We have audited the accompanying financial statements of Kavita Fabrics
Ltd, (The Company) which comprise the Balance Sheet as at March 31,
2014, 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
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 generally accepted in India including
Accounting Standards notified under the Companies Act, 1956 (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. 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.
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.
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, 2014;
(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 (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
(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, 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 Act.
Referred to in paragraph having reference to Report on Other Legal and
Regulatory Requirements of our report of even date on the financial
statements for the year ended 31st March 2014 on the basis of test
checks as were considered appropriate and according to the records of
the company and information and explanation given to us during the
course of audit, we report that -(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:
1. The Company has carried out physical verification at reasonable
intervals commensurate to its size and nature of business and no
discrepancy has been found.
2. 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.
3. 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 301 of the Companies Act 1956, According to the
information and explanation given to us, the company has not taken nor
given any secured or unsecured loans from companies, Firms, and other
parties listed in the register.
(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) According to information given to us there are transactions during
the period that need to be entered into a register in pursuance of
section 301 of the Act and the same had been maintained in the register
(vi) 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 58A and 58AA of the Companies Act, 1956.
(vii) In our opinion, the company has an internal audit system
commensurate with its size and nature of its business.
(viii) The Central Government has not prescribed maintenance of cost
records under clause (d) of sub section (1) of section 209 of the Act.
(ix) The company is 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 the year.
(x) 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
(xi) 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.
(xii) According to the information and explanation given to us 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 the company is not a chit fund/nidhi /mutual
benefit fund /society therefore the provision of clause (xiii) of
paragraph 4 of the order are not applicable to the company.
(xiv) In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments as such provisions
of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are
not applicable to the Company.
(xv) According to information and explanations given to us, the company
has not given guarantee for loans taken by others from banks or
(xvi) The Company has a term loans from banks and outstanding as on
31st March,2014 is as follows: 1. Kotak Mahindra Bank Term Loan
(xvii) According to the information and explanation given to us and on
an overall examination of the Balance Sheet of the company we report
that no funds raised on short term basis have been used for long term
investment by the company.
(xviii) The company has not made preferential allotment of shares to
parties and company covered in the register maintained under section
301 of the company Act 1956 .
(xix) The company has not issued any debentures during the year.
(xx) No funds were raised through public issue during the year.
(xxi) 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: 27/05/2014 M. No. 046361