We have audited the attached Balance Sheet of Vinyl Chemicals (India)
Ltd. as at 31st March, 2012 and the Statement of Profit and Loss and
also 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 the 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
assessing1 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.
I. 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 Companies Act, 1956, we enclose in the Annexure a
statement of the matters specified in paragraphs 4 and 5 of the said
II. Further to our comments in Annexure referred to above, we report
a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purposes of our
b. In our opinion, the Company has kept proper books of account as
required by law so far as appears from our examination of the 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
d. In our opinion, the Balance Sheet, the Statement of Profit and Loss
and the 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;
e. On the basis of written representation received from the directors,
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.
f. In our opinion and to the best of our information and according to
the explanations given to us, they 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:
i. In the case of Balance Sheet, of the state of affairs of the
Company as at 31st March, 2012.
ii. In the case of Statement of Profit and Loss, of the profit for the
year ended on that date; and
iii. In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH I OF OUR REPORT OF EVEN DATE TO THE
MEMBERS OF VINYL CHEMICALS (INDIA) LIMITED
1. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
2. We are informed that the fixed assets have been physically verified
by the Management during the year. There is a regular programme of
verification, which, in our opinion, is reasonable having regard to
size of the Company and nature of its assets. No material discrepancies
were noticed on such verification.
3. During the year, the Company has not disposed off a substantial
part of fixed assets.
4. The Management has physically verified the inventories of the
Company during the year. In our opinion, the frequency of verification
5. In our opinion, the procedures for physical verification of
inventories followed by Management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
6. On the basis of our examination of the records of the Company, we
are of the opinion that the Company has maintained proper records of
inventories. The discrepancies noticed on verification between the
physical verification and book records, not being material, were
appropriately dealt with.
7. The Company has not granted any loans, secured or unsecured, to the
companies, firms or other parties listed in the register maintained
under Section 301 of the Companies Act, 1956. In view of this, clauses
iii (b),(c) and (d) are not applicable to the Company and hence, not
8. During the year, the Company has not taken any loans, secured or
unsecured, from the companies, firms or other parties listed in the
register maintained under Section 301 of the Companies Act,1956. In
view of this, clauses iii (f) and (g) are not applicable to the Company
and hence, not reported upon.
9. There is adequate internal control system commensurate with the
size of the Company and the nature of its business, for the purchase of
inventory and fixed assets and for the sale of goods and services.
There is no continuing failure to correct weaknesses in internal
10. On the basis of our examination of relevant records and on the
basis of representation received from the Management, particulars of
contracts or arrangements that need to be entered in the register in
pursuance of Section 301 of the Act have been so entered.
11. On the basis of our examination of the books of account, relevant
information and explanations and representations as provided by the
Company, the transactions exceeding Rs 5 lacs 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.
12. The Company has not accepted any deposits under the provisions of
Section 58A, 58AA or any other relevant provisions of the Act and the
rules framed there under.
13. The function of internal audit, as explained, is being carried out
by outside professionals, which, in our opinion, is commensurate with
its size and nature of its business.
14. We are informed that the Central Government has not prescribed the
maintenance of cost records by the Company under Section 209(1 )(d) of
the Act, for the product dealt with by the Company.
15. According to the books and records as produced and examined by us
in accordance with generally accepted auditing practices in India and
also based on Management representations, the Company is regular in
depositing undisputed statutory dues including Provident Fund, Investor
Education and Protection Fund, Employees'' State Insurance, Income
Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty,
Cess and other material statutory dues with the appropriate authorities
and there are no arrears of outstanding statutory dues as at the last
day of the financial year for a period of more than six months from the
date it became payable.
16. According to the information and explanations given to us and also
based on the Management''s Representation, there have been no disputed
dues of Income tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty,
Excise Duty and Cess that have not been deposited on account of any
dispute as at the balance sheet date.
17. The Company has neither accumulated losses as at 31st March, 2012,
nor it has incurred any cash losses either in the financial year under
audit and in the immediately preceding financial year.
18. According to the records of the Company, it has not defaulted in
repayment of dues to financial institutions or banks or to debenture
19. The Company has not granted loans or advances on the basis of
security by way of pledge of shares, debentures and other securities.
20. In our opinion, considering the nature of activities carried on by
the Company during the year, the provisions of any special statute
applicable to chit fund/nidhi/mutual benefit fund/societies are not
applicable to it.
21. The Company has not dealt or traded in shares, securities,
debentures or other investments during the year.
22. The Company has not given any guarantee for loans taken by others
from banks or financial institutions, the terms and conditions whereof
are prejudicial to the interest of the Company.
23. We are informed that the Company has not taken any term loans
during the year.
24. On the basis of review of utilization of funds which is based on
overall examination of the balance sheet of the Company and related
information made available to us and as represented to us by the
Management, no funds raised on short-term basis have been utilized for
long term purpose.
25. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act.
26. As informed to us, the Company has not issued any debentures
during the year.
27. The Company has not raised any money by public issue during the
28. As per the information and explanations given to us and on the
basis of examination of records, no fraud on or by the Company has been
noticed or reported during the year.
For and on behalf of
D.A. KOTHARI & CO
Firm Reg. No. 105299W
Membership Number 6301
Dated: 23rd May, 2012