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Sutlej Textiles and Industries Ltd.

BSE: 532782 | NSE: SUTLEJTEX |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE645H01027 | SECTOR: Textiles - General

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30-Day
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  • Open Price

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  • Offer Price (Qty.)

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Annual Report

For Year :
2018 2017 2016 2015 2014 2013 2011 2010 2009

Auditor's Report

We have audited the accompanying financial statements of SUTLEJ
TEXTILES AND INDUSTRIES LIMITED (the Company), which comprise the
Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss,
the Cash Flow Statement, and a summary of the significant accounting
policies and other explanatory information for the year then ended, in
which are incorporated the financial statements for the year ended on
that date audited by the branch auditor of the Company''s unit at Kathua
in the State of Jammu and Kashmir and Baddi in the State of Himachal
Pradesh.

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 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 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.

Auditors'' 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 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, 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 Companies Act, 2013 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 fows for the year ended on that date.

Other Matter

We did not audit the financial statements of Kathua and Baddi Units
included in the financial statements of the Company whose financial
statements reflect total assets of Rs.105262.85 lakhs as at 31st March,
2016 and total revenues of Rs.159807.05 lakhs for the year ended on
that date, as considered in the financial statements. The financial
statements of the Kathua and Baddi units have been audited by the
branch auditor whose reports have been furnished to us, and our opinion
in so far as it relates to the amounts and disclosures included in
respect of the branches, is based solely on the report of branch
auditor.

Our opinion is not modified in respect of this matter.


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 Companies Act, 2013 we give in
the Annexure A, 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 and proper returns adequate for the purposes of our audit
have been received from branches not visited by us.

(c) The reports on the accounts of the Kathua and Baddi units of the
Company audited under Section 143 (8) of the Act by branch auditor have
been sent to us and have been properly dealt with by us in preparing
this report.

(d) 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 and with the financial statements received from the
Kathua and Baddi units not visited by us.

(e) 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.

(f ) 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.

(g) With respect to the adequacy of the internal financial control over
financial reporting of the Company and the operating effectiveness of
such controls, refer to our separate Report in Annexure B .

(h) 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 7 and
18A(1&2) to the financial statements;

ii. The Company has made provision, as required under the applicable
law or accounting standards, for material foreseeable losses, on
long-term contracts including derivative contracts – Refer Note 20 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.


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

b. Fixed Assets have been physically verified by the management at
reasonable interval except in Bhilad unit, where major fixed assets
have been physically verified by the management during the year as per
regular programme of verification. No material discrepancies were
noticed on such verification.

c. According to information and explanations given by the management,
the title deeds of immovable properties included in fixed assets,
except immovable properties having original cost of Rs. 300.32 lakhs
(WDV as on 31st March, 2016 Rs. 271.65 lakhs) for which registration is
pending, are held in the name of the respective units. These title
deeds and possession letters have been given as security against the
term and other loans taken from banks and as informed to us the
original title deeds are kept with the lenders as security and
therefore same could not be made available for our verification.

(ii) As explained to us, inventories (except stock lying with third
parties ) were physically verified during the year by the management at
reasonable intervals during the year and no material discrepancies were
noticed on such physical verification.

(iii) The Company has granted unsecured loan to a company covered in
the register maintained under Section 189 of the Companies Act, 2013.
The terms and conditions of the grant of such loan is not prejudicial
to the interest of the Company. The Company has stipulated schedule of
repayment of principal and payment of interest and repayment of the
principal amount and receipt of interest are regular. The Company has
not granted any loan to firms, Limited Liability Partnerships or other
parties covered in the register maintained under section 189 of the
Companies Act, 2013.

(iv) The Company has complied with provisions of section 186 of the
Companies Act, 2013 in respect of loan granted and Investments made.
According to information and explanations given by the management, no
loan or guarantee or security under section 185 and no guarantee and
security under section 186 of the Companies Act, 2013 have given during
the year.

(v) The company has not received any deposit covered under section 76
of the Companies Act, 2013 during the year. Therefore, provisions of
clause 3(v) of the order are not applicable to the company.

(vi) We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules made by the Central Government for the
maintenance of cost records under section 148 (1)of the Companies Act,
2013 and are of the opinion that prima facie the prescribed accounts
and records have been made and maintained. We have not, however, made a
detailed examination of the same.

(vii) a. According to the records of the Company, the Company is
generally regular in depositing undisputed statutory dues including
Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax,
Service tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and
other material statutory dues deducted/accrued in the books, with the
appropriate authorities. There was no undisputed outstanding statutory
dues as at the yearend for a period of more than six months from the
date they became payable.

b. According to the records of the Company, there are no dues
outstanding of Income Tax, Sales Tax, Service Tax, Duty of Customs,
Duty of Excise and Value Added Tax on account of any dispute, other
than the followings:

Name of
Statute Nature of Dues Amount Forum where Related Period
(net of
paid) Dispute is
Pending
(Rs. in
lakhs)

The Central
Excise Act,
1944 Disallowances
& Penalty and
interest on 36.05 Commissioner
(Appeals),
Jaipur Oct., 05 to
Mar., 06
payment of
service tax
through Cenvat

The Central
Excise Act,
1944 Demand &
Penalty for
Service Tax 23.91 CESTAT,
New Delhi Dec.,05 to
Oct.,06

The Central
Excise Act,
1944 Penalty
against non-
reversal of
Cenvat 8.50 Rajasthan
High Court,
Jaipur May,99 to
Feb.,2002
credit on
exempted
goods
Rajasthan
Tax on
Entry of
Goods Entry Tax
and Interest 34.59 Supreme
Court, Delhi Apr., 06 to
Mar., 16
into
Local
Areas
Act,1999

Rajasthan
Electri
city (Duty)
Act, Demand of
Urban Cess
on purchase
of 258.30 Rajasthan
High Court,
Jaipur Apr 2010 to
Mar 16

1962 electricity

The Central
Excise
Act, 1944 Demand of
rebate
erroneously
granted 138.35 Additional
Commissioner
of 2008-2012
and paid by
Department Central
Excise,
Jammu

The Central
Excise Act,
1944 Demand
towards
Excise duty
on Textile 17.64 CESTAT,
New Delhi 2000– 2005
Committee
Cess

The Central
Excise Act,
1944 Excise duty
on Clea
rance of
Yarn at 23.66 High Court
of Jammu and 1995 – 1996
Single
Stage Kashmir,
Jammu

The Central
Excise Act,
1944 Excise
Duty on
Clearance
of Capital 22.40 CESTAT, New
Delhi 2009-2012
goods and
Scrap Sales,
interest
and
penalty
thereon

The Central
Excise Act,
1944 Demand of
rebate
erroneously
granted 365.01 Commissioner
of Central
Excise 2014-15
and paid by
Department (Appeals),
Chandigarh

Gujarat
Tax on
Entry of
Specified Entry Tax,
Penalty
and Inte
rest
thereon 1213.11 Commercial
Tax Officer,
Vapi Apr, 06 to
Mar, 16

Goods
into Local
Areas Act,
2001

Himachal
Pradesh
Tax on
Entry Entry
Tax on
purchase
of raw
material 508.29 High Court
of Himachal
Pradesh 2010-11 to 2015-16

of Goods
into Local
Area Act,
2010

The Central
Excise Act,
1944 Demand
towards
excise
duty on
textiles 52.52 Central
Excise &
Service Tax 2010-11

committee
cess Appellate
Tribunal,
New Delhi

(viii) The Company has not defaulted in repayment of dues to banks. The
Company did not have any outstanding loan from any financial
institution , Government and dues to debenture holders .

(ix) According to the information and explanations given to us, the
Company has not raised any monies by way of initial public offer or
further public offer (including debt instruments). Further in our
opinion and according to the explanations given to us, term loans were
applied for the purpose for which loans were raised.

(x) Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the financial statements and
according to the information and explanations given to us, we report
that no fraud by the Company or no fraud on the Company by the offers
and employees of the Company has been noticed or reported during the
year .

(xi) According to the information and explanations given by the
management, managerial remuneration has been paid / provided in
accordance with the requisite approvals mandated by the provisions of
section 197 read with schedule V to the Companies Act, 2013 except
commission Rs. 495 lakhs payable to Chairman and other directors for
which approval from shareholders are being taken in ensuing Annual
General Meeting.

(xii) In our opinion, the Company is not a Nidhi company. Therefore,
the provisions of clause 3(xii) of the order are not applicable to the
Company.

(xiii) According to the information and explanations given by the
management, transactions with the related parties are in compliance
with section 177 and 188 of the 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 by the
management, the Company has not made any preferential allotments or
private placement of shares or fully or partly convertible debentures
during the year under review.. Therefore, the provisions of clause
3(xiv) of the order are not applicable.

(xv) According to the information and explanations given by the
management, the Company has not entered into any non- cash transactions
with directors or persons connected with directors. Therefore, the
provisions of clause 3(xv) of the order are not applicable.

(xvi) In our opinion, the Company is not required to be registered
under section 45-IA of the Reserve Bank of India Act, 1934. Therefore,
the provisions of clause 3 (xvi) of the order are not applicable.


Report on the Internal Financial controls under Clause (i) of Sub -
section 3 of Section 143 of the Companies Act, 2013 (the Act) We have
audited the internal financial controls over financial reporting of
Sutlej Textiles and Industries Limited as of March 31, 2016 in
conjunction with our audit of the financial statements of the Company
for the year ended on that date.

Management''s Responsibility for Internal Financial Controls The
Company''s management is responsible for establishing and maintaining
internal financial controls based on the internal control over the
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
company''s 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.

Auditor''s Responsibility

Our responsibility is to express an opinion on the company''s 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
of 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 exist, and testing and
evaluating the design and operating effectiveness of internal control
based on the assessed risk. 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.

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

Meaning of Internal Financial Controls over Financial Reporting A
Company''s 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 company''s 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 authorization 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 company''s 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
controls 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
the 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.

For SINGHI & CO.

Chartered Accountants

Firm''s Reg. No.302049E

B. K. Sipani

Place : New Delhi Partner

Date : 11th May,2016 Membership No. 088926