The Members of
KAKATIYA TEXTILES LIMITED
Report on the Financial Statements:
We have audited the accompanying financial statements of KAKATIYA TEXTILES LIMITED("the Company") which comprise the Balance Sheet as at March 31 2016 and theStatement of Profit and Loss and Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements:
The Management is responsible for the matters in section 134(5) of the Companies Act2013
("the Act") with respect to the preparation of these financial statementsthat give a true and fair view of the financial position financial performance and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Accounting Standards specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules2014.
This responsibility also includes the maintenance of adequate accounting records inaccordance with the provision of the Act for safeguarding of the assets of the Company andfor preventing and detecting the frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of internal financialcontrol that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
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 there under.
We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company s preparation of thefinancial statements that give true and fair view in order to design audit procedures thatare appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by management as well as evaluating the overall presentation of thefinancial 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.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:
a. in the case of the Balance Sheet of the state of affairs of the Company as at March31 2016;
b. in the case of the Statement of Profit and Loss of the Profit for the year ended onthat date; and
c. in the case of the Cash Flow Statement of the cash flows for the year ended on thatdate
Report on Other Legal and Regulatory Requirements:
1. As required by the Companies (Auditor s Report) Order 2016 ("the Order")issued by the
Central Government of India in terms of sub-section (11) of section 143 of the Act2013 we give in the Annexure-A a statement on the matters specified in paragraphs 3 and 4of the
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 bestof 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 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 Balance Sheet the Statement of Profit and Loss and the CashFlow Statement comply with the Accounting Standards specified under Section 133 of theCompanies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014.
e. On the basis of written representations received from the directors as on March 31
2016 taken on record by the Board of Directors none of the directors disqualifiedas on March 31 2016 from being appointed as a director in terms of Section 164(2) of theCompanies Act 2013.
f. With respect to the adequacy of internal financial control over financial reportingof the Company and the operating effectiveness of such control refer to our separatereport in "Annexure B".
g. 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. The Company does not have any pending litigations which would impact its financialposition as on reporting date.
ii. The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses.
iii. There were no amounts which required to be transferred to the Investor Educationand Protection Fund by the Company.
Annexure-A to the Independent Auditors' Report
1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The company has physically verified its fixed assets during the period and suchintervals which in our opinion provided for the physical verification of all the FixedAssets at reasonable interval having regard to the size of the company and nature of itsbusiness.
According to the information and explanation given to us no material discrepancieshave been noticed verification such carried out during the period.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
(ii) According to the information and explanations furnished to us the company hasphysically verified its inventories at reasonable intervals during the period underreport. In our opinion and according to information and explanation given to us thediscrepancies verification any noticed of inventories between the physical stocksand the book records were not material and have been properly dealt with in the books ofaccount.
(iii) According to the information and explanations furnished to us the company hasnot granted any loans secured or unsecured to companies firms or other parties coveredin register maintained under Section 189 of the Companies Act 2013. Consequentlyparagraph 3 iii (a) (b) and (c) of the order are not applicable to the Company.
(iv) According to the information and explanations furnished to us the company has notgiven any loan made any investment given any guarantee or provided any security coveredunder section 185 and 186 of the Companies Act 2013.
(v) According to the information and explanations given to us the company has notaccepted any deposits covered under the provisions of section 73 to 76 or any otherrelevant provisions of the Act. Further according to the information furnished to us noorder has been passed on the company by the Company Law Board or National Company LawTribunal or Reserve Bank of India or any Court or any other Tribunal for non-compliancewith the provisions of Sections 73 to 76 of the Companies Act 2013.
(vi) The Central Government has prescribed the maintenance of cost records underSection 148 (1) (d) of the Companies Act 2013. We have broadly reviewed the accounts andrecords of the company in this connection and are of the opinion that prima-facie theprescribed accounts and records have been made and maintained. We have not however madea detailed examination of the same.
(vii) (a) According to the information and explanations furnished to us and accordingto the books and records produced for our examination in our opinion the company isregular in depositing with the appropriate authorities the undisputed statutory duesincluding Provident Fund
Employees State insurance Income Tax Sales Tax Wealth Tax
Service Tax Custom Duty Excise duty Value added tax and other material statutorydues wherever applicable to it and further there are no undisputed statutory dues thatwere outstanding as at the date of the Balance Sheet for a period of more than sixmonths from the date they became payable.
(b) According to the information and explanations furnished to us and according to therecords of the company the company has no disputed dues on account of Income Tax WealthTax Service Tax Sales Tax Customs Duty Excise Duty Value added tax or Cess pendingremittance as at March 31 2016 except the following:
|Name of the statute ||Nature of demand ||Amount (in Lakhs) ||Period ||Forum where dispute is pending |
|CST Act 1956 ||Penalty ||9.21 ||2011-12& 2012-13 ||Appellate Deputy Commissioner(CT) Hyderabad |
(viii) According to the information and explanations given to us there were nodefaults in repayment of dues to financial institutions banks government or debentureholders at the date of balance sheet.
(ix) According to the information and explanations given to us the company has notraised money by way of initial public offer or further public offer (including debtinstrument) and the term loans from Banks and Financial Institutions have been applied forthe purposes for which they were obtained.
(x) According to the information and explanations given to us no material fraud byofficers the Company or on the Company by its or employees has been noticed or reportedduring the course of our audit.
(xi) According to the information and explanations furnished to us the company has notpaid or provided managerial remuneration during the period. Hence reporting requirement interms of Clauses (xi) does not arise during the period under report.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(xiv) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv) According to the information and explanations furnished to us the company has notentered in to any non-cash transactions with directors or persons connected with him.
(xvi) According to the information and explanations furnished to us the company is notrequired to be registered under the section 45-IA of the Reserve Bank of India Act 1934.
Annexure-B to the Independent Auditors' Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of KAKATIYATEXTILES LIMITED ("the Company") as of 31 March 2016 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
Management's Responsibility 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 responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company s policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
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 issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness.
Our audit of internal financial controls over financial reporting included obtaining anunderstanding 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 procedures selecteddepend on the auditor s judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a 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 process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of un authorised 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.
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 31 March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For CHEVUTURI ASSOCIATES |
| ||Chartered Accountants |
| ||Firm Reg. No.000632S |
| ||Sd/- |
| ||CA. Srinivasa Rao Cherukuri |
|Place: Tanuku ||Partner |
|Date: 26th May 2016 ||M. No.209237 |