We have audited the accompanying financial statements of Kavita Fabrics
Ltd, (The Company) which comprise the Balance Sheet as at March 31,
2015, and the Statement of Profit and Loss and Cash Flow Statement for
the year ended, and a summary of 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 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 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 the 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 the 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 internal financial control, 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.
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 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 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 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
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 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, 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.
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
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
(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
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards notified
under the Act read with the General Circular no 15/2013 dated September
13, 2013 of Ministry of Corporate Affairs in respect of Section 133 of
Companies Act, 2013
(e) On the basis of written representations received from the directors
as on March 31, 2015, and 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 sub-section (2) of section 164 of
ANNEXURE TO THEINDEPENDENT AUDITORS'' REPORT
(Referred to in paragraph 3 of our report of even date)
(i) In Respect of Fixed Assets:
1. The company has maintained proper records showing full particulars,
including quantitative details and Situation of the fixed assets.
2. As explained to us, the fixed assets have been physically verified
by the management at reasonable intervals and no material discrepancies
were noticed on such verification.
3. In our opinion company has not disposed off substantial parts of
fixed assets during the year and the going concern status of the
company has not affected.
(ii) In Respect of Stock:
4. The Company has carried out physical verification at reasonable
intervals commensurate to its size and nature of business and no
discrepancy has been found.
5. In our opinion and according to the explanations given to us, the
procedure of physical verification of the inventories followed by the
management is reasonable and adequate in relation to the size of
company and nature of business.
6. The company is maintaining proper records of inventory. As
explained to us, there were no material discrepancies noticed on
physical verification of inventories as compared to the book records.
(iii) In Respect of loans secured or unsecured, granted or taken by the
company to or from companies, firms or other parties covered in the
register maintained u/s 189 of the Act, According to the information
and explanation given to us, the company has not granted or taken any
secured or unsecured loans from or to companies, Firms, and other
parties listed in the register. Consequently the requirement of clauses
(iii) (a) to (iii) (b) of the order is not applicable.
(iv) In our opinion and explanation given to us, there is generally
adequate internal control procedure commensurate with the size of the
company and the nature of its business, with regard to purchase of
inventory and fixed assets and for sale of goods.
(v) In our opinion and according to the information and explanation
given to us, the company has not accepted deposits from the public
within the meaning of section 73 to 76 of the Act & directives issued
by the Reserve Bank of India.
(vi) Since the company is in textile sector therefore the provision of
clause (vi) of maintenance of cost record paragraph 4 of the order are
not applicable to the company.
(vii) The company is generally regular in depositing of undisputed
statutory dues. As informed to us there is no arrears of outstanding
statutory dues as at the last day of the financial year concerned for
the period of more than six months from the date they become payable.
Further it is explained to us Provident Fund, Investor Education and
Protection Fund, Employee''s State Insurance, Sales tax, Wealth tax,
Custom Duty, Excise Duty, cess are not applicable to the company during
There is no overdue balance of the amount, which is required to be
transferred to investor education and protection fund in accordance
with the relevant provisions of the Companies Act, 1956 (1 of 1956) and
rules made there under.
(viii) The company does not have accumulated losses of more than 50% of
its Net Worth at the end of the financial year; The Company has not
incurred cash losses in the current as well as in the previous
(ix) Based on our audit 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 financial institution, Banks.
(x) According to information and explanations given to us, the company
has not given guarantee for loans taken by others from banks or
(xi) The Company has a term loans from banks and outstanding as on 31st
March,2015 is as follows:
1. Kotak Mahindra Bank Term Loan Rs. 16,49,050/-
(xii) During the course of our examination of the books of account and
records of the company, carried out in accordance with the generally
accepted auditing practices in India, and according to the information
and explanation given to us, we have neither come across any instance
of material fraud on or by the company, noticed or reported during the
year, nor have we been informed of such case by the management.
For, Sanjay Maheshwari& Associates
Firm Reg No. : - 113289W
Place : Surat Partner
Date: May 10,2015 M. No. 046361