We have audited the Balance Sheet of VADILAL DAIRY INTERNATIONAL
LIMITED as at 31st March 2012 and also the annexed Profit and Loss
Account and the Cash Flow Statement of the Company 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.
1. 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 presentation of the
financial statements. We believe that our audit provides a reasonable
basis for our opinion.
2. As required by the 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 and on the basis of such
checks as we considered appropriate, and according to the information
and explanation given to us, we enclose in the Annexure hereto a
statement on the matters specified in paragraphs 4 and 5 of the said
order to the extent applicable to the Company.
3. Further to our comments in the Annexure referred to in paragraph 2
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
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 the
books of account.
c) The Balance Sheet and Profit and Loss Account and Cash Flow
Statement dealt with by this Report are in agreement with the books of
d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report are in compliance with the
accounting standards referred to in sub section (3c) of Section 211 of
the Companies Act, 1956.
4. We further report that -
a) The Accounts have been prepared on ''going concern'' basis.
b) We are of the opinion, that to the best of our information and
according to the explanation given to us the accounts read together
with the accounting policies and the notes thereon, give 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.
c) In the case of Balance Sheet of the State of affairs of the Company
as at 31.3.2012 and
d) In the case of the Profit and Loss Account, of the Loss for the year
ended on that date.
e) In so far as it relates to the Cash Flow Statement of the Cash Flow
for the year ended on that date.
ANNEXURE REFFERED TO IN PARAGRAPH 4 OF AUDITORS'' REPORT OF EVEN DATE
TO THE MEMBERS OF VADILAL DAIRY INTERNATIONAL LIMITED ON THE ACCOUNTS
FOR THE YEAR ENDED 31st MARCH 2012.
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 on the
basis of information available.
b. According to the information and explanations given to us, the
fixed assets have been physically verified by the management during the
year in a phased periodic manner, which in our opinion is reasonable,
having regard to the size of the Company and nature of the assets. No
material discrepancies were noticed on such verification.
2. In respect of its inventories:
a. The inventory has been physically verified during the year by the
Management. In our opinion, the frequency of verification is
b. The procedure of physical verification of inventories followed by
the management is 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. As
explained to us, the discrepancies noticed in physical verification of
the stock as compared to book records were not material and the same
have been properly dealt with in the books of accounts.
3. In respect of loans covered under Section 301 of the Companies Act,
a. As per the information and explanation given to us and the records
produced to us for our verification, the company had not granted loans,
secured or unsecured, to any Company, Firms or other parties covered in
the register maintained under section 301 of the Companies Act, 1956,
except security deposits for the use of trademark Vadilal.
b. The Company has taken unsecured loan from parties covered in the
register maintained under section 301 of the Companies Act, 1956, whose
terms are not prejudicial to the interest of the company.
4. In our opinion and according to the information and explanations
given to us, there exists an internal control system commensurate with
the size of the Company and the nature of its business with regard to
the purchases of inventories, fixed assets and with regard to sale of
goods. As per the information given to us, no major weaknesses in the
internal controls have been identified by the management or the
internal audit department of the company during the year. During the
course of our audit, nothing had come to our notice that may suggest a
major weakness in the internal control systems of the company.
5. In respect of transactions covered under Section 301 of the
Companies Act, 1956.
a. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements, that needed to be entered into the register maintained
under Section 301 of the Companies Act, 1956 have been so entered.
b. In our opinion and according to the information and explanations
given to us, transactions exceeding value of Rs. 500,000/- have been
entered into during the financial year are reasonable and for price
justification, reliance is placed on the information and explanation
given by the management.
6. During the year the Company has not accepted any deposits under the
provisions of Section 58A, 58AA of the Companies Act, 1956 and the
Rules framed there under.
7. The Company has an Internal Audit system commensurate with the size
and nature of its business.
8. We have broadly reviewed the cost records maintained by the Company
pursuant to the Rules made by the Central Government for maintenance of
Cost Records under Section 209 (1)(d) of the Companies Act, 1956.
9. In respect of statutory dues:
a. According to the information and explanations given to us,
undisputed statutory dues including provident fund, investor education
and protection fund, income tax, wealth tax, Custom duty, excise duty,
cess and other material statutory dues applicable to it have been
regularly deposited with the appropriate authorities except in few
b. According to the information and explanation given to us,
undisputed amounts payable in respect of sales tax, income tax, wealth
tax, customs duty, excise duty and cess were in arrears as at
31.03.2012 for a period of more than six months from the date they
became payable is as follows :
Sr. Name of the
Statute Name of the
(in Lakhs) Period to which the
No. amounts relates
Sales Tax Act Sales Tax 7.01 2002-03
Tax Act of
various states 65.78 2003-04
MVAT 676.34 2007-12
Tax 2.53 2004-05
3 Income Tax
Act 1961 TDS on Salaries 0.59 2006-07
4 Income Tax
Act 1961 Fringe Benefit
Tax 2.16 2008-09
5 Central Excise
Act, 1944 Excise Duty 8.48 March 99 - June 99
c. According to the information and explanation given to us, following
are the various disputed liabilities against which appeals are pending
with various statutory authorities:
No. Name of the Statute Nature of dues Amount of
1 Central Sales Tax Act and Sales Tax 43.05
Sales Tax Act of various
Interest on 233.18
2 Central Excise Act 1944 Excise Duty 101.35
Name of the Statute Period to which Forum where
the amounts dispute is
Central Sales Tax Act and
Sales Tax Act of Various
States 1992-93 Maharashtra
1993-94 Sales Tax
1994-95 Tribunal and
1995-96 Bombay High
2007-12 Board for Industrial
Central Excise Act 1944 1-4-98 to Feb''99 Refer Note 1
Note 1. The Tribunal Appeal has been allowed in favour of the company.
However the excise department may file appeal to the higher
10. In our opinion, the accumulated losses are more than fifty percent
of its net worth. The company has incurred cash losses during the
financial year covered in the audit and not in the immediately
preceding financial year.
11. The Company has not granted any loans or advances on the basis of
security by way of pledge of shares, debentures and other securities.
12. In our opinion, the company is not a chit fund / nidhi / mutual
benefit fund / society therefore the provision of clause 4 (xiii) of
the Companies (Auditor''s Report) Order, 2003 are not applicable to
13. The Company has made investments in Shares during the year. Proper
records have been maintained of the transactions and contracts and
timely entries have been made therein. All the investments have been
held in the name of the company.
14. As per the information and explanation given to us the Company has
not given guarantees for loan taken by others from banks or financial
15. The Company has raised a loan of Rs.1,00,90,000/- during the year
against security of fixed deposits of the company.
16. 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 no funds raised on long term basis have been used for
short term investment and funds raised on short term basis have been
used for long term purposes except to the extent of funds invested in
modernisation of plant for which loans were raised against fixed
deposits with banks.
17. According to the information and explanations given to us, the
Company has not made preferential allotment of equity and preference
shares to companies covered in the register maintained under Section
301 of the Companies Act 1956.
18. During the year the Company has not issued any debenture.
19. The Company has not raised any money by public issue during the
20. As per the information and explanations given to us and on the
basis of examination of records, no material fraud on or by the company
was noticed or reported during the year.
For B. V. Shah & Associates
Bharat V. Shah
M No. 040210
Place : Mumbai
Date : 01/09/2012