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Kitex Garments Ltd.

BSE: 521248 Sector: Industrials
NSE: KITEX ISIN Code: INE602G01020
BSE LIVE 15:40 | 26 Sep 213.65 1.35
(0.64%)
OPEN

210.00

HIGH

218.45

LOW

210.00

NSE 15:46 | 26 Sep 213.25 0.30
(0.14%)
OPEN

215.00

HIGH

219.20

LOW

212.00

OPEN 210.00
PREVIOUS CLOSE 212.30
VOLUME 7830
52-Week high 384.29
52-Week low 206.20
P/E 15.85
Mkt Cap.(Rs cr) 1,421
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 210.00
CLOSE 212.30
VOLUME 7830
52-Week high 384.29
52-Week low 206.20
P/E 15.85
Mkt Cap.(Rs cr) 1,421
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kitex Garments Ltd. (KITEX) - Auditors Report

Company auditors report

Independent Auditor's Report

To the Members of Kitex Garments Limited Kizhakkambalam

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Kitex GarmentsLimited ("the Company") which comprise the Balance Sheet as at 31st March2017 the Statement of Profit and Loss the Cash Flow Statement for the year then endedand a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone 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 standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder.

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 a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by Company's Directors as well as evaluating the overall presentation ofthe financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide 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 explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas 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 (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable. 2. As required bySection 143 (3) of the Act we report that: (a) We have sought and obtained all theinformation and explanations which to the best of our knowledge and belief were necessaryfor 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 opinionthe aforesaid standalone financial statements comply with the Accounting Standardsspecified 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 directorsas on 31st March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164 (2) of the Act.

(f) With respect to the adequacy of internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report 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. TheCompany has disclosed the impact of pending litigations on its financial position in itsfinancial statements Refer Note No 32.1 to the standalone financial statements. ii. TheCompany did not have any long-term contracts including derivative contracts for whichthere were any material foreseeable losses. iii. There has been no delay in transferringamounts required to be transferred to the Investor Education and Protection Fund by theCompany. iv. The Company has provided requisite disclosures in the financial statements asto holdings as well as dealings in Specified Bank Notes during the period from 8thNovember 2016 to 30th December 2016. Based on audit procedures and relying on themanagement representation we report that the disclosures are in accordance with books ofaccount maintained by the Company and as produced to us by the Management Refer Note No17.3 to the standalone financial statements.

For VARMA & VARMA

(FRN: 004532S)

Sd/-

V. Sathyanarayanan

Partner

CHARTERED ACCOUNTANTS

Membership No. 21941

Place: Kizhakkambalam

Date: 28th April 2017

"ANNEXURE A"

REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS" OF OUR INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONEFINANCIAL STATEMENTS OF KITEX GARMENTS LIMITED FOR THE YEAR ENDED 31st MARCH 2017

1. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets. (b) We are informed that fixed assetshave been physically verified by the management at reasonable intervals and that nomaterial discrepancies were noticed on such verification. (c) According to the informationand explanations given to us the records of the Company examined by us and theconfirmation from financial lender in respect of title deeds deposited with them and basedon the details of immovable properties furnished to us by the Company the title deeds ofthe immovable properties are held in the name of the Company.

2. We are informed that the physical verification of inventory has been conducted atreasonable intervals by the management and that no material discrepancies were noticed onsuch verification.

3. According to the information and explanations given to us and the records of thecompany examined by us the Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under Section 189 of the Act. Accordingly the reporting requirements underclauses (iii) (a) to (c) of paragraph 3 of the Order are not applicable. 4. According tothe information and explanations given to us and the records of the company examined byus the company has not granted any loans or given any guarantee or security for which theprovisions of sections 185 and 186 of the Act are applicable and the company has compliedwith the provisions of section 186 of the Act in respect of investments made by it. 5. TheCompany has not accepted any deposits from the public during the year and hence thedirectives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 orany other relevant provisions of the Act and the rules framed thereunder are notapplicable. 6. To the best of our knowledge and according to the information andexplanations given to us the Central Government has not prescribed the maintenance ofcost records under Section 148(1) of the Act for the company at this stage. 7. (a) As perthe information and explanations given to us and according to our examination of therecords of the Company the Company has been generally regular in depositing undisputedstatutory dues including provident fund employees' state insurance income tax salestax service tax duty of customs duty of excise value added tax cess and otherstatutory dues as applicable to the Company to the appropriate authorities during theyear except for an instance of delay in remittance of income tax deducted at source andcorporate dividend tax.

There are no arrears of undisputed statutory dues outstanding as on the last day of thefinancial year for a period of more than six months from the date on which they becamepayable.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no disputed amounts due to be deposited under Sales TaxService Tax Duty of Excise and Value Added Tax and the following disputed demands ofIncome Tax and Duty of Customs have not been deposited with the authorities as at 31stMarch 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 22026174/-(Net of Rs.9931229/- paid under protest) 1996-97 to 1997-98 Honourable Supreme Court of India
The Customs Act 1962 Income Tax Act 1961 Customs duty and interest Penalty 207462031/-* 3391894/- 2011-12 to 2016-17 2010-11 Honourable High Court of Kerala Commissioner of Income Tax (Appeals)

*Includes amounts in respect of which the company has furnished bank guarantee to thecustoms authority.

8. In our opinion and according to the information and explanations given to us and therecords of the Company examined by us the Company has not defaulted in repayment of loansand borrowings to the banks. The company has not taken any loans or borrowing fromFinancial 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 theCompany examined by us no money has been raised by way of initial public offer or furtherpublic offer (including debt instruments) and the term loan availed by the Company havebeen applied for the purpose for which the loan was obtained.

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 material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have been informed of any such case by theManagement.

11. As stated in Note No 31.2 to the standalone financial statements necessaryapproval for increase in remuneration of whole time director Rs.286171/- is being soughtfor at the ensuing Annual General Meeting. According to the information and explanationsgiven to us and the records of the Company examined by us managerial remuneration hasbeen paid or provided in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Act.

12. The Company is not a Nidhi company. Accordingly the reporting requirements underclause (xii) of paragraph 3 of the Order are not applicable.

13. According to the information and explanations given to us and the records of theCompany examined by us all transactions with the related parties are in compliance withSections 177 and 188 of the Act where applicable and the details of such transactions havebeen disclosed in Note No 31 to the standalone financial statements as required by theapplicable accounting standards.

14. According to the information and explanations given to us and based on theexamination 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. 15. According to the information and explanations given to us and the records ofthe Company examined by us the Company has not entered into any non-cash transactionswith directors or persons connected with the directors. Accordingly the reportingrequirement 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 theCompany examined by us the Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934. Accordingly the reporting requirement underclause (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

"ANNEXURE B"

REFERRED TO IN PARAGRAPH 2(f) UNDER THE HEADING "REPORT ON OTHER LEGAL ANDREGULATORY REQUIREMENTS" OF OUR INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF KITEX GARMENTS LIMITED FOR THE YEAR ENDED 31st MARCH2017

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 KitexGarments Limited ("the Company") as of March 31 2017 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the 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 Act.

Auditor's 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 issued by the ICAI and deemed to be prescribed underSection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols both applicable to an audit of Internal Financial Controls and both issued bythe Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial 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 includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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 2017 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 VARMA & VARMA

(FRN: 004532S)

Sd/-

V. Sathyanarayanan

Partner

CHARTERED ACCOUNTANTS

Membership No. 21941

Place: Kizhakkambalam

Date: 28th April 2017