THE MEMBERS OF KHATOR FIBRE AND FABRICS LIMITED Report on the Standalone Financial
Statements
We have audited the accompanying standalone financial statements of KHATOR FIBRE AND
FABRICS LIMITED (‘the Company), which comprise the Balance Sheet as at 31tfMarch,
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 [in
which are included the returns of one branch of the Company audited by branch auditor for
the year ended on that date].
Managements Responsibility for the Standalone Financial Statements
The Companys 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 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.
Auditors 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 the disclosures in the financial statements.
The procedures selected depend on the auditors 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 Companys 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 the accounting policies used and
the reasonableness of the accounting estimates made by the Companys 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 3 1 "March, 2017, its profit and its cash flows for the year ended on that
date.
Other Matter
We did not audit the financial statements of one branch of the Company i.e.
"Integrated Skill Development Scheme (ISDS)" branch included in the standalone
financial statements of the Company, as considered in the standalone financial statements
of the branch has been audited by the branch auditors whose reports have been furnished to
us, and our op inion so far as it relates to the amount and disclosures included in
respect of the branch, is based solely on the report of such branch auditor.
Our opinion is not modified in respect of these matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2016 ("the Order")
issued by the Central Government of India in terms of Section 143(11) of the Act, we give
in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4
of the Order.
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 ourknowledge 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 reports on the accounts of the branch office of the company audited under
section 143(8) of the Act by the branch auditor has been sent to us and has been properly
dealt with by us in preparing this report
d) 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;
e) 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;
f) On the basis of the written representations received from the directors as on
31 "March, 2017 taken on record by the Board of Directors, none of the directors
is disqualified as on 31 "March, 2017 from being appointed as a director in terms of
Section 164 (2) of the Act;
g) With respect to the adequacy of the internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate Report in "Annexure B".
h) With respect to the other matters to be included in die Auditors 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 did not have any pending litigations on its financial position in its
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 is no requirement for funds to be transferred to die Investor Education and
Protection Fund by the Company.
iv. The company had provided requisite disclosures in its financial statements as to
holdings as well as
dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th
December, 2016 and these are in accordance with the books of accounts maintained by the
company.
For S. R Goyal & Co.
Chartered Accountants FR No.: 001537C
Place: Mumbai
Date: 30/05/2017 AJC. AtoKa
(Partner)
M. No.: 077201
Annexure A to the Independent Auditors Report
to the members of KHATOR FIBRE AND FABRICS LIMITED
Report on the matters specified in paragraph 3 of the Companies (Auditors Report)
Order, 2016 ("the Order) issued by the Central Government of India in terms of
section 143(11) of the Companies Act, 2013 ("the Act") as referred to in
paragraph 1 of ‘Report on Other Legal and Regulatory Requirements section
(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
regards to size of the company and nature of its assets. No material discrepancies were
noticed on such physical verification.
(c) According to the information and explanations given to us and on the basis of our
examination of the records of the company, the title deeds of immovable properties are
held in the name of the company.
(ii) Physical verification of inventory has been conducted at reasonable intervals by
the management and no material discrepancies were noticed.
(iii) The Company has not granted loans, secured or unsecured, to companies, firms and
limited liability partnerships or other parties covered in the register maintained under
section 189 of the Companies Act, 2013. Therefore paragraph 3 (iii) (a), (b) & (c) of
the Order are not applicable;
(iv) According to the information and explanation given to us, the company has complied
with the provisions of section 185 and 186 of Act, with respect to the loans, investments,
guarantees, and security made.
(v) As informed to us, the Company has not accepted any deposit from the public during
the year within the meaning of section 73 or 76 of the Companies Act 2013 and the rules
framed there under. Therefore, the directives issued by the reserve bank of India or any
other relevant provisions of the Companies Act and the rules framed there under, are not
applicable.
(vi) As per information and explanations given to us, the cost records as prescribed by
the Central Government u/s 148(1) of the Companies Act 2013 in respect of process house
are being made and maintained. We have, however not made a detailed examination of the
said records with a view to determine whether they are accurate or complete.
(vii) (a) The Company is generally regular in depositing undisputed statutory dues
including provident fond, employees state insurance, income-tax, sales-tax, service tax,
duty of customs, duty of excise, value added tax, cess and any other statutory dues to the
appropriate authorities. There are no arrears of outstanding statutory dues as at the last
day of the financial year concerned for a period of more than six months from the date
they became payable.
(b) According to the information and explanation given to us , there are no dues in
respect of Income tax , wealth tax, excise duty, custom duty, service tax and cess that
have not been deposited with appropriate authorities on on account of any dispute.
(viii) The company has not defaulted in repayment of loans or borrowing to a financial
institution, bank, Government or dues to debenture holders.
(ix) The Company did not raise any money by way of initial public offer or further
public offer (including debt instruments) during the year. Accordingly, paragraph 3(ix) of
the Order is not applicable.
(x) According to the information and explanations given to us, no fraud by the Company
or fraud on the Company by its officers or employees has been noticed or reported during
the year;
(xi) According to the information and explanation given to us and based on our
examination of the records of the Company, the Company has paid or provided for the
managerial remuneration in accordance with the requisite approvals mandated by the
provisions of section 197 read with Schedule V of the Act;
(xii) The Company is not a Nidhi Company, hence clause (xii) of para 3 of the Order is
not applicable to the Company. Accordingly, paragraph 3(xii) of the Order is not
applicable.
(xiii) According to the information and explanations given to us and based on our
examination of the records of the company, transactions with the related parties are in
compliance with sections 177 and 188 of the act where applicable and details of such
transactions have been disclosed in the financial statements as required by the applicable
accounting standards;
(xiv) According to the information and explanations given to us and based on our
examination of the records of the Company, the Company has not made any preferential
allotment or private placement of shares or frilly or partly convertible debentures during
the year.
(xv) According to the information and explanations given to us and based on our
examination of the records of the company, the company has not entered into non-cash
transactions with directors or persons connected with him. Accordingly, clause (xv) of
para 3 of the Order is not applicable;
(xvi) The Company is not required to be registered under section 45-IA of the Reserve
Bank of India Act, 1934;
For S. R. Goya! & Co.
Chartered Accountants FRNo.: 001537C
Place: Mumbai
Date: 30/05/2017 A.K. AtoBa
(Partner)
M.No.: 077201
Annexure B to the Independent Auditors Report
to the members of KHATOR FIBRE AND FABRICS LIMITED
Report on the Interna] Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Companies Act, 2013 ("the Act") as referred to In paragraph 2(0 of
‘Report on Other Legal and Regulatory Requirements section
We have audited the internal financial controls over financial reporting of KHATOR
FIBRE AND FABRICS LIMITED (‘the Company), as of 31* March, 2017 in conjunction with
our audit of the standalone financial statements of the Company for the year ended on that
date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on "the internal control over financial 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". 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 companys 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 Companys internal financial
controls over financial 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 over financial
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 over financial reporting and their operating
effectiveness.
Our audit of internal financial controls over financial reporting included obtaining an
understanding of internal financial controls over financial 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 auditors judgment, 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 Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial 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 companys internal financial control over financial
reporting includes those policies and procedures that:
a) Pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and
dispositions of the assets of the company;
b) 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
authorizations of management and directors of the company; and
c) Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or
disposition of the 0009)80/8 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 financial
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 over financial
reporting to future periods are subject to the risk that the internal financial control
over financial 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 over financial reporting and such internal financial controls
over financial reporting were operating effectively as at March 31, 2017, based on
"the internal control over financial 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".
Explanatory paragraph
We also have audited, in accordance with the Standards on Auditing issued by the
Institute of Chartered Accountants of India specified under Section 143(10) of the Act,
the financial statements of the Company, which comprise the Balance Sheet as at March 31,
2017, and the related 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, and our report dated March 31,2017 expressed an unqualified opinion thereon.
For S. R. Goyal & Co. Chartered Accountants
FR No.: 001537C
Place: Mumbai
Date: 30/05/2017 A.K. Atolia
(Partner)
M. No.: 077201
+91-9892691696
