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Kitex Garments

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« Mar 15
Auditor's Report (Kitex Garments) Year End : Mar '16
We have audited the accompanying financial statements of KITEX GARMENTS
 LIMITED (the Company), which comprise the Balance Sheet as at 31st
 March, 2016, the Statement of Profit and Loss, the Cash Flow Statement
 for the year then ended, and a summary of the Significant accounting
 policies and other explanatory information.
 
 Management''s Responsibility for the Financial Statements
 
 The Company''s 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 of these financial statements that give a true and
 fair view of the financial position, financial performance and cash
 fows 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 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
 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.
 
 An audit involves performing procedures to obtain audit evidence about
 the amounts and the disclosures in the financial statements. The
 procedures selected depend on the auditor''s judgment, including the
 assessment of the risks of material misstatement of the financial
 statements, whether due to fraud or error. In making those risk
 assessments, the auditor considers 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, but not for the purpose of expressing
 an opinion on whether the Company has in place an adequate internal
 financial controls system over financial reporting and the operating
 effectiveness of such controls.  An audit also includes evaluating the
 appropriateness of the accounting policies used and the reasonableness
 of the accounting estimates made by the Company''s Directors, as well as
 evaluating the overall presentation of the financial statements. We
 believe that the audit evidence we have obtained is sufficient and
 appropriate to provide a basis for our audit opinion on the financial
 statements.
 
 Opinion
 
 In our opinion and to the best of our information and according to the
 explanations given to us, the aforesaid financial statements give the
 information required by the Act in the manner so required and give a
 true and fair view in conformity with the accounting principles
 generally accepted in India, of the state of affairs of the Company as
 at 31st March, 2016, and its Profit and its 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, 2016 (the
 Order) issued by the Central Government of India in terms of
 sub-section (11) of section 143 of the Act, we give in the Annexure 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, 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 written representations received from the
 directors as on 31st March, 2016 taken on record by the Board of
 Directors, none of the directors is disqualified as on 31st March, 2016
 from being appointed as a director in terms of Section 164 (2) of the
 Act.
 
 (f) On the basis of the information and explanation of the Company
 provided to us, the internal financial control, framework the report of
 the internal auditors and in our opinion, the Company has adequate
 internal financial controls systems in place and the operating
 effectiveness of such controls.
 
 (g) With respect to the other matters to be included in the Auditor''s
 Report in accordance with Rule 11 of the Companies (Audit and Auditors)
 Rules, 2014, in our opinion and to the best of our information and
 according to the explanations given to us:
 
 i. The Company has disclosed the impact of pending litigations on its
 financial position in its financial statements- Refer Note 30 to the
 financial statements;
 
 ii. The Company did not have any long term contracts including
 derivative contracts for which there were any material foreseeable
 losses - Refer Note 40 to the financial statements;
 
 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 Auditors'' Report
 
 Referred to in Paragraph 1 of Report on Other Legal and Regulatory
 Requirements 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.
 
 (b) As explained to us, all the fixed assets have been physically
 verified by the management in a phased periodical manner, which in our
 opinion is reasonable, having regard to the size of the Company and
 nature of its assets. According to the information and explanations
 given to us, no material discrepancies were noticed on such physical
 verification.
 
 (c) According to the information and explanation given to us, the title
 deeds of immovable properties of the Company are held in the name of
 the Company.
 
 (ii) The inventories have been physically verified during the year by
 the management and in our opinion, the frequency of verification is
 reasonable.
 
 As explained to us, no material discrepancies were noticed on physical
 verification of inventories as compared to the book records.
 
 (iii) The Company has not granted any loans, secured or unsecured, to
 Companies, firms, Limited Liability Partnerships or other parities
 covered in the Register maintained under Section 189 of the Companies
 Act, 2013.
 
 (iv) In our opinion and according to the information and explanations
 given to us, the Company has complied with the provisions of Section
 185 and 186 of the Companies Act, 2013 in respect of loans,
 investments, guarantees and security.
 
 (v) In our opinion and according to the information and explanations
 given to us, the Company has not accepted any deposits during the year.
 Therefore, the provisions of clause 3 (v) of the Companies (Auditor''s
 Report) Order, 2016, are not applicable to the Company.
 
 (vi) According to the information and explanations given to us, the
 Central Government has prescribed maintenance of cost records under
 Section 148(1) of the Companies Act, 2013 in respect of manufacturing
 activities of the Company. We have broadly reviewed the accounts and
 records of the Company in this connection and are of the opinion, that
 prima facie, the prescribed accounts and records have been made and
 maintained. We have not, however, carried out a detailed examination of
 the same.
 
 (vii)
 
 (a) The Company is generally regular in depositing with the appropriate
 authorities undisputed statutory dues including provident fund,
 employees'' state insurance, income-tax, sales tax, service tax, customs
 duty, excise duty, value added tax, cess and any other material
 statutory dues applicable to the Company.
 
 According to the information and explanations given to us, no
 undisputed amounts payable in respect of the aforesaid dues were in
 arrears, as at 31.03.2016 for a period of more than six months from the
 date they became payable.
 
 (b) According to the information and explanations given to us, there
 are no dues of income-tax, sales tax, service tax, customs duty, excise
 duty and value added tax which have not been deposited on account of
 any dispute, except the following:
 
 
 Name of Statute      Nature of Dues     Amount
 
 Customs Act          Customs Duty       Rs.2,20,61,171 with simple 
                                         interest of 10% on Rs.99,31,229
                                         as per Settlement Commission
                                         Order (out of which
                                         Rs.2,20,61,171/- has been paid)
 
 Income Tax Act       Income tax         Rs.6,29,406/-
 
 Income Tax Act       Income tax         Rs.21,29,567/-
 
 Income Tax Act       Fringe Benefit 
                      tax                Rs.9,07,553/-
 
 Income Tax Act       Income tax 
                      Penalty            Rs.5,26,632/-
 
 Income Tax Act       Income tax         Rs.48,72,980/-
 
 Income Tax Act       Income tax 
                      Penalty            Rs.33,91,894/-
 
 Income Tax Act       Income tax         Rs.19,48,040/-
 
 Provident Fund Act   Provident Fund     Rs.1,31,86,588/-(Out of which
                                         Rs.55,75,087/- has been 
                                         deposited)
 
 Provident fund Act   Provident Fund     Rs.31,24,050/-(Out of which
                                         Rs.12,49,620/- has been paid)
 
 Provident Fund Act   Provident Fund 
                      - 3 cases          Rs.89,84,848/-
 
 Provident Fund Act   Provident Fund     Rs.66,67,450/-
 
 Provident fund Act   Provident Fund     Rs.14,78,145/- (Out of which
                                         Rs.4,43,444 has been paid)
 
 Employees State 
 Insurance Act        Employee State
                      Insurance          Rs.2,03,687/-(Out of which
                                         Rs.1,25,000/- has been
                                         deposited)
 
 Employees State 
 Insurance Act        Employee State 
                      Insurance          Rs.26,01,275/(Out of which
                                         the company has Deposited
                                         Rs.3,00,000/-)
 
 Employees State 
 Insurance Act        Employee State 
                      Insurance          Rs.2,79,558/ and related
                                         Interest of Rs.9,466 (Out
                                         of which the company has
                                         Deposited Rs.50,000)
 
 Employees State 
 Insurance Act        Employee State 
                      Insurance          Rs.8,63,348/(Out of which
                                         the company has Deposited
                                         Rs.1,00,000)
 
 Employees State 
 Insurance Act        Employees State 
                      Insurance          Rs.3,36,461/-(Out of which
                                         the Company has deposited
                                         Rs.84,115/-)
 
 Employees State 
 Insurance Act        Employees State 
                      Insurance          Rs.12,11,248/-(Out of which
                                         the Company has deposited 
                                         Rs.3,02,812/-)
 
 Employees State 
 Insurance Act        Employees State
                      Insurance          Rs.30,18,037/-(Out of which
                                         the Company has deposited 
                                         Rs.7,54,510/-)
 
 Kerala 
 Municipality 
 Act, 1994            One Time 
                      Building Tax       Rs.3,08,945/-
 read with Kerala 
 Building Rules,
 1999
 
 
 Name of statute      Period to which 
                      it Relates        Forum where Dispute is Pending
 
 Customs Act          FY 1997-98        Honourable Supreme Court of 
                                        India
 
 Income Tax Act       AY 2003-04 &
                      2004-05           Honourable High Court of Kerala
 
 Income Tax Act       AY 2005-06        Commissioner of Income
                                        Tax (Appeals)
 
 Income Tax Act       AY 2006-07        Commissioner of Income 
                                        Tax (Appeals)
 
 Income Tax Act       AY 2010-11        Commissioner of Income
                                        Tax (Appeals)
 
 Income Tax Act       AY 2011-12        Commissioner of Income 
                                        Tax (Appeals)
 
 Income Tax Act       AY 2011-12        Commissioner of Income 
                                        Tax (Appeals)
 
 Income Tax Act       AY 2012-13        Commissioner of Income
                                        Tax (Appeals)
 
 Provident Fund Act   FY 2001-02 to 
                      2005-06           Honourable High Court of 
                                        Kerala
 
 Provident Fund Act   For the Period 
                      August 2011 to 
                      March 2012        Employees Provident Fund
                                        Appellate Tribunal
 
 Provident Fund Act   For the various 
                      periods from 
                      April 2012        Regional Provident Fund
                      to April 2014     Commissioner, Kochi
 
 Provident Fund Act   For the Period 
                      June 2007 to 
                      October           Regional Provident Fund
                      2012              Commissioner, Kochi
 
 Provident Fund Act   For the period 
                      November 2012 to  The Regional Provident fund
                      April 2014        Commissioner.
 
 Employees State 
 Insurance Act        FY 1996-1997 
                      and 1997-98       The Director, ESI Regional 
                                        Office, Ernakulam
 
 Employees State 
 Insurance Act        FY 2008-09        Honourable ESI Court, Alappuzha
 
 Employees State 
 Insurance Act        FY 2008-09        Honourable ESI Court, Alappuzha
 
 Employees State 
 Insurance Act        FY 2008-09        Honourable ESI Court, Alappuzha
 
 Employees State 
 Insurance Act        For the period 
                      June 2005 2012    The Director Sub Regional 
                                        Office , ESI
                      to January 2009   Corporation
 
 Employees State 
 Insurance Act        For the period
                      April 2003 to 
                      March 2004        The Director Sub Regional 
                                        Office  ESI
                      2004              Corporation
 
 Employees State 
 Insurance Act        For the period 
                      April 2009 to     The Director Sub Regional
                                        Office , ESI
                      November 2009     Corporation
 
 Kerala Munici
 pality Act, 1994
 read with Kerala 
 Building Rules,
 1999                 1997              Honourable High Court of Kerala
 
 (viii) Based on our audit procedures and according to the information
 and explanations given to us, the Company has not defaulted in
 repayment of loans or borrowings to a financial institution, bank,
 Government or dues to debenture holders. There were no debenture
 holders at any time during the year.
 
 (ix) In our opinion, the term loans have been applied for the purposes
 for which they were raised. During the year, there were no moneys
 raised by way of initial public offer or further public offer.
 
 (x) To the best of our knowledge and belief and according to the
 information and explanations given to us, no material fraud on or by
 the Company by its officers or employees during the year was noticed or
 reported, nor have we been informed of such case by the management.
 
 (xi) In our opinion, the managerial remuneration has been paid or
 provided in accordance with the requisite approvals mandated by the
 provisions of Section 197 read with Schedule V to the Companies Act,
 2013.
 
 (xii) In our opinion, the Company is not a Nidhi Company. Therefore,
 the provisions of clause 3 (xii) of the Companies (Auditor''s Report)
 Order, 2016, are not applicable to the Company.
 
 (xiii) In our opinion, all transactions with the related parties are in
 compliance with Section 177 and 188 of Companies Act, 2013 where
 applicable and the details have been disclosed in the Financial
 statements as required by the applicable accounting standards.
 
 (xiv) According to the information and explanations given to us, the
 Company has not made any preferential allotment or private placement of
 shares or fully or partly convertible debentures during the year under
 review and therefore, the provisions of clause 3 (xiv) of the Companies
 (Auditor''s Report) Order, 2016, are not applicable to the Company.
 
 (xv) In our opinion and according to the information and explanations
 given to us, the Company has not entered into any non - cash
 transactions with directors or persons connected with the Directors.
 
 (xvi) In our opinion and according to the information and explanations
 given to us, the Company is not required to be registered under Section
 45-IAof the Reserve Bank of India Act, 1934.
 
                                                        For KOLATH & CO
 
                                                  Chartered Accountants
 
                                                 Firm Regn. No. 008926S
 
 
 
                                                                  Sd/-
 
                                               CA. Liju V.Rajan Kolath
 
                                                               Partner
  
                                                  Membership No.209309
 
 Kizhakkambalam 
 
 04.04.2016
Source : Dion Global Solutions Limited
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