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Eurotex Industries and Exports Ltd.

BSE: 521014 Sector: Industrials
NSE: EUROTEXIND ISIN Code: INE022C01012
BSE LIVE 14:04 | 23 Nov 37.35 -0.70
(-1.84%)
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38.50

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NSE 12:59 | 23 Nov 38.00 -1.65
(-4.16%)
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37.70

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OPEN 38.50
PREVIOUS CLOSE 38.05
VOLUME 1500
52-Week high 51.00
52-Week low 25.30
P/E
Mkt Cap.(Rs cr) 33
Buy Price 37.35
Buy Qty 100.00
Sell Price 38.95
Sell Qty 100.00
OPEN 38.50
CLOSE 38.05
VOLUME 1500
52-Week high 51.00
52-Week low 25.30
P/E
Mkt Cap.(Rs cr) 33
Buy Price 37.35
Buy Qty 100.00
Sell Price 38.95
Sell Qty 100.00

Eurotex Industries and Exports Ltd. (EUROTEXIND) - Auditors Report

Company auditors report

TO

THE MEMBERS OF EUROTEX INDUSTRIES AND EXPORTS LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of EUROTEX INDUSTRIES ANDEXPORTS LIMITED ("the Company") which comprise the Balance Sheet as at 31stMarch 2016 the Statement of Profit and Loss the Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the Accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresposibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgements and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevent to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder. We conducted our audit in accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequired that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement. An audit involves performing procedures to obtain audit evidence about theamounts and the disclosures in the financial statements. The procedures selected depend onthe auditor’s judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial control relevant to theCompany’s preparation of the financial statements that give a true and fair view inorder to design audit procedures that are appropriate in the circumstances.

An audit also includes evaluating the appropriateness of the accounting policies usedand the reasonableness of the accounting estimates made by the Company’s Directorsas well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide 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 explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2016 and its loss and cash flows for the year ended on that date.

Emphasis of matter

Without qualifying we draw your attention to the fact that the financial statementshave been prepared on a going concern basis which contemplates the realization of assetsand the satisfaction of liabilities in the normal course of business although the Companyhas incurred cash loss during the current year losses during the previous year and thatsubsequent to the year end Company has declared lock out due to labour unrest. Asexplained by the management steps have been taken with regard to settlement with thelabour union and that they are confident of commencing manufacturing operations shortlyand accordingly these financial statements have been prepared on a Going Concernbasis.(Refer Note no.26(15) of the financial statements for the year ended 31st March2016)

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in the "Annexure A" statement on the mattersspecified in paragraphs 3 of the Order to the extent applicable.

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 bestof 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 theCompany 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 Statementdealt with by this Report are in agreement with the books of account.

(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

(e) The going concern matter described under Emphasis of Matter paragraph above in ouropinion may have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from the Directors as on 31stMarch 2016 taken on record by the Board of Directors none of the Directors isdisqualified as on 31st March 2016 from being appointed as a Director in terms of Section164(2) of the Act.

(g) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

(h) With respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us: I TheCompany has disclosed the impact of pending litigations on its financial position in itsfinancial statements - Refer Note No. 26(1) to the financial statements.

II The Company did not have material foreseeable losses on long term contractsincluding derivative contracts.

III There is no amount required to be transferred to the Investor Education andProtection Fund by the Company.

For LODHA & CO.
Chartered Accountants
(R. P. BARADIYA)
Partner
Place : Mumbai (M. No. 44101)
Date : 21st May 2016 Firm Regn. No. 301051E

"ANNEXURE A"

ANNEXURE REFERRED TO IN PARAGRAPH "REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS" OF OUR REPORT TO THE MEMBERS OF "THE COMPANY" FOR THE YEARENDED 31ST MARCH 2016

On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we state that: 1.a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets. b) The fixed assets have been verifiedin accordance with a phased program designed to cover all assets once in three years. Thefrequency of verification is considered reasonable having regard to the size of the

Company and nature of its fixed assets. Pursuant to the program physical verificationof fixed assets has been carried out during the year and no material discrepancies werenoticed on such verification. c) Based on the information and explanations given to usthe title deeds of immovable properties are held in the name of the Company.

2. The inventory has been physically verified by the management at reasonable intervalsduring the year. The procedures of physical verification of the inventories followed bythe management are reasonable and adequate in relation to the size of the Company and thenature of its business. As per the information and explanations given to us discrepanciesnoticed on physical verification between the physical stocks and book records were notmaterial considering the operations of the Company and have been properly dealt with inthe books of account.

3. The Company has not granted any loans secured or unsecured to Companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Act. Accordingly the provisions of Clause 3(iii) of the Order are notapplicable to the Company.

4. The Company has not granted any loans guarantees and security to parties covered inSection 185 of the Act. The provisions of Section 186 of the Act have been complied inrespect of investments.

5. No deposits within the meaning of directives issued by RBI (Reserve Bank of India)and Sections 73 to 76 or any other relevant provisions of the Act and Rules framedthereunder have been accepted by the Company.

6. On the basis of records produced we are of the opinion that prima facie the costrecords and accounts prescribed by the Central Government under Section 148(1) of the Acthave been maintained. However we are not required to and thus have not carried out anydetailed examination of such accounts and records with a view to ascertain whether theseare accurate and complete.

7. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company is generally regular indepositing undisputed statutory dues including Provident Fund Employee’s StateInsurance Income Tax Sales Tax Service Tax Duty of Customs Duty of Excise ValueAdded Tax Cess and other statutory dues applicable to the Company with appropriateauthorities. No undisputed amount payable in respect of the aforesaid statutory dues wereoutstanding as at the last day of the financial year for a period of more than six monthsfrom the date they became payable. (b) According to the information and explanations givento us and on the basis of our examination of the records of the Company there are no duesof Income Tax Sales Tax Service Tax Duty of Customs Duty of Excise Value Added TaxCess which have not been deposited on account of any dispute except those mentioned in thetable below:

Name of the Statute Nature of Dues Period to which it relates Amount in Rs. Forum where dispute is Pending
The Custom Act 1962 Cenvat Duty & Penalty 2006-07 & 2007-08 13107968 Custom Excise and Service Tax Appellate Tribu- nal (CESTAT) Mumbai
The Central Excise Act 1944 Excise Duty & Penalty 2001-02 3073840 Custom Excise and Service Tax Appellate Tribu- nal (CESTAT) Mumbai.
2005-06 133907368
2001-02 200827 Supreme Court of India
The Bombay Sales Tax Act 1959/ Central Sales Tax 2001-02 5122933 Deputy Commi- ssioner of Sales Tax (Appeal) Kolhapur
Sales Tax 2006-07 11328290 Maharashtra Sales Tax Tribu- nal Mumbai. Joint Commissi- oner of Sales Tax (Appeal) Kolhapur.
Act 1956 2007-08 3970230
2009-10 5900594
The Income Tax Act 1961 Income Tax 2013-14 13381890 CIT (A)
2014-15 698565 CIT (A)

8. During the year the Company has not defaulted in repayment of loans or borrowingsto financial institution and banks during the year.

9. The Company has not raised any money by way of public issue or further public offerduring the year or in the recent past. Based on the information and explanations given tous by the management term loans were applied for the purpose for which the loans wereobtained.

10. During the course of our examination of the books and records of the Companycarried out in accordance with the Generally Accepted Auditing Practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud by or on the Company by its officers or employees noticed or reportedduring the year nor have we been informed of such cases by the management.

11. Managerial Remuneration has been paid or provided during the year in accordancewith the requisite approvals mandated by the provisions of Section 197 read with ScheduleV of the Act 12. In our Opinion the Company is not a Nidhi Company. Therfore theprovision of clause 3(xii) of the Order are not applicable to the Company. 13. During thecourse of our examination of the books and records of the Company carried out inaccordance with the Generally Accepted Auditing Practices in India and according to thethe information and explanations given to us all transactions with the related party arein compliance with section 177 and 188 of the Act and the details have been disclosed asrequired by the applicable Accounting Standard in Note no. 26(9) to the FinancialStatements.

14. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year.

Therefore the provisions of clause 3(xiv) of the Order are not applicable to theCompany.

15. Based on the information and explanations given to us the Company has not enteredinto any non-cash transactions prescribed under Section 192 of the Act with directors orpersons connected with them during the year. Therefore the provisions of clause 3(xv) ofthe Order are not applicable to the Company.

16. In our Opinion the Company is not required to be registered under Section 45-IA ofthe Reserve Bank of India Act 1934. Therefore the provisions of clause 3(xvi) of theOrder are not applicable to the Company.

For LODHA & CO.
Chartered Accountants
(R. P. BARADIYA)
Partner
Place : Mumbai (M. No. 44101)
Date : 21st May 2016 Firm Regn. No. 301051E

"ANNEXURE B"

Report on the Internal Financial Controls under Clauses (i) of the Sub-Section 3 ofSection 143 of the Act. We have audited the internal financial controls over financialreporting of EUROTEX INDUSTRIES AND EXPORTS LIMITED ("the Company") as ofMarch 31 2016 in conjunction with our audit of the financial statements of the Companyfor the year ended on that date.

Management’s Responsibilities for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India(ICAI).

These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company’s policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the according records and the timely preparation of reliablefinancial information as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing deemed to be prescribedunder Section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining andunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedure selecteddepends on the auditor’s judgements including the assessment of the risk of thematerial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company’s internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A Company’s internal financial control overfinancial reporting included those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditure of the Company are being made only in accordance with authorization ofmanagement and directors of the company and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the Internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2016 based on"the internal control over financial reporting criteria established by the Companyconsidering the essentials components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India".

For LODHA & CO.
Chartered Accountants
(R. P. BARADIYA)
Partner
Place : Mumbai (M. No. 44101)
Date : 21st May 2016 Firm Regn. No. 301051E