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Vardhman Textiles
BSE: 502986|NSE: VTL|ISIN: INE825A01012|SECTOR: Textiles - Spinning - Cotton Blended
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Mar 12
Auditor's Report (Vardhman Textiles) Year End : Mar '13
Report on the Financial Statements
 
 1.  We have audited the accompanying financial statements of Vardhman
 Textiles Limited, which comprise the Balance sheet as at 31st March,
 2013, and the Statement of Profit and Loss and Cash flow statement for
 the year ended on that date, and a summary of significant accounting
 policies and other explanatory information.
 
 Management''s Responsibility for the Financial Statements
 
 2.  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. 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
 
 3.  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 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
 
 4.  In our opinion and to the best of our information and according to
 the explanations given to us, the financial statements read together
 with significant accounting policies and notes thereon 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:
 
 a.  In the case of the Balance Sheet, of the state of affairs of the
 Company as at 31st March, 2013;
 
 b.  In the case of Statement of Profit and Loss, of the profit 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.
 
 Report on Other Legal and Regulatory Requirements
 
 5.  As required by the Companies (Auditor''s Report) Order, 2003 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.
 
 6.  As required by section 227(3) of the Companies Act, 1956, 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
 sub-section (3C) of section 211 of the Companies Act, 1956;
 
 e.  On the basis of written representations received from the directors
 as on 31st March, 2013, and taken on record by the Board of Directors,
 none of the directors is disqualified as on 31st March, 2013, from
 being appointed as a director in terms of clause (g) of sub- section
 (1) of section 274 of the Companies Act, 1956.
 
 ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT
 
 (Referred to in paragraph 5)
 
 i.  a) The Company has maintained proper records showing full
 particulars including quantitative details and situation of its fixed
 assets.
 
 b) According to the information and explanations given to us, the
 Company has adopted a policy of physically verifying the fixed assets
 once in every three years.  Pursuant to the said policy, the Company
 has physically verified the entire block of office equipment and
 furniture and fixtures during the year.  Discrepancies, which were not
 material, noticed on such physical verification have been properly
 dealt with in the books of account. Further, in our opinion, the
 frequency of physical verification of fixed assets is reasonable having
 regard to the size of the Company and nature of its business.
 
 c) In our opinion and according to the information and explanations
 given to us, the Company has not disposed off substantial part of its
 fixed assets during the year.
 
 ii.  a) According to the information and explanations given to us,
 inventories have been physically verified by the management during the
 year. In our opinion the frequency of verification is reasonable.
 
 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 as evidenced by the written procedures and
 instructions are reasonable and adequate in relation to the size of the
 Company and nature of its business.
 
 c) On the basis of our examination of the records of inventories, we
 are of the opinion that the Company is maintaining proper records of
 inventories. The discrepancies noticed on physical verification of
 Inventories as compared to book records were not material and have been
 dealt properly within the books of account.
 
 iii. a) The Company has not granted secured or unsecured loans to
 companies, firms or other parties covered in the register maintained
 under section 301 of the Companies Act, 1956. Therefore the provisions
 of paragraph 4 (iii) (b) (c) and (d) of the above said order are not
 applicable to the Company.
 
 b) The Company has during the year taken unsecured loans from twelve
 companies covered in the register maintained under section 301 of the
 Companies Act, 1956. The amount involved in the transaction is Rs.
 3,358.80 lac. The amount payable as at the close of the year is Rs.
 147.80 lac.
 
 c) According to the information and explanations given to us, the rate
 of interest and other terms and conditions in respect of unsecured
 loans taken by the Company, are not prima-facie prejudicial to the
 interest of the Company.
 
 d) In our opinion and according to the information and explanations
 given to us, the payment of principal amount and interest in respect of
 the aforesaid loans was regular.
 
 iv.  In our opinion and according to the information and explanations
 given to us, there is an adequate internal control system commensurate
 with the size of the Company and nature of its business for the
 purchase of inventory and fixed assets and sale of goods and services.
 During the course of our audit, we have not observed any continuing
 failure to correct major weaknesses in internal control systems.
 
 v.  a) In our opinion and according to information and explanations
 given to us, the particulars of contracts or arrangements referred to
 in section 301 of the Companies Act, 1956 have been entered in the
 register maintained under that section.
 
 b) In our opinion and according to information and explanations given
 to us, the transactions made in pursuance of contracts or arrangements
 entered in the register maintained under section 301 of the Companies
 Act, 1956 and exceeding Rupees five lac or more in respect of the party
 during the year, have been made at price which are reasonable having
 regard to the prevalent market prices at the relevant time.
 
 vi.  According to the information and explanations given to us, the
 Company has complied with the provisions of section 58A and 58AA or any
 other relevant provisions of the Companies Act, 1956 and the Companies
 (Acceptance of Deposits) Rules 1975 with regard to deposits accepted
 from the public. According to the information given to us, no order has
 been passed by the Company Law Board or National Company Law Tribunal
 or Reserve Bank of India or any Court or any other Tribunal.
 
 vii. In our opinion and according to the information and explanations
 given to us, the Company has an internal audit system commensurate with
 its size and nature of its business.
 
 viii.  We have broadly reviewed the books of account relating to
 materials, labour and other items of cost maintained by the Company
 pursuant to the Rules made by the Central Government for the
 maintenance of cost records under section 209(1)(d) of the Companies
 Act, 1956 and we 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 the records with a view to determine
 whether they are accurate or complete.
 
 ix.  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 and other material statutory dues
 applicable to the Company, if any, have been regularly deposited with
 appropriate authorities.  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, 2013, for a period of more than
 six months from the date they became payable.
 
 b) According to the records of the Company, the details of disputed
 statutory dues aggregating to Rs. 451.29 Lac that have not been
 deposited on account of matters pending before the appellate
 authorities in respect of sales tax, custom duty, service tax, excise
 duty and income tax are given below:
 
 Nature of Dues/      Disputed    Period to       Forum where
 Name of Statute      Amount      which amount    Dispute is pending
                     (Rs. in Lac) relates
 
 Sales Tax/Central Sales Tax/Entry Tax
 
 M. P. VAT Act, 2002      38.58   2007            Deputy Commissioner
                                                 (Appeal), Commercial 
                                                  Tax, Bhopal
 
 The Maharashtra 
 Sales Tax                 1.80   2006            Deputy Commissioner
 Act, 1956                                        of Sales Tax, Mumbai
 
 M. P. VAT Act, 2002       0.04   2010            Add. Commissioner
                                                  Commercial Tax, Bhopal
 
 The Punjab VAT Act, 2005  0.83   2003            Joint Director
                                                 (Enforcement), Patiala
 
 M.P. Commercial Tax Act,  0.52   2002            Deputy Commissioner
 1994                                             Commercial Tax, Bhopal
 
 Central Sales Tax 
 Act, 1956                27.44   2010            Add. Commissioner
                                                  Commercial Tax, Bhopal
 
 The Entry Tax Act, 1976  13.04   2004 & 2011     Add. Commissioner
                                                  Commercial Tax, Bhopal
 
 The Entry Tax Act, 1976   5.03   2001            Asstt. Commissioner
                                                  Commercial Tax, Bhopal
 
 Excise/Custom Duty
 
 Central Excise 
 Act, 1944               205.96   2006 to 2011    Custom, Excise & 
                                                  Service Tax Appellate
                                                  Tribunal, New Delhi
 
 Customs Act, 1962         7.15   2007            Custom, Excise &
                                                  Service Tax Appellate 
                                                  Tribunal, New Delhi
 
 Central Excise Act, 1944  1.02   2010            Commissioner (Appeals),
                                                  Bhopal
 
 Central Excise Act, 
 1944                    108.36   2004            Hon''ble Supreme Court,
                                                  New Delhi
 
 Central Excise 
 Act, 1944                 0.17   2006            Asstt. Commissioner
                                                  Central Excise,Ludhiana
 
 Service tax
 
 Service Tax Act, 1994     2.10   2010 & 2011     Commissioner (Appeals)
                                                  Central Excise, 
                                                  Chandigarh
 
 Service Tax Act, 1994     1.26   2008 & 2010     Custom, Excise & 
                                                  Service Tax Appellate 
                                                  Tribunal, New Delhi
 
 Income Tax
 
 Income Tax Act, 1961     37.99   2002 & 2003     Income Tax Appellate
                                                  Tribunal, Chandigarh
 
 According to the information and explanations given to us there are no
 disputed dues in respect of wealth tax and cess.
 
 x.  The Company does not have accumulated losses as at 31st March,
 2013. The latter part of the question relating to net worth is thus not
 applicable to the Company.  Further, the Company has not incurred cash
 losses during the financial year covered under audit and in the
 immediately preceding financial year.
 
 xi.  According to the information and explanations given to us, the
 Company has not defaulted in repayment of dues to banks.
 
 xii. The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 Therefore, the provisions of the clause 4 (xii) of the above said order
 are not applicable to the Company.
 
 xiii.  The Company is not a chit fund or a nidhi mutual benefit
 fund/society. Accordingly, the provisions of clause 4 (xiii) of the
 above said order are not applicable to the Company.
 
 xiv. According to the information and explanations given to us, the
 Company has not dealt or traded in share, securities, debentures and
 other investments. Therefore, the provisions of clause 4(xiv) of the
 above said order are not applicable to the Company.
 
 xv.  The Company has not given guarantees for loans taken by others
 from banks. Therefore, provisions of clause 4(xv) of above said order
 are not applicable to the Company.
 
 xvi. In our opinion and according to the information and explanations
 given to us, the term loans taken during the year have been applied for
 the purpose for which they were obtained.
 
 xvii.  According to information and explanations given to us and on an
 overall examination of the balance sheet of the Company, we report that
 funds raised on short-term basis have not been used for long term
 investment.
 
 xviii.  According to the information and explanations given to us, 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.
 
 xix. According to the information and explanations given to us, the
 Company has not issued debentures during the year. Accordingly, the
 provisions of clause 4 (xix) of the above said order are not applicable
 to the Company.
 
 xx.  The Company has not raised any money by way of public issue during
 the year. Accordingly, the provisions of clause 4 (xx) of the above
 said order are not applicable to the Company.
 
 xxi. According to the information and explanations given to us by the
 management and based upon the audit procedures performed we report that
 no fraud on or by the Company has been noticed or reported during the
 year.
 
                                              For S.C. VASUDEVA & CO.
 
                                               CHARTERED ACCOUNTANTS 
 
                                             Firm Regn. No.: 000235N
 
                                                       (SANJIV MOHAN) 
 
 PLACE : NEW DELHI                                           PARTNER
 
 DATED :28th May, 2013                          MEMBERSHIP NO. 86066
Source : Dion Global Solutions Limited
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