Runeecha Textiles Ltd Auditor Reports

TO THE MEMBERS OF RUNEECHA TEXTILES LIMITED

Report on the Financial Statements

1. We have audited the accompanying financial statements of Runeecha Textiles Limited ("the Company"), 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 significant accounting policies and other explanatory information which we have signed under reference to this report.

Managements responsibility for the Financial Statements

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

Auditors Responsibility

3 Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors 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 Companys preparation and fair presentation of the financial statements in order to design the audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

6 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: (i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2016; (ii) in the case of the Statement of Profit and Loss, of the loss of the Company for the year ended on that date; and (iii) in the case of Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Emphasis of Matter i) We draw attention to Note 36 to the financial statements wherein, in the opinion of the management, despite accumulated losses of the Company having exceeded the net worth (excluding revaluation reserves), no operations in last two years and defaults in payment of loans and interest thereon, the financial statements have been prepared on a going concern bas is in view of matters more fully explained in the said note. ii) We draw attention to Note no. 39 of the financial statements, wherein the management has explained reasons for disclosing optionally convertible cumulative preference shares, which were overdue for redemption and have been granted extension, as preference shares under shareholders funds. iii) We draw attention to Note No. 41 of the financial statement, the company has received the notice for Bank under section 13(2) and 13(4) of the Securitisation and Reconstruction of Financial Assets & Enforcement of Security Interest Act, 2002.

Our report is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirement

7. As required by the Companies (Auditors Report) Order, 2016 (Order), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we enclose in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the said Order.

8 As required by Section143 (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 purpose of our audit; b. in our opinion proper books of accounts as required by the 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 aforesaid financial statements dealt with by this report comply with the Accounting Standards referred to in section 133 of the Companies Act, 2013; e. on the basis of written representations received from the directors as on 31st March 2016, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2016 from being appointed as director in terms of section 164(2) of the Companies Act, 2013 ; f. With respect to the adequacy of the Internal Financial Controls over the financial reporting of the Company and operating effectiveness of such controls, refer to our separate Report in "Annexure B"; and g. With respect to the other matters to be included in the Auditors Report in accordance with Rule11 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 no pending litigations as at 31st March, 2016 which has impact on its financial position, ii. The Company did not have any long term contracts involving losses and had no derivative contracts outstanding as at 31st March 2016; and iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

PLACE OF SIGNATURE: N. Delhi	FOR K.N. GUTGUTIA & COMPANY
11-K, GOPALA TOWER	CHARTERED ACCOUNTANTS
25, RAJENDRA PLACE,	FRN 304153E
NEW DELHI-110008
DATE : 30th May, 2016	(B.R. GOYAL)
	PARTNER
	M.NO. 12172

ANNEXURE TO THE INDEPENDENT AUDITORS REPORT

The Annexure "A" referred to in paragraph 7 of our report of even date to the members of Runeecha Textiles Limited on the financial statements for the year ended 31st March, 2016.

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

(b) As explained to us, physical verification of fixed assets has been carried out by the Company and no material discrepancies were noticed on such verification. In our opinion the frequency of verification is reasonable, having regard to- the size of the Company and nature of its business.

(c) Title deeds of immovable properties of the company are held in the name of the Company.

ii) (a) The inventories have been physically verified during the year by the management at reasonable intervals.

(b) In our opinion, no material discrepancies were noticed on physical verification of stocks.

iii) According to the information and explanations given to us, the Company has, during the year, not granted any loans, secured or unsecured to companies, firm, Limited liability partnerships or other parties covered in the register maintained under section 189 of the companies Act, 2013. Accordingly, paragraph 3(iii) of the Order is not applicable to the Company

iv) According to the information and explanation given to us, the company has no Investment, Loans and guarantees and hence paragraph 3(iv) of the Order is not applicable to the Company.

v) The Company has not accepted any deposits during the year and hence paragraph 3(v) of the Order is not applicable to the Company.

vi) The Central Government has prescribed the maintenance of cost records under Sub Section (1) of Section 148 of the Companies Act, 2013 for any of the products of the Company, however, there was no production of any items during the year.

vii) (a) According to the records examined by us , the Company is not regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, service tax, duty of custom, duty of excise, value added tax, cess and other statutory dues wherever applicable.

According to the information and explanations given to us, no undisputed arrears of statutory dues except Income Tax dues of Rs 17,32,948/-, Provident Fund of Rs 2,00,642/-, Employee State Insurance of

Rs 1,46,973/-, Tax deducted at source of Rs 4,17,689/- and Service Tax of Rs 58,295/-, were outstanding as on the last date of the financial year for a period of more than six months from the date they became payable.

(b) According to the records of the Company, there was no dues in respect of income tax, Sales Tax, Service Tax, duty of customs, duty of excise, value added tax, cess and other statutory duties which have not been deposited on account of disputes.

viii) Based on our audit procedures and according to the information given the management, the company has defaulted in repayment of its dues of Rs 21,45,41,916/- in respective of loans or borrowings from bank during the year.

ix) In our opinion and according to the information and explanations given to us, the Company has taken term loan & the same were applied for the purposes for which they were raised and money has not been raised by way of initial public offer or further public offer (including debt instrument) during the year.

x) Based upon the audit procedures performed and to the best of our knowledge and according to the information and explanations given to us by the management, we report that no fraud by the Company or any fraud on the company by its officer or employees has been noticed or reported during the course of our audit.

xi) The Company has paid the managerial remuneration along with the requisite approval mandated by the provisions of Section 197 read with schedule V to 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 and hence paragraph 3 (xii) of the Order is not applicable to the Company.

xiii) As explained to us and as per the records of the company, in our opinion the transactions with the related parties are in Compliance with Section 177 and Section 188 of the Companies Act, 2013 and the details 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 the company, the company has not made any preferential allotment or private placement of shares or fully or party convertible debenture during the year. Hence paragraph 3 (xiv) of the Order is not applicable to the Company.

xv) During the year, the Company has not entered into any non-cash transaction with Director or person connected with him. Hence paragraph 3 (xv) of the Order is not applicable to the Company.

xvi) The Company is not required to be registered under section 45-1A of the Reserve Bank of India Act, 1934 and hence paragraph 3 (xvi) of the Order is not applicable to the Company.

PLACE OF SIGNATURE: N. Delhi	FOR K.N. GUTGUTIA & COMPANY
11-K, GOPALA TOWER	CHARTERED ACCOUNTANTS
25, RAJENDRA PLACE,	FRN 304153E
NEW DELHI-110008
DATE : 30th May, 2016	(B.R. GOYAL)
	PARTNER
	M.NO. 12172

ANNEXURE "B"TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF RUNEECHA TEXTILES LIMITED

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

We have audited the internal financial controls over financial reporting of Runeecha TextilesLimited ("the Company") as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys 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". 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 companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143 (10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. 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 auditors judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls over Financial Reporting

A companys 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 companys 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 authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial Controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 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 Institute of Chartered Accountants of India"

PLACE OF SIGNATURE: N. Delhi	FOR K.N. GUTGUTIA & COMPANY
11-K, GOPALA TOWER	CHARTERED ACCOUNTANTS
25, RAJENDRA PLACE,	FRN 304153E
NEW DELHI-110008
DATE : 30th May, 2016	(B.R. GOYAL)
	PARTNER
	M.NO. 12172