Mar 31, 2023
Independent Auditorâs Report
To the Members of Kitex Garments Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Kitex Garments Limited ("the Company"), which comprise
the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss and Statement of Cash Flows for the year then ended,
and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory
information.
In our opinion and to the best of our information and according to the explanations given to us , the aforesaid standalone financial
statements give the information required by the Companies Act, 2013 ("the Act'') in the manner so required and give a true and
fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with Companies (Indian
Accounting Standards) Rules, 2015 ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs
of the Company as at March 31, 2023, and profit , changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our
responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone
Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by
the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the
standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us
is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the standalone financial statements for the year ended March 31, 2023 (current year/period). These matters were
addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
Valuation of Inventory
Refer to Note 2.07 ''Inventories'' to consolidated financial statements
The total value of inventory as of March 31,2023, amounted to '' 11,693.28 lakhs representing 11.58 % of the total assets (March
31,2022: '' 15,453.49 Lakhs, 14.91% of the total assets). Inventories are measured the lower of cost and net realisable value.
The Company is an apparel manufacturer and exporter of knitted garments for infants and kids.
The valuation of raw material, semi-finished and finished goods is a comprehensive exercise and is carried out manually. Allocation
of indirect production costs is also estimated and loaded as inventory cost, as part of the valuation exercise. This allocation requires
judgment and estimation, which are uncertain at the time of such estimation.
Management also applies judgement in identification & determination of obsolete inventories and slow moving items of stocks and
estimates the appropriateness of requisite provisions thereon. On account of the subjective judgment and uncertainties involved
above, we considered this as a Key Audit Matter.
We have performed the following audit procedures in relation to Inventory valuation:
⢠Assessed the accounting policies relating to valuation of Inventory in compliance with Ind AS 2 ("Inventories");
⢠Assessed the management process of inventory valuation including allocation of overheads to inventory;
⢠Evaluated the design and implementation and tested the operative effectiveness of relevant internal controls pertaining to
valuation of inventory, including the process for write-down of obsolete inventory and the manual inventorisation of indirect
production costs.
⢠Assessed the adequacy and appropriateness of write-downs for excess and/or obsolete inventory in relation to the future
demand data, historical usage, historical accuracy of write-downs and management''s plans to utilise the inventory
⢠Evaluated the significant judgements and estimates made by Management in applying Company''s accounting policy in
relation to the manual inventorisation of indirect production costs.
⢠Assessed the adequacy and accuracy of disclosures in the standalone financial statements with respect to inventory in
accordance with respective accounting standards and framework.
Information Other than the Standalone Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors is responsible for the other information. The other information comprises the -Management
report, Director''s report along with annexures etc but does not include the standalone financial statements and our auditor''s
report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in
this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Company''s management and Board of Directors are responsible for the matters stated in section 134(5) of the Act with
respect to the preparation 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. This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding of 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 standalone financial statement that give a true and fair view and are free from material misstatement,
whether due to fraud or error.
In preparing the standalone financial statements, the management and Board of Directors are responsible for assessing the
Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has
no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
standalone financial statements.
We give in "Annexure A", a detailed description of Auditor''s responsibilities for Audit of the Standalone Financial Statements.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order"), issued by the Central Government of India
in terms of sub-section (11) of section 143 of the Act, we give in "Annexure B" 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 Statement of Cash Flow dealt with by this Report are in
agreement with the books of account.
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under
Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the
Board of Directors, none of the directors are disqualified as on March 31, 2023 from being appointed as a director in
terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the
Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure C".
(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 standalone financial statements
- Refer Note 2.40.1 to the standalone financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material
foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection
Fund by the Company
iv. (a) The Management has represented that, to the best of it''s knowledge and belief, as disclosed in the Note 2.45 to the
standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds
or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity''s,
including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the
Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever
by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.
(b) The Management has represented, that, to the best of it''s knowledge and belief, as disclosed in the Note 2.45 no funds
have been received by the Company from any person(s) or entity''s, including foreign entities (Funding Parties), with the
understanding, whether recorded in writing or otherwise, as on the date of this audit report, that the Company shall,
directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of
the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate
Beneficiaries.
v. Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances,
and according to the information and explanations provided to us by the Management in this regard nothing has come
to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e) as provided
under (iv) (a) and (b) above, contain any material misstatement
vi. Proviso to rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company w.e.f. April 01, 2023 only,
Hence reporting under this clause is not applicable.
vii. The Company has declared and paid dividend during the year which is in compliance with Section 123 of the Act.
3. In our opinion, according to information, explanations given to us, the remuneration paid by the Company to its directors is
within the limits laid prescribed under Section 197 of the Act and the rules thereunder.
For MSKA & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Partner
Place: Kizhakambalam, Kerala Membership No. 029409
Date: May 30,2023 UDIN: 23029409BGTMVR2027
Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Kitex Garments Limited (hereinafter referred to as "the Company"), comprising the Balance Sheet as at 31st March, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management''s Responsibility for the Standalone Ind AS Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (hereinafter referred to as "the Act") with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.
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 standalone Ind AS 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 standalone Ind AS financial statements based on our audit.
While conducting the 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 thereunder.
We conducted our audit of the standalone Ind AS financial statements 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 standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS 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 standalone Ind AS 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 standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 including the Ind AS, of the state of affairs of the Company as at 31st March, 2018, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Other Matters
The comparative financial information of the Company for the transition date opening balance sheet as at 1st April 2016 included in these standalone Ind AS financial statements, are based on the previously issued statutory financial statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report for the year ended 31st March 2016 dated 4th April 2016 expressed an unmodified opinion on those standalone financial statements, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS, which have been audited by us.
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 (hereinafter referred to as "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.
(c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as a director in terms of Section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls system with reference to financial statements reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B".
(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 standalone Ind AS financial statements - Refer Note No 2.37.1.1 to the standalone Ind AS financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR INDEPENDENT AUDITOR''S REPORT OF EVEN DATE ON THE STANDALONE IND AS FINANCIAL STATEMENTS OF KITEX GARMENTS LIMITED FOR THE YEAR ENDED 31st MARCH 2018
1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) We are informed that fixed assets have been physically verified by the management at reasonable intervals and that no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us, the records of the Company examined by us and the confirmation from financial lender in respect of title deeds deposited with them and based on the details of immovable properties furnished to us by the Company, the title deeds of the immovable properties are held in the name of the Company.
2. We are informed that the physical verification of inventory has been conducted at reasonable intervals by the management and that no material discrepancies were noticed on such verification.
3. According to the information and explanations given to us and the records of the company examined by us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the reporting requirements under clauses (iii) (a) to (c) of paragraph 3 of the Order are not applicable.
4. According to the information and explanations given to us and the records of the company examined by us, the company has not granted any loans or given any guarantee or security for which the provisions of sections 185 and 186 of the Act are applicable and the company has complied with the provisions of section 186 of the Act in respect of investments made by it.
5. The Company has not accepted any deposits from the public during the year and hence, the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder are not applicable.
6. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under Section 148 (1) of the Act for the company at this stage.
7. (a) As per the information and explanations given to us and according to our examination of the records of the Company, the Company has been generally regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, Goods and Service Tax, duty of customs, duty of excise, value added tax, cess and other statutory dues as applicable to the Company to the appropriate authorities during the year.
There are no arrears of undisputed statutory dues outstanding as on the last day of the financial year for a period of more than six months from the date on which they became payable.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no disputed amounts due to be deposited under Sales Tax, Service Tax, Duty of Excise and Value Added Tax and the following disputed demands of Income Tax and Duty of Customs have not been deposited with the authorities as at 31st March 2018:
Name of the statute |
Nature of the dues |
Amount (in Rs. Lakhs) |
Period to which the amount relates (Financial year) |
Forum where the dispute is pending |
The Customs Act, 1962 |
Customs duty and interest |
220.26 (Net of Rs. 99.31 Lakhs paid under protest) |
1996-97 to 1997-98 |
Honourable Supreme Court of India |
The Customs Act, 1962 |
Customs duty and interest |
2,558.19 |
2010-11 to 2017-18 |
Honourable High Court of Kerala |
Income Tax Act, 1961 |
Penalty |
33.91 |
2010-11 |
Commissioner of Income Tax (Appeals) |
8. In our opinion and according to the information and explanations given to us and the records of the Company examined by us, the Company has not defaulted in repayment of loans and borrowings to the banks. The company has not taken any loans or borrowing from Financial Institutions and Government or raised any money by way of issue of debentures.
9. According to the information and explanations given to us and the records of the Company examined by us, no money has been raised by way of initial public offer or further public offer (including debt instruments) and the term loan availed by the Company have been applied for the purpose for which the loan was obtained.
10. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have been informed of any such case by the Management.
11. According to the information and explanations given to us and the records of the Company examined by us, 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 Act.
12. The Company is not a Nidhi company. Accordingly, the reporting requirements under clause (xii) of paragraph 3 of the Order are not applicable.
13. According to the information and explanations given to us and the records of the Company examined by us, all transactions with the related parties are in compliance with Sections 177 and 188 of the Act where applicable and the details of such transactions have been disclosed in Note No 2.35 to the standalone Ind AS financial statements as required by the applicable accounting standards.
14. According to the information and explanations given to us and based on the examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
15. According to the information and explanations given to us and the records of the Company examined by us, the Company has not entered into any non-cash transactions with directors or persons connected with the directors. Accordingly, the reporting requirement under clause (xv) of paragraph 3 of the Order is not applicable.
16. According to the information and explanations given to us and the records of the Company examined by us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the reporting requirement under clause (xvi) of paragraph 3 of the Order is not applicable.
REFERRED TO IN PARAGRAPH 2(f) UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR INDEPENDENT AUDIT REPORT OF EVEN DATE ON THE STANDALONE IND AS FINANCIAL STATEMENTS OF KITEX GARMENTS LIMITED FOR THE YEAR ENDED 31ST MARCH 2018
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 system with reference to financial statements reporting of Kitex Garments Limited (hereinafter referred to as "the Company") as of March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Management''s Responsibility for Internal Financial Controls
The Board of Directors of the company is responsible for establishing and maintaining internal financial controls based on the internal controls with reference to financial statements 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 ("ICAI"). 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.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls system with reference to financial statements 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 system with reference to financial statements 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 with reference to financial statements reporting and their operating effectiveness. Our audit of internal financial controls system with reference to financial statements reporting included obtaining an understanding of internal financial controls system with reference to financial statements 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 auditor''s 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 Company''s internal financial controls system with reference to financial statements reporting.
Meaning of Internal Financial Controls with reference to Financial Statements reporting
A company''s internal financial controls system with reference to financial statements 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 controls system with reference to financial statements 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 authorisations of management and directors of the company, and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised 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 with reference to Financial Statements reporting
Because of the inherent limitations of internal financial controls system with reference to financial statements 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 system with reference to financial statements reporting to future periods are subject to the risk that the internal financial controls system with reference to financial statements 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 with reference to financial statements reporting and such internal financial controls system with reference to financial statements reporting were operating effectively as at March 31, 2018, based on the internal control with reference to financial statements 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.
Other Matters
As stated in Note No 2.38 to the standalone Ind AS Financial Statements, Software under development disclosed under ''Intangible assets under development'' represents expenditure on implementation of an integrated ERP System covering all functional areas/ transactions including inventories, which is in progress; and pending implementation of the same, the company has alternate internal controls over financial reporting in place. Our opinion is not modified in respect of this matter.
General Information
Kitex Garments Limited is a Public Company incorporated and domiciled in India having its registered office at Kizhakkambalam, Alwaye, Ernakulam- 683562, Kerala, India. Its shares are listed on the Bombay Stock Exchange and the National Stock Exchange. The Company is engaged in the manufacture of fabric and readymade garments.
For and on behalf of the Board of
Kitex Garments Limited
July 2, 2018
Kizhakkambalam Sabu M. Jacob
Chairman and Managing Director
(DIN: 00046016)
Mar 31, 2017
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Kitex Garments Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2017, 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.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation 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 provisions of the Act for safeguarding of 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.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone 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 thereunder.
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 auditorâs 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 Companyâs 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 accounting policies used and the reasonableness of the accounting estimates made by Companyâs 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 standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, 2017, 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 (Auditorâs Report) Order, 2016 (âthe Orderâ), issued by the Central Government of India in terms of subsection (11) of section 143 of the Companies Act, 2013, we give in the âAnnexure Aâ, 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 standalone 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, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) With respect to the adequacy of internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
(g) With respect to the other matters to be included in the Auditorâs 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 No 32.1 to the standalone financial statements.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016. Based on audit procedures and relying on the management representation, we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management - Refer Note No 17.3 to the standalone financial statements.
âANNEXURE Aâ
REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING âREPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTSâ OF OUR INDEPENDENT AUDITORâS REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF KITEX GARMENTS LIMITED FOR THE YEAR ENDED 31st MARCH 2017
1. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) We are informed that fixed assets have been physically verified by the management at reasonable intervals and that no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us, the records of the Company examined by us and the confirmation from financial lender in respect of title deeds deposited with them and based on the details of immovable properties furnished to us by the Company, the title deeds of the immovable properties are held in the name of the Company.
2. We are informed that the physical verification of inventory has been conducted at reasonable intervals by the management and that no material discrepancies were noticed on such verification.
3. According to the information and explanations given to us and the records of the company examined by us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the reporting requirements under clauses (iii) (a) to (c) of paragraph 3 of the Order are not applicable.
4. According to the information and explanations given to us and the records of the company examined by us, the company has not granted any loans or given any guarantee or security for which the provisions of sections 185 and 186 of the Act are applicable and the company has complied with the provisions of section 186 of the Act in respect of investments made by it.
5. The Company has not accepted any deposits from the public during the year and hence, the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder are not applicable.
6. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under Section 148 (1) of the Act for the company at this stage.
7. (a) As per the information and explanations given to us and according to our examination of the records of the Company, the Company has been generally regular in depositing undisputed statutory dues including provident fund, employeesâ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues as applicable to the Company to the appropriate authorities during the year, except for an instance of delay in remittance of income tax deducted at source and corporate dividend tax.
There are no arrears of undisputed statutory dues outstanding as on the last day of the financial year for a period of more than six months from the date on which they became payable.
(b) According to the information and explanations given to us and the records of the Company examined by us, there are no disputed amounts due to be deposited under Sales Tax, Service Tax, Duty of Excise and Value Added Tax and the following disputed demands of Income Tax and Duty of Customs have not been deposited with the authorities as at 31st March 2017:
Name of the statute |
Nature of the dues |
Amount (in Rs.) |
Period to which the amount relates (Financial year) |
Forum where the dispute is pending |
The Customs Act, 1962 |
Customs duty and interest |
22,026,174/-(Net of Rs.9,931,229/- paid under protest) |
1996-97 to 1997-98 |
Honourable Supreme Court of India |
The Customs Act, 1962 |
Customs duty and interest |
207,462,031/-* |
2011-12 to 2016-17 |
Honourable High Court of Kerala |
Income Tax Act, 1961 |
Penalty |
3,391,894/- |
2010-11 |
Commissioner of Income Tax (Appeals) |
*Includes amounts in respect of which the company has furnished bank guarantee to the customs authority.
8. In our opinion and according to the information and explanations given to us and the records of the Company examined by us, the Company has not defaulted in repayment of loans and borrowings to the banks. The company has not taken any loans or borrowing from Financial Institutions and Government or raised any money by way of issue of debentures.
9. According to the information and explanations given to us and the records of the Company examined by us, no money has been raised by way of initial public offer or further public offer (including debt instruments) and the term loan availed by the Company have been applied for the purpose for which the loan was obtained.
10. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have been informed of any such case by the Management.
11. As stated in Note No 31.2 to the standalone financial statements, necessary approval for increase in remuneration of whole time director Rs.286,171/- is being sought for at the ensuing Annual General Meeting. According to the information and explanations given to us and the records of the Company examined by us, 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 Act.
12. The Company is not a Nidhi company. Accordingly, the reporting requirements under clause (xii) of paragraph 3 of the Order are not applicable.
13. According to the information and explanations given to us and the records of the Company examined by us, all transactions with the related parties are in compliance with Sections 177 and 188 of the Act where applicable and the details of such transactions have been disclosed in Note No 31 to the standalone financial statements as required by the applicable accounting standards.
14. According to the information and explanations given to us and based on the examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
15. According to the information and explanations given to us and the records of the Company examined by us, the Company has not entered into any non-cash transactions with directors or persons connected with the directors. Accordingly, the reporting requirement under clause (xv) of paragraph 3 of the Order is not applicable.
16. According to the information and explanations given to us and the records of the Company examined by us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the reporting requirement under clause (xvi) of paragraph 3 of the Order is not applicable.
For VARMA & VARMA
(FRN: 004532S)
Sd/-
V. Sathyanarayanan
Partner
CHARTERED ACCOUNTANTS
Membership No. 21941
Place: Kizhakkambalam
Date: 28th April, 2017
Mar 31, 2015
We have audited the accompanying financial statements of KITEX GARMENTS
LIMITED ("the Company"), which comprise the Balance Sheet as at 31st
March, 2015, 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
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.
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, 2015, and its profit and its cash flows for the year
ended on that date.
Report on Other Legal and Regulatory Requirements
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
(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, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act.
(f) 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.
For KOLATH & CO
Chartered Accountants
Firm''s Registration No.008926S
Sd/-
CA Liju V Rajan Kolath
Kizhakkambalam Partner
04.04.2015 Membership No.209309
Mar 31, 2014
We have audited the accompanying financial statements of Kitex Garments
Limited ("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 then 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 notified under the Companies Act, 1956 (the
"Act") read with the General Circular 15/2013 dated 13th September 2013
of the Ministry of Corporate Affairs in respect of Section 133 of the
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.
Auditor''s Responsibility
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, but not for the
purpose of expressing an opinion on the effectiveness of the Company''s
internal control. 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.
Opinion
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:
(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 Companies Act, 1956 and
sub-section (11) of Section 143 of the Companies Act, 2013, 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
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 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 and records;
d. in our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement comply with the Accounting Standards notified under
the Companies Act, 1956 read with the General Circular 15/2013 dated
13th September 2013 of the Ministry of Corporate Affairs in respect of
Section 133 of the 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 Companies Act, 1956 and sub-section (2) of Section
164 of the Companies Act, 2013.
f. Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable 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) During the year, the Company has not disposed off a substantial
part of its fixed assets, which affect the going concern status of the
Company.
(ii)
(a) The inventories have been physically verified during the year by
the management. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
(c) In our opinion, the Company has maintained proper records of
inventories. As explained to us, no material discrepancies were noticed
on physical verification of inventories as compared to the book
records.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured, to/from Companies, firms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956 and
Section 189 of the Companies Act, 2013.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and also with regard to the
sale of goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weaknesses in internal
control system.
(v)
(a) In our opinion and according to the information and explanations
given to us, we are of the opinion that the transactions made in
pursuance of contracts or arrangements, that need to be entered in the
Register maintained under Section 301 of the Companies Act, 1956 and
Section 189 of the Companies Act, 2013, have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the Register maintained under Section 301 of
the Companies Act, 1956 and Section 189 of the Companies Act, 2013, and
exceeding the value of Rs. 5 Lakhs in respect of any party during the
year have been made at prices which are reasonable having regard to the
prevailing market prices at the relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
during the year. Therefore, the provisions of clause 4 (vi) of the
Companies (Auditor''s Report) Order, 2003, are not applicable to the
Company.
(vii) Internal Audit functions are carried out by the Internal Audit
Department of the Company and the same is reviewed by the Audit
Committee. In our opinion, the same can be considered as adequate.
(viii) According to the information and explanations given to us, the
Central Government has prescribed maintenance of cost records under
Section 209(1) (d) of the Companies Act, 1956 and Section 128 read with
Section 2(13) 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.
(ix)
(a) The Company is generally regular in depositing with the appropriate
authorities undisputed statutory dues including provident fund,
investor education and protection fund, employees'' state insurance,
income-tax, sales tax, wealth tax, service tax, customs duty, excise
duty, 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 31.03.2014 for a period of more than six months from the
date they became payable.
(b) According to the information and explanations given to us, the
following dues demanded by the relevant authority have not been
deposited on account of pending disputes:
Name of
Statute Nature of Dues Amount
(Rs.) Period to Forum where
which it Dispute is
Relates Pending
Customs
Act Customs Duty Rs.2,20,61,171
with simple
interest of FY 1997-98 Honorable
Supreme
10% on Rs.
99,31,229 as
per Settlement Court of
India
Commission
Order (out of
which Rs.
2,20,61,171/-
has been paid)
Income
Tax Act Income tax Rs.6,29,406/- AY 2003-04 Honorable
High
& 2004-05 Court of
Kerala
Income Tax
Act Income tax Rs.21,29,567/- AY 2005-06 Commissioner
of Income
Tax (Appeals)
Income Tax
Act Income tax Rs.8,68,593/- AY 2006-07 Commissioner
of Income
Tax (Appeals)
Income Tax
Act Fringe Benefit Rs.9,07,553/- AY 2006-07 Commissioner
of
tax Income Tax
(Appeals)
Income Tax
Act Income tax Rs.58,87,640/- AY 2009-10 Commissioner
of Income
Tax (Appeals)
Income Tax
Act Income tax Rs.48,72,980/- AY 2011-12 Commissioner
of Income
Tax (Appeals)
Provident
Fund Provident Fund Rs.1,31,86,
588/- (Out of
which FY 2001-02 Honorable
High
Act Rs.52,74,636/-
has been
deposited) to 2005-06 Court of
Kerala
Provident
Fund Provident Fund Rs.20,44,752/- For the Regional
Provident
Act Period Fund Commissioner,
April 2012 to Kochi
August 2012
Employees
State Employee State Rs.2,03,687/-
(Out of which FY 1996-1997 The Director
ESI
Insurance
Act Insurance Rs.1,25,000/-
has been
deposited) and 1997-98 Regional
Office,
Ernakulam
Employees
State Employee State Rs.5,61,692/-
(Out of which FY 1998 -99 Honorable
High
Insurance
Act Insurance Rs.2,15,791/-
has been
deposited) to 2001-02 Court of
Kerala
Employees
State Employee State Rs.26,01,275/-
(Out of which
the FY 2008-09 Honorable
ESI Court,
Insurance
Act Insurance company has
Deposited
Rs.3,00,000/-) Alapuzha
Employees
State Employee State Rs.2,79,558/-
and related
Interest of FY 2008-09 Honorable
ESI Court,
Insurance
Act Insurance Rs.9,466/-
(Out of which
the company Alapuzha
has
Deposited
Rs.50,000/-)
Employees
State Employee State Rs.8,63,348/
(Out of which
the FY 2008-09 Honorable
ESI Court,
Insurance
Act Insurance company has
Deposited
Rs.1,00,000/-) Alapuzha
Kerala One Time Rs.3,08,945/- 1997 Honorable
High
Municipa
lity Act, Building Tax Court of
Kerala
1994 read
with
Kerala
Building
Rules, 1999
(x) In our opinion, the Company does not have accumulated losses at the
end of the financial year. The Company has not incurred cash losses
during the financial year covered by the audit and in the immediately
preceding financial year.
(xi) Based on our audit procedures and according to the information and
explanations given to us, the Company has not defaulted in repayment of
dues to a financial institution, bank or debenture holders. There were
no debenture holders at any time during the year.
(xii) Based on our examination of documents and records and according
to the information and explanations given by the Management, the
Company has not granted 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 or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditor''s Report) Order, 2003, are not applicable to the
Company.
(xiv) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments. The investment made in
equity shares is held in its own name.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
(xvi) In our opinion, the term loans have been applied for the purposes
for which they were raised.
(xvii) According to the information and explanations given to us, and
on an overall examination of the Balance Sheet of the Company, we are
of the opinion that no funds raised on short term basis have been used
for long term investment.
(xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and Companies covered in the Register maintained under Section 301 of
the Companies Act, 1956 and Section 189 of the Companies Act, 2013.
(xix) The Company has not issued any debenture during the year.
Accordingly, the provisions of clause 4(xix) of the Companies
(Auditor''s Report) Order, 2003, are not applicable to the Company.
(xx) The Company has not raised money by public issues during the year
and hence the question of disclosure and verification of the end use of
such money does not arise.
(xxi) 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 during the year was noticed or reported, nor have we been
informed of such case by the management.
For KOLATH & CO
Chartered Accountants
Firm''s Registration Number 008926S
Sd/-
CA .Liju.V.Rajan Kolath
Ernakulam Partner
03.04.2014 Membership No.209309
Mar 31, 2013
We have audited the accompanying financial statements of Kitex Garments
Limited ("the Company"), which comprise the Balance Sheet as at March
31, 2013, and the Statement of Profit and Loss and Cash Flow Statement
for the year then 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 referred to in sub-section (3C) of Section
211 of the Companies Act, 1956 ("the Act"). 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.
Auditor''s Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our au- dit 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 procedure 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 as-
sessments, 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.
Opinion
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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013.
(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
audit;
b. in our opinion proper books of account as required by law have been
kept by the Company so far as ap- pears 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 Balance Sheet, Statement of Profit and Loss,
and Cash Flow Statement comply with the Accounting Standards referred
to in sub--section (3C) of Section 211 of the Companies Act, 1956;
e. on the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, from being
ap- pointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Companies Act, 1956.
f. Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
pre- scribing the manner in which such cess is to be paid, no cess is
due and payable by the Company.
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) During the year, the Company has not disposed off a substantial
part of its fixed assets, which affect the going concern status of the
Company.
(ii) (a) The inventories have been physically verified during the year
by the management. In our opinion, the frequency of verification is
reasonable.
(b) The procedures of physical verification of inventories followed by
the management are reasonable and ad- equate in relation to the size of
the Company and the nature of its business.
(c) In our opinion, the Company has maintained proper records of
inventories. As explained to us, no material discrepancies were noticed
on physical verification of inventories as compared to the book
records.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured, to/from Companies, firms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and also with regard to the
sale of goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weaknesses in internal
control system.
(v) (a) In our opinion and according to the information and
explanations given to us, we are of the opinion that the transactions
made in pursuance of contracts or arrangements, that need to be entered
in the Register maintained under Section 301 of the Companies Act,
1956, have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the Register maintained under Section 301 of
the Companies Act, 1956, and exceeding the value of Rs. 5 Lakhs in
respect of any party during the year have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not accept- ed any deposits from the
public during the year. Therefore, the provisions of clause 4 (vi) of
the Companies (Auditor''s Report) Order, 2003, are not applicable to the
Company.
(vii) The internal audit functions are carried out by the Internal
Audit Department of the Company and the same is reviewed by the Audit
Committee. In our opinion, the same can be considered as adequate.
(viii) According to the information and explanations given to us, the
Central Government has prescribed maintenance of cost records under
Section 209(1) (d) of the Companies Act, 1956 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.
(ix) (a) The Company is generally regular in depositing with the
appropriate authorities undisputed statutory dues including provident
fund, investor education and protection fund, employees'' state
insurance, income-tax, sales tax, wealth tax, service tax, customs
duty, excise duty, cess and any other material statutory dues ap-
plicable 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 31.03.2013 for a period of more than six months from the
date they became payable.
(b) According to the information and explanations given to us, the
following dues demanded by the relevant authority have not been
deposited on account of pending disputes:
Name of Statute Nature of Amount (Rs.) Period to Forum where
Dispute is
Dues which it Pending
Relates
Customs Act Customs 3,25,20,531/-
(out of which FY 1997-98 Honorable
Supreme
Duty Rs.1,21,29,9
42/- has been
paid) Court of
India
Income Tax Act Income Tax 6,29,406/- AY 2003-04 Honorable
High court
& 2004-05 of Kerala
Income Tax Act Income Tax 21,29,567/- AY 2005-06 Commissioner
of Income
Tax (Appeals)
Income Tax Act Income Tax 38,32,909/-
(Out of which AY 2006-07 Commissioner
of In
Rs.31,50,000/-
has been
deposited) come Tax
(Appeals)
Income Tax Act Fringe Ben- 9,07,553/- AY 2006-07 Commissioner
of In-
efit Tax come Tax
(Appeals)
Income Tax Act Income Tax 3,16,22,680/-
(Out of which AY 2008-09 Income Tax
Appellate
Rs.1,17,57,862
has been
deposited) Tribunal,
Kochi
Income Tax Act Income Tax 58,87,640/- AY 2009-10 Commissioner
of Income
Tax (Appeals)
Provident Fund Provident 1,31,86,588/-
(Out of which FY 2001-02 Honorable
High Court
Act Fund Rs.52,74,636/-
has been
deposited) to 2005-06 of Kerala
Employees Employee 3,66,333/-
with interest
of 2,69,330 FY 1996-1997 The Director
ESI Region-
State
Insurance State
Insur- up to
30.11.2003
(Out of which and 1997-98 al Office,
Ernakulam
Act ance Rs.75,000/-
has been
deposited)
Employees Employee 5,61,692/-
(Out of which FY 1998 -99 Honorable
High Court
State
Insurance State
Insur- Rs.2,15,791/-
has been
deposited) to 2001-02 of Kerala
Act ance
Employees Employee 57,72,341/-
(Out of which 2003 to 2009 Honorable
ESI Court
State
Insurance State
Insur- Rs.15,00,000/-
has been
deposited)
Act ance
Kerala Mu- One Time 3,08,945/- 1997 Honorable
High Court
nicipality Act, Building Tax of Kerala
1994 read with
Kerala
Building
Rules, 1999
(x) In our opinion, the Company does not have accumulated losses at the
end of the financial year. The Com- pany has not incurred cash losses
during the financial year covered by the audit and in the immediately
preceding financial year.
(xi) Based on our audit procedures and according to the information and
explanations given to us, the Com- pany has not defaulted in repayment
of dues to a financial institution, bank or debenture holders. There
were no debenture holders at any time during the year.
(xii) Based on our examination of documents and records and according
to the information and explanations given by the Management, the
Company has not granted 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 or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditor''s Report) Order, 2003, are not applicable to the
Company.
(xiv) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments. The investment made in
equity shares is held in its own name.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
(xvi) In our opinion, the term loans have been applied for the purposes
for which they were raised.
(xvii) According to the information and explanations given to us, and
on an overall examination of the Balance Sheet of the Company, we are
of the opinion that no funds raised on short term basis have been used
for long term investment.
(xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and Companies covered in the Register maintained under Section 301 of
the Companies Act, 1956.
(xix) The Company has not issued any debenture during the year.
Accordingly, the provisions of clause 4(xix) of the Companies
(Auditor''s Report) Order, 2003, are not applicable to the Company.
(xx) The Company has not raised money by public issues during the year
and hence the question of disclosure and verification of the end use of
such money does not arise.
(xxi) 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 during the year was noticed or reported, nor have we been
informed of such case by the management.
For KOLATH & CO
Chartered Accountants
Firm''s Registration Number 008926S
Sd/-
CA. Liju V.Rajan Kolath
Partner
Membership Number 209309
Ernakulam
04.04.2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of KITEX GARMENTS
LIMITED, as at 31st March, 2012, the Profit and Loss Account and also
the Cash Flow Statement of the Company for the year ended on that date,
both annexed thereto. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with Auditing Standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditor's Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to in Paragraph 3
above, we report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) 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 books;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet, Profit and Loss Account and
Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956;
(v) On the basis of written representations received from the
Directors, as on 31st March, 2012, and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March, 2012 from being appointed as a director in terms of clause
(g) of sub-section (1) of Section 274 of the Companies Act, 1956;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said ac- counts give the information
required by the Companies Act, 1956, 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 31st March, 2012;
(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.
Annexure to Auditors' Report
Referred to in Paragraph 3 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) During the year, the Company has not disposed off a substantial
part of its fixed assets, which affect the going concern status of the
Company.
(ii) (a) The inventories have been physically verified during the year
by the management. In our opinion, the free- quench of verification is
reasonable.
(b) The procedures of physical verification of inventories followed by
the management are reasonable and ad- equate in relation to the size of
the Company and the nature of its business.
(c) In our opinion, the Company has maintained proper records of
inventories. As explained to us, no material discrepancies were noticed
on physical verification of inventories as compared to the book
records.
(iii) The Company has neither granted nor taken any loans, secured or
unsecured, to/from Companies, firms or other parties covered in the
Register maintained under Section 301 of the Companies Act, 1956.
(iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business with regard
to purchase of inventory and fixed assets and also with regard to the
sale of goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weaknesses in internal
control system.
(v) (a) In our opinion and according to the information and
explanations given to us, we are of the opinion that the transactions
made in pursuance of contracts or arrangements, that need to be entered
in the Register maintained under Section 301 of the Companies Act,
1956, have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the Register maintained under Section 301 of
the Companies Act, 1956, and exceeding the value of Rs. 5 Lakhs in
respect of any party during the year have been made at prices which are
reasonable having regard to the prevailing market prices at the
relevant time.
(vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
during the year. Therefore, the provisions of clause 4 (vi) of the
Companies (Auditor's Report) Order, 2003, are not applicable to the
Company.
(vii) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
(viii) According to the information and explanations given to us, the
Central Government has prescribed maintenance of cost records under
Section 209(1) (d) of the Companies Act, 1956 in respect of certain
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.
(ix) (a) The Company is generally regular in depositing with the
appropriate authorities undisputed statutory dues including provident
fund, investor education and protection fund, employees' state
insurance, income-tax, sales tax, wealth tax, service tax, customs
duty, excise duty, 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 31.03.2012 for a period of more than six months from the
date they became payable.
(b) According to the information and explanations given to us, the
following dues demanded by the relevant authority have not been
deposited on account of pending disputes:
Name of
Statute Nature of
Dues Amount (Rs.) period to
which it Forum where
Dis-
Relates
pute is
Pending
Customs
Act Customs
Duty 3,25,20,531/- 1997-98 Honourable
High
(out of which Court of
Kerala
Rs.1,21,29,942/-
has been paid)
Income
Tax Act Income Tax 6,29,406/- AY 2003-04
& 2004- Honourable
High
05 court of
Kerala
Income
Tax Act Income Tax 38,32,909/- AY 2006-07 Commissioner
of
(Out of which Income Tax
(Ap-
Rs.31,50,000/-
has peals)
been
deposited)
Income
Tax Act Income Tax 23,93,497/- AY 2007-08 Deputy
Commissioner
of Income
Tax
Income
Tax Act Income Tax 3,16,22,680/-
(Out of AY 2008-09 Commissioner
of
which
Rs.1,56,06,500 Income Tax
(Ap-
has been
deposited) peals)
Provident
Fund Act Provident
Fund 1,31,86,588/- 2001-02 to
2005-06 Honourable
High
(Out of which Court of
Kerala
Rs.52,74,636/-
has been
deposited)
Employees
State In- Employee
State 3.66 Lakhs
(Out of 1996 - 1997
and ESI Inspector
surance
Act Insurance which
Rs.75,000/- 1997-98
has been
deposited)
Employees
State
In- Employee
State 5.62 Lakhs
(Out of 1998 -99 to
2001-02. Honourable
High
surance
Act Insurance which
Rs.50,000/- Court of
Kerala
has been
deposited)
Employees
State In- Employee
State 57,72,341/- 2003 to 2009 Honourable
ESI
surance
Act Insurance (Out of
which Court
Rs.15,00,000/-
has been
deposited)
(x) In our opinion, the Company does not have accumulated losses at the
end of the financial year. The Company has not incurred cash losses
during the financial year covered by the audit and in the immediately
preceding financial year.
(xi) Based on our audit procedures and according to the information and
explanations given to us, the Company has not defaulted in repayment of
dues to a financial institution, bank or debenture holders. There were
no debenture holders at any time during the year.
(xii) Based on our examination of documents and records and according
to the information and explanations given by the Management, the
Company has not granted 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 or a nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4(xiii) of
the Companies (Auditor's Report) Order, 2003, are not applicable to the
Company.
(xiv) In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments. The investment made in
equity shares is held in its own name.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions.
(xvi) In our opinion, the term loans have been applied for the purposes
for which they were raised.
(xvii) According to the information and explanations given to us, and
on an overall examination of the Balance Sheet of the Company, we are
of the opinion that no funds raised on short term basis have been used
for long term investment.
(xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares to parties
and Companies covered in the Register maintained under Section 301 of
the Companies Act, 1956.
(xix) The Company has not issued any debenture during the year.
Accordingly, the provisions of clause 4(xix) of the Companies
(Auditor's Report) Order, 2003, are not applicable to the Company.
(xx) The Company has not raised money by public issues during the year
and hence the question of disclosure and verification of the end use of
such money does not arise.
(xxi) 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 during the year was noticed or reported, nor have we been
informed of such case by the management.
For KOLATH & CO
Chartered Accountants
Firm Regn. No. 008926S
Sd/-
CA. Liju V.Rajan Kolath
Partner
Membership No. 209309
Ernakulam
20.04.2012
Mar 31, 2010
1. We have audited the attached Balance Sheet of M/s. KITEX GARMENTS
LIMITED, as at 31st March, 2010, the Profit and Loss Account and the
Cash Flow Statement for the year ended on that date annexed thereto, in
which are incorporated the returns from Taipei Branch audited by a
member of Taipei Certified Public Accountants as Branch auditor,
appointed by the Company. These financial statements are the
responsibility of the companys management. Our responsibility is to
express an opinion on these financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003, as
amended, issued by the Central Government of India in terms of Section
227(4A) of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(i) We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
audit;
(ii) 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 books and proper returns adequate for the purpose of our audit
have been received from Taipei branch. The Branch Auditors Report on
the accounts of Taipei branch has been forwarded to us and have been
suitably dealt with by us in preparing this report;
(iii) The Balance Sheet, Profit and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account and with the audited returns from the branch;
(iv) In our opinion, the Balance Sheet, Profit and Loss Account and
Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in Section 211 (3C) of the Companies
Act, 1956;
(v) On the basis of written representations received from the
directors, as on 31st March, 2010 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31st March, 2010 from being appointed as a director in terms of section
274 (l)(g) of the Companies Act, 1956;
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts read together with the
notes and schedules attached thereto give the information required by
the Companies Act, 1956, 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 31st March, 2010;
(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.
Annexure referred to in paragraph 3 of the Auditors Report of even
date to the members of the KITEX GARMENTS LIMITED on the Accounts for
the year ended on 31st March,2010.
On the basis of such checks as we considered appropriate and according
to the information and explanations given to us by the management, we
report that: -
(i) Fixed Assets:
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 during
the year and no material discrepancies have been noticed on such
verification.
c) In our opinion, substantial part of the fixed assets of the Company
have not been disposed off during the year. (ii) Inventories:
a) The inventories have been physically verified by the management
during the year. In our opinion the frequency of verification is
reasonable.
b) In our opinion, the procedures of physical verification followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
c) In our opinion, the company is maintaining proper records of
inventories and no material discrepancies have been noticed on physical
verification.
(iii) Loans taken/granted:
The Company has neither granted nor taken any loans secured or
unsecured to / from Companies, firms or other parties listed in the
register maintained under section 301 of the Companies Act, 1956.
(iv) Internal Control
In our opinion, there are adequate internal control systems
commensurate with the size of the company and the nature of its
business with regard to purchase of inventory, fixed assets and sale of
goods and services. During the course of our audit, we have not noticed
any major weakness in the internal control system.
(v) Section 301
a) In our, opinion and according to the information and explanations
given to us, the particulars of contracts or arrangements that need to
be entered in the register maintained under section 301 have been so
entered.
b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the registers maintained under Section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lakhs in
respect of any party during the year have been made at prices which are
reasonable having regard to prevailing market prices at the relevant
time.
(vi) Deposit from Public
In our opinion, since the Company has not accepted any deposits from
the public during the year, clause 4(vi) of the order is not applicable
to the Company.
(vii) Internal Audit
In our opinion, the company has an internal audit system commensurate
with the size and nature of its business.
(viii) Cost Records
We are informed that the Central Government has prescribed maintenance
of cost records by the company under section 209 (1) (d) of the Act. In
our opinion and according to the information provided to us we are of
the view that the prescribed accounts and records have been made and
maintained. However, we have not made detailed examination of the
records with a view to determine whether they are accurate and
complete.
(ix) Payment of Statutory dues
(a) In our opinion and according to the information and explanation
given to us, the company was generally regular in depositing undisputed
statutory dues including Provident Fund, Employees State Insurance,
Income tax, Sales tax, Service Tax, Customs duty, Cess and other
material statutory dues as applicable with appropriate authorities
during the year. We are informed that the excise duty is not applicable
for companys product.
In our opinion, no undisputed arrears of statutory dues are outstanding
as on 31st March, 2010 for a period of more than six months from the
date they become payable.
(b) According to the information and explanation given and as per the
records produced to us, as at the year end following dues demanded by
the relevant authority have not been deposited on account of pending
disputes.
Name of Nature of the Amount (Rs)
Statute dues
Customs Act Customs Duty 3,25,20,531/-
(out of which
Rs. 1,21,29,942/- has
been paid
Customs Act Customs Duty 27,52,846/- (out of
which Rs.5,00,000/
has been deposited)
Income Tax Income Tax 12,23,097/-(out of
Act, 1961 which Rs. 1,00,000/
has been deposited)
Income tax Act Income Tax 6,29,406
Income tax Act Income Tax 38,32,909/- (Out of
which Rs.24,50,000/
has been deposited
Income tax Act Income Tax 23,93,497
Provident Provident Fund 1,31,86,588 (Out of
Fund Act which Rs.52,74,636/-
has been deposited)
Employees Employee State 6.11 Lacs (Out of
State Insurance
Act Insurance which Rs.50,000/- has
been deposited)
Name of Statue Period to Forum where disputed
which it
relates
Customs Act FY 1997-98 Honorable High Court
of Kerala
Customs Act AY 2004-05 Honorable High Court
of Kerala
Income Tax
Act, 1961 AY 1999-00, Income Tax Appellate
00-01 & 02-03. Tribunal
Income tax Act AY 2003-04 Hon. High Court of
& 2004-05.Kerela
Income tax Act AY 2006-07. Commissioner of
Income Tax (Appeals)
Income tax Act AY 2007-08 Dy.Commissioner of
Income Tax
Provident
Fund Act FY 1999-00 to Provident Fund
2005-06 Appellate Tribunal.
Employees
State Insurance Act FY 1999-00 to Honorable ESI Court.
2001-02.
(x) Accumulated Losses/ Cash losses
The company has no accumulated losses as at 31st March 2010 and it has
not incurred any cash losses in the financial year ended on that date
or in the immediately preceding financial year.
(xi) Default in repayment of Dues
In our opinion and according to the records produced to us, the company
has not defaulted in repayment of dues to any financial institution or
bank as at the balance sheet date.
(xii) Grant of Secured Loans & Advances
In our opinion the company has not granted any loan and advance on the
basis of security by way of pledge of shares, debentures and such other
securities during the year.
(xiii) Special Statute Chit Fund companies, Nidhis/Mutual benefit
fund/societies
In our opinion, the provisions of special statue applicable to a chit
fund or nidhi/mutual benefit fund/ society are not applicable to the
Company for the year under review.
(xiv) Company dealing or Trading in shares, securities etc.
In our opinion the company has not dealt in or traded in shares,
securities, debentures and other investments during the year under
review. The investment made in equity share is held in its own name.
(xv) Provision of Guarantee
In our opinion and according to the explanations given, the Company has
not given any guarantees for loans taken by others from banks or
financial institutions.
(xvi) Term Loans
In our opinion and according to the explanations given, on an overall
basis the term loans were applied for the purpose for which they were
raised.
(xvii) Usage of Funds
On the basis of an overall examination of the balance sheet of the
company, in our opinion, funds raised on Short Term basis have not been
used for Long Term investment.
(xviii) Preferential Allotments
The Company has not made any preferential allotment of shares to
parties and companies listed in the register maintained under section
301 of the Companies Act, 1956 during the year under review.
(xix) Creation of security for Debenture Issue
The company has not issued any Debentures.
(xx) Disclosure of End-use of Funds
During the year under review the Company has not raised any money
through public issue.
(xxi) Frauds
On the basis of information and explanation given during the course of
our audit, we report that we have neither come across nor have been
informed of any material fraud on or by the company noticed or reported
during the year under review.
For and on behalf of
VENKIT AND HARI
Chartered Accountants
FRN.004662S
Sd/-
Kochi T.A.VENKITACHALAM
27th November, 2010. Parmer - M.No.21585