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Sutlej Textiles and Industries Ltd.

BSE: 532782 Sector: Industrials
NSE: SUTLEJTEX ISIN Code: INE645H01027
BSE LIVE 15:40 | 22 Nov 96.50 -2.30
(-2.33%)
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100.40

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100.40

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NSE 15:59 | 22 Nov 96.40 -3.15
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100.00

HIGH

100.90

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OPEN 100.40
PREVIOUS CLOSE 98.80
VOLUME 7832
52-Week high 109.55
52-Week low 74.15
P/E 13.53
Mkt Cap.(Rs cr) 1,581
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 100.40
CLOSE 98.80
VOLUME 7832
52-Week high 109.55
52-Week low 74.15
P/E 13.53
Mkt Cap.(Rs cr) 1,581
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sutlej Textiles and Industries Ltd. (SUTLEJTEX) - Auditors Report

Company auditors report

TO THE MEMBERS OF

SUTLEJ TEXTILES AND INDUSTRIES LIMITED

Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of SUTLEJ TEXTILES ANDINDUSTRIES LIMITED ("the Company") which comprise the Balance Sheet as at 31stMarch 2017 the Statement of Profit and Loss the Cash Flow Statement and a summary ofthe significant accounting policies and other explanatory information for the year endedin which are incorporated the financial statements for the year ended on that date auditedby the branch auditor of the Company’s unit at Kathua in the State of Jammu andKashmir and Baddi in the State of Himachal Pradesh.

Management’s Responsibility for the Ind AS 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 Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Accounting Standards specified under Section 133 of the Act read with Rule7 of the Companies (Accounts) Rules 2014 and Companies (Indian Accounting Standards)Rules 2015 as amended.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating efiectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit .We have taken into account the provisions of the Act the accounting andauditing standards and matters which are required to be included in the audit report underthe provisions of the Act and the Rules made thereunder. We conducted our audit inaccordance 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 theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company’s Directors as well as evaluating theoverall presentation of the Ind As financial statements We believe that the audit evidencewe have obtained is suficient and appropriate to provide a basis for our audit opinion onthe Ind AS 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 theCompanies Act 2013 in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of afiairs of theCompany as at 31st March 2017 and its profit and its cash flows for the year ended onthat date.

Other Matter

We did not audit the financial statements of Kathua and Baddi Units included in thefinancial statements of the Company whose financial statements reflect total assets ofH1094.91 crores as at 31st March 2017 and total revenues of H1612.71 crores for the yearended on that date as considered in the financial statements. The

financial statements of the Kathua and Baddi units have been audited by the branchauditor whose reports have been furnished to us and our opinion in so far as it relatesto the amounts and disclosures included in respect of the branches is based solely on thereport of branch auditor. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 (‘the Order‘)issued by the Central Government of India in terms of sub-section (11) of section143 of the Companies Act2013 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 by Section 143 (3) of the Act we report that: (a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief 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 and proper returnsadequate for the purposes of our audit have been received from branches not visited by us(c) The reports on the accounts of the Kathua and Baddi units of the Company audited underSection 143 (8) of the Act by branch auditor have been sent to us and have been properlydealt with by us in preparing this report.

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

(e) 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 and the Companies (Indian Accounting Standards) Rules 2015 asamended.

(f) On the basis of the written representations received from the directors as on 31stMarch 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.

(g) With respect to the adequacy of the internal financial control over financialreporting of the Company and the operating efiectiveness 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 ouropinion 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 financialposition in its financial statements – Refer Note 39 A and B to the financialstatements ii. TheCompanyhasmadeprovisionasrequired under the applicable law oraccounting standards for material foreseeable losses on long-term contracts includingderivative contracts.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company

iv. The Company has provided requisite disclosures in Note No. 45 to these Ind ASfinancial statements as to holding of Specified Bank Notes on November 8 2016 andDecember 30 2016 as well as dealing in Specified Bank Notes during the period fromNovember 8 2016 to December 30 2016. Based on our audit procedures and relying on themanagement representation regarding the holding and nature of cash transactions includingSpecified Bank Notes we report that these disclosures are in accordance with the books ofaccounts maintained by company as produced to us and as per audit report received frombranch auditors.

For M/s SINGHI & CO.
Chartered Accountants
Firm’s Reg. No.302049E
B. K. Sipani
Place : Mumbai Partner
Date : 18th May 2017 Membership No. 088926

Annexure A

Annexure referred to in paragraph 1 of our report of even date on the other legal andregulatory requirements (Re: Sutlej Textiles and Industries Limited)

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

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

c. According to information and explanations given by the management the title deedsof immovable properties included in fixed assets except few assets having aggregate grossvalue of H3 crores (WDV as on 31st March 2017 H2.68 crores) for which registration ispending are held in the name of the respective units.

(ii) As explained to us inventories (except stock lying with third parties) werephysically verified during the year by the management at reasonable intervals and nomaterial discrepancies were noticed on such physical verification.

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

(iv) The Company has complied with provisions of section 186 of the Companies Act 2013in respect of loan granted and Investments made .According to information and explanationsgiven by the management no loan or guarantee or security under section 185 and noguarantee and security under section 186 of the Companies Act2013 have given during theyear.

(v) The company has not received any deposit covered under section 76 of the CompaniesAct2013 during the year. Therefore provisions of clause 3(v) of the order are notapplicable to the company.

(vi) We have broadly reviewed the books of accounts maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148 (1)of the Companies Act 2013 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 records of the Company the Company is generally regular indepositing undisputed statutory dues including Provident Fund Employees’ StateInsurance Income-tax Sales-tax Service tax Duty of Customs Duty of Excise ValueAdded Tax Cess and other material statutory dues deducted/accrued in the books with theappropriate authorities. There was no undisputed outstanding statutory dues as at the yearend for a period of more than six months from the date they became payable.

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

Name of Statute Nature of Dues Amount (net of paid) Forum where Dispute is Pending Related Period
The Central Excise Act 1944 Disallowances & (H in crores 0.36 Commissioner Oct. 05 to Mar.
Penalty and interest on payment of service tax through Cenvat (Appeals) Jaipur 06
The Central Excise Act 1944 Demand & Penalty for Service Tax 0.03 Commissioner (Appeals) Jaipur Dec.05 to Oct.06
The Central Excise Act 1944 Penalty against non- reversal of Cenvat credit on exempted goods 0.09 Rajasthan High Court Jaipur May99 to Feb.2002
The Central Excise Act 1944 Demand of rebate erroneously granted and paid by department 0.53 Central Excise & Service Tax Appellate Tribunal New Delhi 2010-11
The Central Excise Act 1944 Demand of rebate erroneously granted and paid by Department 1.28 Joint Secretary Government of India Ministry of finance Department of Revenue New Delhi 2008-2012
The Central Excise Act 1944 Excise duty on Clearance of Yarn at Single Stage 0.24 High Court of Jammu and Kashmir Jammu 1995 – 1996
The Central Excise Act 1944 Excise Duty on Clearance of Capital goods and Scrap Sales interest and penalty thereon 0.08 CESTAT New Delhi 2009-2012
The Central Excise Act 1944 Demand of rebate erroneously granted and paid by Department 3.70 Joint Secretary Government of India Ministry of Finance Department of Revenue New Delhi 2014-15
Gujarat Tax on Entry of Entry Tax Penalty and 13.09 Commercial Tax Apr. 06 to
Specified Goods into Local Areas Act 2001 Interest thereon Oficer Vapi Mar. 17
Himachal Pradesh Tax on Entry of Goods into Local Area Act 2010 Entry Tax on purchase of raw material 5.43 High Court of Himachal Pradesh 2010-11 to 2016-17
Rajasthan Tax on Entry of Goods into Local Areas Act 1999 Entry Tax and Interest 0.41 Supreme Court Delhi Apr. 06 to Mar. 17

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

(ix) According to the information and explanations given to us the Company has notraised any monies by way of initial public ofier or further public ofier (including debtinstruments). Further in our opinion and according to the explanations given to us termloans were applied for the purpose for which loans were raised.

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

(xi) According to the information and explanations given by the management managerialremuneration has been paid /provided in accordance with the requisite approvals mandatedby the provisions of section 197 read with schedule V to the Companies Act 2013 exceptcommission H7.20 crores payable to Chairman and other directors for which approval fromshareholders are being taken in ensuing Annual General Meeting.

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

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 of theCompanies Act 2013 where applicable and the details have been disclosed in the FinancialStatements as required by the applicable accounting standards.

(xiv) According to the information and explanations given by the management theCompany has not made any preferential allotments or private placement of shares or fullyor partly convertible debentures during the year under review. Therefore the provisionsof clause 3(xiv) of the order are not applicable.

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

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

For M/s SINGHI & CO.
Chartered Accountants
Firm’s Reg. No.302049E
B. K. Sipani
Place : Mumbai Partner
Date : 18th May 2017 Membership No 088926

Annexure B

Report on the Internal Financial controls under Clause (i) of Sub - section 3 ofSection 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of SutlejTextiles and Industries Limited as of March 31 2017 in conjunction with our audit of thefinancial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on the internal control over the 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 include the design implementation and maintenance of adequateinternal financial controls that were operating efiectively for ensuring the orderly andeficient 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 accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

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 ICAI and deemedto be prescribed under section 143(10) of the companies Act 2013 to the extentapplicable to as 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 of 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 efiectively 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 operatingefiectiveness. 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 exist and testing and evaluating the designand operating efiectiveness 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 suficient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlssystem over 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 controlover financial reporting includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorization of management and directors of the company ; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company’s assets that could havea material efiect 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 controlsover 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 efiectively as at March 31 2017 based on theinternal control over the financial reporting criteria established by the companyconsidering the essential 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 M/s SINGHI & CO.
Chartered Accountants
Firm’s Reg. No.302049E
B. K. Sipani
Place : Mumbai Partner
Date : 18th May 2017 Membership No 088926