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Auditor Report of VTX Industries Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of VTX Industries Limited ("The Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these 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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control 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.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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 disclosures in the financial statements. The procedures selected depend on the auditor''s 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, 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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014.

b) in the case of the Statement of Profit and Loss, of the losses for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter:

We draw attention to Note No.40 of the statement which indicates that the company has incurred a net loss of Rs.23696.51 Lacs during the year ended March 31, 2014 and as of that date, the Company''s total liabilities exceeds its total assets by Rs.14417.02 Lacs. These conditions along with other matters set forth in Note No.43, indicates the existence of the material uncertainty regarding the Company''s ability to continue as a going concern. Attention is also drawn to the fact explained by the management that necessary efforts are being taken for revival of the unit. We have not qualified our opinion in respect of this matter.

We draw attention to Note No.41 of the statement that balances under Trade Receivables, Other Current and Non Current Assets, Loans & Advances, Trade Payables, Other Current Liabilities and Long term and short term borrowings from Banks and financial institutions are subject to confirmation and reconciliation if any. We have not qualified our opinion in respect of this matter.

We draw attention to Note No.42 to the financial statements regarding adoption of depreciation rates applicable to continuous process plant in respect of plant and machinery of spinning and processing units and wind mills which is a technical matter. Due to this policy adopted by the company, the depreciation for the year is lowered by Rs.287.21 Lacs (PY Rs.488.01 Lacs) with consequential effect on the loss for the year and also on reserves and surplus. We have not qualified our opinion in respect of this matter.

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

Report on other Legal and Regulatory Requirements:

2. As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of 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 the Company so far as appears from our examination of those books.

c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013.

e) On the basis of wrritten representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

The Annexure referred to in paragraph 1 of our report of even date to the members of VTX Industries Limited of the accounts of the company for the year ended 31st March, 2014:

1. In respect of its fixed assets

(a) The company is in the process of updating its fixed asset register.

(b) The fixed assets have been physically verified by the management in accordance with a phased programme of verification, which in our opinion is reasonable, considering the size and nature of business. The frequency of verification is reasonable and discrepancies noticed on such physical verification were not material and have been properly dealt with in books of account.

(c) In our opinion, the company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the company is not affected.

2. In respect of its inventories

(a) According to information and explanation furnished to us, the inventories have been physically verified by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company has maintained proper records of inventories, and no material discrepancies were noticed on such physical verification of inventories and other discrepancies noticed have been appropriately dealt with.

3. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has neither taken nor granted any loans, secured or unsecured, to or from parties covered in the register maintained under Section 301 of the Companies Act, 1956. Consequently, the provisions of clauses iii (a) to iii (g) are not applicable.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct any major weaknesses in the internal control system.

5. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b) According to the information and explanation furnished to us these transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has accepted deposits from the public within the meaning of Section 58A of the Companies Act, 1956. The company has complied with the directives issued by Reserve Bank of India and the provisions of section 58A and section 58AA of the companies Act,1956 and the companies (Acceptance of Deposits) Rules,1975,With regard to the deposits from the public.

7. As per information & explanations given by the management, the Company has an internal audit system commensurate with its size and the nature of its business.

8. We have broadly reviewed the cost records maintained by the company pursuant to the companies (Cost Accounting Records) Rules, 2011 prescribed by the central government under section 209(1) (d) of the companies Act. 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. (a) According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities during the year, except the following cases which are outstanding as on 3T'' March, 2014 for a period of more than 6 months from the date they became payable:

S. Nature of Dues Amount No. Rs. in Lakhs

1. Provident Fund 149.58

2. Employees State Insurance 20.27

3. Wealth Tax 0.96

4. Income Tax 162.68

5. Fringe Benefit Tax 1.11

6. Dividend Distribution Tax 17.68

7. Tax Deducted at Source 17.23

8. Tax Collection at Source 2.19

9. Investor Education and Protection Fund 12.08

(b) There are no disputed dues which are not paid on account of Income Tax, Sales Tax, Service Tax, Custom Duty, Wealth Tax, Excise Duty and Cess.

10. The Company has accumulated losses at the end of the financial year, it has exceeded fifty percent of its net worth. The company has incurred cash loss during the financial year covered by our audit but not in the immediately preceding financial year.

11. In our opinion and according to information and explanations given to us, the company has defaulted in repayment of its dues to financial institutions and banks in case of working capital facilities and term loans. In case of term loans the instalments are due from April 2012 to March 2014 of Rs. 6842.29 Lacs (Rs. 3699.43 Lacs towards Principal and Rs. 3142.86 Lacs towards interest).

12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company not being a chit fund, Nidhi or mutual benefit society. The requirements of clause (xiii) of Paragraph 4 of the order are not applicable to the Company.

14. The Company is not dealing or trading in Shares, securities, debentures and other Investments. Accordingly, the provisions of clause (xiv) of paragraph 4 of the order are not applicable.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from banks or financial institutions.

16. To the best of our knowledge and belief and according to the information and explanation given to us the term loans availed by the company were, prima facie applied by the company during the year for the purposes for which the loans were obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on short-term basis that have been used for long-term purposes by the Company.

18. The Company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained u/s 301 of the Companies Act, 1956.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by public issue during the year.

21 According to the information and explanations given to us, we report that no material fraud on or by the Company has been noticed or reported during the year.



For Suri & Co. Chartered Accountants Firm Regn. No: 004283S

M. Sivaram Place: Coimbatore (Partner) Date : 28.06.2014 Membership No. :211916


Mar 31, 2013

Report on Financial Statements

We have audited the accompanying financial statements of VTX Industries Limited ("The Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these 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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control 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.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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 disclosures in the financial statements. The procedures selected depend on the auditor''s 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made bv management, 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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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:

a) in (he case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

b) in the case of the Statement of Profit and Loss, of the profits for the year ended on that date; and

c) In the case of the Cash Flow Statement, of the cash flows for the vear ended on that date.

Emphasis of Matter:

We draw attention to Note No.40 to the financial statements regarding adoption of depreciation rates applicable to continuous process plant in respect of plant and machinery of spinning and processing units and wind mills which is a technical matter. Due to this policy adopted by the company, the depreciation for the year is lowered by Rs. 488.01 Lacs (PY Rs. 478.19 Lacs) with consequential effect on the profit for the year and also on reserves and surplus. We have not qualified our opinion in respect of this matter.

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

Report on other Legal and Regulatory Requirements:

2. As required by section 227(3) of the Act, we report that:

a) We have obtained all the information and explanations which to the best of 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 the Company so far as appears from our examination of those books.

c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO THE AUDITORS'' REPORT

The Annexdre referred to in paragraph 1 of the Our Report of even date to the members of VTX Industries Limited on the accounts of the company for the year ended 31" March, 2013:

1. In respect of its fixed assets

(a) The company is in the process of updating its fixed asset register.

(b) The fixed assets have been physically verified by the management in accordance with a phased programme of verification, which in our opinion is reasonable, considering the size and nature of business. The frequency of verification is reasonable and discrepancies notices on such physical verification were not material and have been properly dealt with in books of account.

(c) In our opinion, the company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the company is not affected.

2. In respect of its inventories

(a) According to information and explanation furnished to us, the inventories are physically have been verified by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company has maintained proper records of inventories, and no material discrepancies were noticed on such physical verification of inventories and other discrepancies noticed have been appropriately dealt with.

3. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has neither taken nor granted any loans, secured or unsecured, to or from parties covered in the register maintained under Section 301 of the Companies Act, 1956. Consequently, the provisions of clauses iii (a) to iii (g) are not applicable.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct any major weaknesses in the internal control system.

5. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b) According to the information and explanation furnished to us these transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has accepted deposits from the public within the meaning of Section 58A of the Companies Act, 1956..The company has complied with the directives issued by reserve bank of India and the provisions of section 58A and section 58AA of the companies Act,1956 and the companies (Acceptance of Deposits) Rules,1975,With regard to the deposits from the public.

7. As per information & explanations given by the management, the Company has an interna] audit system commensurate with its size and the nature of its business.

8. We have broadly reviewed the cost records maintained by the company pursuant to the companies (Cost Accounting Records) Rules, 2011 prescribed by the central government under section 209(1) (d) of the companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. (a) According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities during the year, except the following cases which are outstanding as on 3V1 March, 2013 for a period of more than 6 months from the date thev became payable:

S. Nature of Dues Amount No. Rs. in Lakhs

1. Provident Fund 68.91

2. Employees State Insurance 2.86

3. Wealth Tax 0.96

4. Income Tax 91.51

5. Dividend Distribution Tax 17.68

6. Tax Deducted at Source 65.28

7. Tax Collection at Source 5.71

b. There are disputed dues of Tax which have not been deposited and the amounts involved, the forum where disputes are pending as under:

Name Nature Amount of Period Forum of the of the demand/ to which where Statute dues (Paid it relates dispute (Rs. in lakhs) is pending

Income Income 30.54 1999-00 Madras Tax Act, tax (30.54) High 1961 Court

Income Income 28.29 2008-09 CIT Tax Act, tax (Appeal) 1961

Income Income 64.75 2009-10 CIT Tax Act, tax - (Appeal) 1961

10. The Company has accumulated losses at the end of the financial year, but it has not exceeded the fifty percent of its net worth. The company has not incurred cash loss during the financial year covered by our audit but it has incurred cash loss in the immediately preceding financial year.

11. In our opinion and according to information and explanations given to us, the company has not defaulted in repayment of its dues to financial institutions, banks and debenture holders except the term loan instalments due from April 2012 to March 2013 of Rs.2961.94 Lacs (Rs.1421.98 Lacs towards Principal and Rs.1539.96 Lacs towards interest).

12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company not being a chit fund, Nidhi or mutual benefit society. The requirements of clause of (xiii) of Paragraph 4 of the order are not applicable to the Company.

14. The Company is not dealing or trading in Shares, securities, debuntures and other Investments. Accordingly, the provisions of clause (xiv) of paragraph 4 of the order are not applicable.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from banks or financial institutions.

16. To the best of our knowledge and belief and according to the information and explanation given to us the term loans availed by the company were, prima facie applied by the company during the year for the purposes for which the loans were obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on short-term basis have been used for long-term purposes bv the Company.

18. The Company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained u/s 301 of the Companies Act 1956.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money bv public issue during the year.

21. According to the information and explanations given to us, we report that no material fraud on or bv the Company has been noticed or reported during the vear.



For Suri & Co.

Chartered Accountants

Firm Regn. No: 004283S



M. Sivaram

(Partner)

Place : Coimbatore

Date : 24.05.2013 Membership No. :2 11916


Mar 31, 2012

We have audited the attached Balance Sheet of VTX INDUSTRIES LIMITED, COIMBATORE as at 31st March, 2012 and also the Statement of Profit and Loss for the year ended on that date annexed thereto and the cash flow statement for the year ended on that date. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies' (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of subsection (4A) of section 227 of the Companies Act 1956, we give in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

As required by the Section 227(3) of the Companies Act 1956, we report that:

1. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

2. In our opinion proper books of account as required by law, have been kept by the company so far as appears from our examination of those books.

3. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account.

4. In our opinion the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement, dealt with by this report, comply with the accounting standards referred to in sub section (3C) of Section 211 of the Companies Act, 1956.

5. On the basis of written representations received from the Director is, as on 31st March, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2012, from being appointed as a director in terms of clause (g) of subsection (1) of Section 274 of the Companies Act, 1956.

Without qualifying our report we draw attention to Note No.39 regarding adoption of depreciation rates applicable to continuous process plant in respect of plant & machinery of Spinning and Processing units and wind mills which is a technical matter. Due to this policy adopted by the company, the depreciation for the year is lowered by Rs. 478.19 Lakhs (PY Rs. 371.70 Lakhs) with consequential effect on the loss for the year.

In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012.

ii) In the case of the Statement of Profit and Loss, of the Loss for the year ended on that date; and

iii) In the case of cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

1. (a) The Company is in the process of updating its fixed assets register.

(b) The Fixed Assets have been physically verified by the management in accordance with a phased programme of verification, which in our opinion is reasonable, considering the size and nature of business. The frequency of verification is reasonable and discrepancies noticed on such physical verification were not material and have been properly dealt with in books of account.

(c) In our opinion, the company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the company is not affected.

2. (a) According to information and explanations furnished to us, the inventories are physically have been verified by the management at reasonable intervals.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company has maintained proper records of inventory, and no material discrepancies were noticed on such physical verification of inventories and other discrepancies noticed have been appropriately dealt with.

3. The Company has neither taken for granted any loans, secured or unsecured, to or from parties covered in the register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations furnished to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system.

5. (a) The transactions that need to be entered into the register required to be maintained in pursuance of Section 301 of the Act have been so entered.

(b) According to the information and explanations furnished to us these transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The company has accepted deposits from the public within the meaning of Section 58A of the Companies Act, 1956. The company has complied with the directives issued by Reserve Bank of India and the provisions of Section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975, with regard to the deposits accepted from public.

7. The Company has an internal audit system commensurate with its size and the nature of its business.

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the central government under section 209(l)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. (a) The company is generally regular in depositing undisputed statutory dues including Provident Fund, Employee's State Insurance, Investor Education and protection Fund, Income tax, Wealth tax, Service Tax, Sales Tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities during the year, except the following cases which are outstanding as on 31st March, 2012 for a period of more than 6 Months from the date they became payable.:

S. Nature of Dues Amount No. Rs in Lakhs

1. Provident Fund 85.50

2. Employees State Insurance 7.58

3. Wealth Tax 0.96

4. Income Tax 91.51

5. Dividend Distribution Tax 17.68

6. Tax Deducted at Source 53.98

b. There are disputed dues of Tax which have not been deposited and the amounts involved, the forum where disputes are pending as under:

Name Nature Amount of Period Forum of the of the demand/ to which where Statute dues (Paid) it relates dispute (Rs in lakhs) is pending

Income Income 30.54 1999-00 Madras Tax Act, tax (30.54) High 1961 Court

Income Income 27.30 2004-05 CIT Tax Act, tax (27.30) (Appeal) 1961

10. The company has accumulated losses at the end of the financial year, but it has not exceeded the fifty percent of its networth. The company has incurred cash losses during the financial year covered by the audit and has not incurred cash losses in the immediately preceding financial year.

11. In our opinion and according to information and explanation given to us, the company has not defaulted in repayment of its dues to financial institutions, banks and debenture holders except the term loan installments due from the quarter ended 30.09.2011 to 31.03.2012 of f 1700.42 Lakhs (Rs. 863.94 Lakhs towards principal and Rs. 836.48 Lakhs towards interest).

12. The company has not granted any loans/ advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The company not being a Chit fund, Nidhi or mutual benefit Society, the requirements of clause (xiii) of paragraph 4 of the Order is not applicable to the company.

14. The company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provision of clause (xiv) of paragraph 4 of the Order is not applicable to the company.

15. According to the information and explanation given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. To the best of our knowledge and belief and according to the information and explanation given to us the term loans availed by the company were, prima facie, applied by the company during the year for the purposes for which the loans were obtained.

17. According to the information and explanation given to us and on an overall examination of the Balance sheet of the company, we are of the opinion the; there are no funds raised on short term basis have been used for long term purposes.

18. The company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The company has not issued any debentures during the year.

20. The Company has not raised any money by way of public issues during the year.

21. According to the information and explanation given to us, no material fraud on or by the company has been noticed or reported during the year.

For Suri & Co.

Chartered Accountants

Firm Regn. No: 004283S

K Hariharan

Place : Coimbatore Partner

Date : 29.05.2012 Membership No:019773


Mar 31, 2011

We have audited the attached Balance Sheet of VTX Industries Limited (Formerly Vijayeswari Textiles Limited) as at 31st March 2011, the Profit & Loss Account for the period ended on that date and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we have enclosed in the Annexure hereto a statement on the matters specified in paragraphs 4 & 5 of the said order.

Further to our comments in the Annexure referred to above, we report that:

a) We have obtained all the information and explanations which to the best of 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 the Company so far as appears from our examination of those books

c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956.

e) On the basis of the written representations received from the Directors, as on 31st March, 2011, and taken on record by the Board of Directors, we report that none of the Directors, is disqualified as on 31st March, 2011 from being appointed as a Director in terms of Clause (g) of subsection (1) of Section 274 of the Companies Act, 1956.

Without qualifying our report we draw attention to

1. Note No. 28 regarding adoption of depreciation rates applicable to continuous process plant in respect of plant and machinery of spinning and processing units and wind mills which is a technical matter. Due to this policy adopted by the Company, depreciation for the year is lower by Rs. 371.70 Lakhs (Previous year Rs. 295.83 Lakhs) with consequential effect on the profits for the year.

2. Note No. 29 regarding capitalization of Rs. 495.98 lakhs of borrowing costs pertaining to the integrated project.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India,

1) in the case of the Balance Sheet of the state of affairs of the Company as at 31st March 2011 and

2) in the case of Profit & Loss Account, of the Profit of the Company for the year ended on that date.

3) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT [Referred to in Para 3 of our Audit Report of even date]

1. In respect of its Fixed Assets:

a. The Company has maintained records showing particulars including quantitative details and situation of fixed assets. However the fixed assets register is in the process of compilation and updation.

b. The Company has physically verified certain fixed assets during the year in accordance with a programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the Company and nature of its assets. According to the information and explana- tions given to us no material discrepancies were noticed on such verification.

c. The Company has not disposed off any substantial fixed assets during the year of audit.

2. In respect of its inventories:

a. As explained to us, inventories have been physically verified by the management at regular intervals during the year.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c. In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification as compared to the book records.

3. The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956 during the year and as such clauses (iii) (a) to (iii) (g) of the Order are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commen- surate with the size of the Company and nature of its business for the purchase of inventory, fixed assets and also for the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in internal control systems.

5. In respect of contracts or arrangements referred to in Sec. 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, particulars of such contracts or arrange- ments have been entered in the register required to be maintained under section 301 of the Companies Act, 1956.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sec. 58A and Sec. 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from public.

7. In our opinion, the Company has an adequate internal audit system commensurate with the size and nature of its business.

8. We have broadly reviewed the books of account and records maintained by the Company pursuant to the Order made by the Central Government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of these records with a view to determining whether these are accurate and complete.

9. According to the information and explanations given to us in respect of the statutory dues:

a. The Company is generally regular in depositing undisputed statutory dues including Provident Fund (with minor delays), Investor Education and protection Fund, Employees' State Insurance (with minor delays), Income tax, Wealth tax, Service Tax, Sales Tax, Customs duty,

Excise Duty, Cess and any other statutory dues with the appropriate authorities during the year, except the delays in the following cases:

Nature of Payment Amount Rs. in Lakhs

T.D. at source 100.74*

* Paid out of the above after 31st March 2011 is Rs. Nil

According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstand- ing as at 31st March 2011 for a period of more than six months from the date they became payable except Rs. 30.35 Lakhs of TDS out of Rs. 100.74 Lakhs as above.

b. The details of disputed statutory dues are as under:

Name Nature Amount Period Forum of the of the (Rs. in to which where Statute dues / lakhs) it relates dispute year is pending

Income Income 57.77* A.Y.1999-00 CIT(A) / Tax Act, tax and A.Y. 2000-01 ITAT 1961 interest A.Y. 2004-05 A.Y. 2005-06

Income Income 236.75* A.Y. 2006-07 CIT(A) Tax Act, tax and 1961 interest

* Since paid Rs. 127.85 lakhs

10. The Company has no accumulated losses as at the end of the year. It has not incurred cash losses during the financial year covered by our audit and in immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given to us by the management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders except Term loan installment due for the quarter 31st December 2010 of Rs. 140.65 Lakhs and term loan installment due for the quarter ended 31st March 2011 of Rs. 549.40 lakhs both of which are outstanding on the date of this report.

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a Chit Fund or a Nidhi / Mutual Benefit Fund/society and as such reporting under clause (xiii) of the Order is not applicable to the Company.

14. The Company is not dealing or trading in shares, securities, debentures and other investments and as such clause (xiv) of the Order is not applicable to the Company.

15. According to the information and explanations given to us the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were, prima facie, applied by the Company during the year for the purposes for which the loans were obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet/Sources and Application of Funds of the Company, we are of the opinion that funds raised on short term basis have, prima facie, not been used during the year for long term investments.

18. The Company has not made any preferential allotment of shares during the year.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by public issue during the year. The end use of the monies raised by public issue during the earlier year to the extent deployed and as disclosed in the financial statements has been verified.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year that causes the financial statements to be materially misstated.

For Subbachar & Srinivasan Firm Reg. No.004083S Chartered Accountants

(Sd.) T.S.V. Rajagopal Partner Membership No. 200380

Place : Coimbatore Date : 28.05.2011




Mar 31, 2010

We have audited the attached Balance Sheet of VIJAYESWARI TEXTILES LIMITED as at 31st March 2010, the Profit & Loss Account for the period ended on that date and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we have enclosed in the Annexure hereto a statement on the matters specified in paragraphs 4 & 5 of the said order. Further to our comments in the Annexure referred to above, we report that:

a) We have obtained all the information and explanations which to the best of 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 the company so far as appears from our examination of those books

c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956.

e) On the basis of the written representations received from the Directors, as on 31s March, 2010, and taken on record by the Board of directors, we report that none of the Directors, is disqualified as on 31s March, 2010 from being appointed as a Director in terms of Clause (g) of subsection (1) of Section 274 of the Companies Act, 1956.

Without qualifying our report we draw attention to

1. Note No. 28 regarding adoption of depreciation rates applicable to continuous process plant in respect of plant and machinery of spinning and processing units and wind mills which is a technical matter. Due to this policy adopted by the company depreciation for the year is lower by Rs. 295.83 Lakhs with consequential effect on the profit for the year.

2. Note No. 30 regarding capitalization of Rs. 1027.14 lakhs of borrowing costs and expenses pertaining to the integrated project, reversal of such borrowing costs and expenses of Rs. 689.61 lakhs and lower depreciation of Rs. 278.71 lakhs and reversal of excess depreciation of Rs. 264.20 lakhs.

f) In our opinion and to the best of bur information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India,

1) in the case of the Balance Sheet of the state of affairs of the Company as at 31st March, 2010 and

2) in the case of Profit & Loss Account, of the Profit of the Company for the year ended on that date.

3) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

[Referred to in Para 3 of our Audit Report of even date]/

1. In respect of its Fixed Assets:

a. The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b. The company has physically verified certain fixed assets during the year in accordance with a programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the company and nature of its assets. According to the information and explanations given to us no material discrepancies were noticed on such verification.

c. The company has not disposed off any substantial fixed assets during the year of audit.

2. In respect of its inventories:

a. As explained to us, inventories have been physically verified by the management at regular intervals during the year.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification as compared to the book records.

3. The company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956 during the year and as such clauses (iii) (a) to (iii) (g) of the Order are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and nature of its business for the purchase of inventory, fixed assets and also for the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in internal control systems.

5. In respect of contracts or arrangements referred to in Sec. 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, particulars of such contracts or arrangements have been entered in the register required to be maintained under section 301 of the Companies Act, 1956.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of Sec. 58A and Sec. 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from public.

7. In our opinion, the company has an adequate internal audit system commensurate with the size and nature of its business.

8. We have broadly reviewed the books of account and records maintained by the company pursuant to the Order made by the Central Government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of these records with a view to determining whether these are accurate and complete.

9. According to the information and explanations given to us in respect of the statutory dues:

a. The company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and protection Fund, Employees / State Insurance, Income tax, Wealth tax, Service Tax, Sales Tax, Customs dutv, Excise Duty, Cess and any other statutory dues with the appropriate authorities during the year, except the delays in the following capes:

Nature of Payment Amount Rs. in Lakhs

T.D. at source 68.63*

* Out of the above Rs. 14.25 Lakhs has been paid after 31st March 2010.

According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2010 for a period of more than six months from the date they became payable.

b. The details of disputed statutory dues are as under:

Name Nature Amount Period Forum of the of the [Rs. in to which where Statute dues lakhs] it relates dispute year is pending

Income Tax Income 57.77* AY-1999-00 CIT/ Act 1961 tax and A.Y. 2000-01 ITAT interest A.Y. 2004-05 A.Y. 2005-06

Income Income 236.75* A.Y. 2006-07 CIT(A) Tax Act, tax and 1961 interest

* Since paid Rs. 91.10 lakhs

10. The company has no accumulated losses as at the end of the year. It has not incurred cash losses during the financial year covered by our audit but has incurred a cash loss in the immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given to us by the management, we are of the opinion that the company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13. The company is not a Chit Fund or a Nidhi/ Mutual Benefit Fund/society and as such reporting under clause (xiii) of the Order is not applicable to the company.

14. The company is not dealing or trading in shares, securities, debentures and other investments and as such clause (xiv) of the Order is not applicable to the company.

15. According to the information and explanations given to us the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the company were, prima facie, applied by the company during the year for the purposesfor which the loans were obtained.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet/Sources and Application of Funds of the company, we are of the opinion that funds raised on short term basis have, prima facie, not been used during the year for long term investments.

18. The company has not made any preferential allotment of shares during the year.

19. The company has not issued any. debentures during the year.

20. The company has not raised any money by public issue during the year. The end use of the monies raised by public issue during the earlier year to the extent deployed and as disclosed in the financial statements has been verified.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year that causes the financial statements to be materially misstated.

For Subbachar & Srinivasan

Firm Reg. No.004083S Chartered Accountants

(Sd.) T.S.V. Rajagopal

Place : Coimbatore Partner

Date : 29.05.2010 Membership No. 200380



 
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