information a nd explanations given to us, The company is regular
in depositing with Appropriate Authorities undisputed statutory dues including Provident
fund, Sales tax, Excise-duty, cess and other material statutory dues applicable to it. We
are informed that employees state insurance act, 1948 is not applicable to the company. 

(b) According to the information and explanations given to us , there were no
undisputed amounts payable in respect of dues as referred to (ix)(a) above, which were
outstanding as on 31 st March, 2012 for a period of more than six months from
the date they became payable. 

(c) According to the information and explanations given to us, entire sales tax
outstanding amount has been paid by company. 

(x) The company has accumulated losses as at the end of the Financial year 31st
March, 2012 although non exceeding its networth and the company has also incurred cash
losses at the current financial year, 31 st March 2012 as well as in the
immedia tely preceding financial year also. 

(xi) In our opini on and according to the information and explanations given to us, the
company has settled and paid all secured loans fully. 

(xii) In our opinion the company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities. 

(xiii) In our opinion and according to information and explanation given to us, the
company is not a chitfund, 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. 

(xiv) According to the information and explanations given to us, the company has been
dealing or trading in shares, securities, debentures and other investments. 

(xv) In our opinion and according to the information and explanations given to us, the
company has not given guarantee for loans taken by others from banks or financial
institutions. Accordingly provisions of clause 4 (xv) of the Companies (Auditors Report)
Order,2003 are not applicable to the company. 

(xvi) In our opinion and information and explanations given to us, the company had not
raised any term loan during the year under review. 

(xvii) In our opinion and according to the information and explanations given to us,
and according to Cas h flow statement, on an overall examinations of the Balance Sheet of
the Company we report that no funds raised on short term basis have been utilized for long
term investment and vice-versa. 

(xviii) According to information and explanations given to us, the Company has not made
any preferential allotment of shares to parties and companies covered in the register
maintained under section 301 of the Companies Act, 1956. 

(xix) In our opinion and according to information and explanations given to us, the
Company has not issued any secured debentures during the period covered by the report.
Accordingly, the provisions of clause 4 (xix) of the Companies (Auditors Report) Order,
2003 are not applicable to the company. 

(xx) During the period covered by our a udit report, the Company has not raised any
money by public issues. 

(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 has been noticed or reported
during the course of our audit. 


  

    

    
For L. N. PATEL & Co.
  
  

    

    
Chartered Accountants
  
  

    

    
Sd/-
  
  

    
Place : Ahmedabad
    
[L.N. PATEL]
  
  

    
Dated : 31/08/2012
    
PROPRIETOR