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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