1. We have audited the attached Balance Sheet of V-Guard Industries
Limited (the Company) as at 31st March 2010, the Profit and Loss
Account and the Cash Flow Statement of the Company for the year ended
on that date, both 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.
2. 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 misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts
and the disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the 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.
3. As required by the Companies (Auditors Report) Order, 2003 (CARO)
issued by the Central Government in terms of Section 227(4A) of the
Companies Act, 1956, we give in the Annexure, a statement on the
matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(i) 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;
(ii) 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;
(iii) the Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) in our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report are in compliance
with the Accounting Standards referred to in Section 211(3C) of the
Companies Act, 1956;
(v) 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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2010;
(b) in the case of the Profit and Loss Account, 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.
5. On the basis of the written representations received from the
Directors as on 31st March, 2010 taken on record by the Board of
Directors, we report that none of the Directors is disqualified as on
31st March, 2010 from being appointed as a director in terms of Section
274(1)(g) of the Companies Act, 1956.
ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our
report of even date)
i) Having regard to the nature of the Companys business, clauses (iii)
(b) to (d), (f) and (g), (vi), (x), (xii), (xiii), (xv), (xviii), and
(xix) of paragraph 4 of the Companies (Auditors Report) Order, 2003,
are not applicable to the Company for the year ended 31st March, 2010.
ii) In respect of its fixed assets:
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of the fixed assets.
(b) The fixed assets were physically verified during the year by the
Management in accordance with a regular programme of verification
which, in our opinion, provides for physical verification of all the
fixed assets at reasonable intervals. According to the information and
explanation given to us, no material discrepancies were noticed on such
verification.
(c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
iii) In respect of its inventory:
(a) As explained to us, the inventories were physically verified during
the year 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 were 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.
iv) The Company has neither granted nor taken any loans, secured or
unsecured, to / from companies, firms or other parties listed in the
Register maintained under Section 301 of the Companies Act, 1956.
v) 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 the nature of its business with regard
to purchases of inventory and fixed assets and the sale of goods and
services. During the course of our audit, we have not observed any
major weakness in such internal control system.
vi) In respect of contracts or arrangements entered in the Register
maintained in pursuance of Section 301 of the Companies Act, 1956, to
the best of our knowledge and belief and according to the information
and explanations given to us:
(a) The particulars of contracts or arrangements referred to Section
301 that needed to be entered in the Register maintained under the said
Section have been so entered.
(b) Where each of such transaction is in excess of Rs.5 lakhs in
respect of any party, the transactions have been made at prices which
are prima facie reasonable having regard to the prevailing market
prices at the relevant time.
vii) In our opinion, the internal audit functions carried out during
the year by a firm of Chartered Accountants appointed by the Management
have been commensurate with the size of the Company and the nature of
its business.
viii) We have broadly reviewed the books of account 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 in respect of PVC insulated electrical cables 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 the records with a view to determining whether they are accurate or
complete. To the best of our knowledge and according to the information
and explanations given to us, the Central Government has not prescribed
the maintenance of cost records for any other product of the Company.
ix) According to the information and explanations given to us, in
respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed
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 it with the appropriate authorities.
(b) There were no undisputed amounts payable in respect of 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 in arrears as at
31st March, 2010 for a period of more than six months from the date
they became payable.
(c) Details of dues of Income-tax, Sales Tax, Wealth Tax, Service Tax,
Custom Duty, Excise Duty and Cess which have not been deposited as on
31st March, 2010 on account of disputes are given below:
Statute Nature of Dues Forum where
dispute is
pending
Kerala General Supreme Court
Sales Tax Act, 1963 Sales Tax of India
Kerala General Dy. Commissioner
Sales Tax Act, 1963 Value Added Tax (Appeals), Cochin
Kerala General Dy. Commissioner
Sales Tax Act, 1963 Sales Tax (Appeals), Cochin
Kerala General
Sales Tax Act, 1963 Sales Tax High Court of Kerala
Kerala General Interest Dy. Commissioner
Sales Tax Act, 1963 on Sales Tax (Appeals), Cochin
Central Sales Dy. Commissioner
Tax Act Central Sales Tax (Appeals), Cochin
Kerala General Dy. Commissioner
Sales Tax Act, 1963 Sales Tax (Appeals), Cochin
Andhra Pradesh Addl. Dy. Commissioner
VAT Act Value Added Tax (CT), Hyderabad
Statue Period to which Amount
the amount involved
relates (Rs. in
lakhs)
Kerala General
Sales Tax Act, 1963 1988-89 to 1994-95 32.33
Kerala General
Sales Tax Act, 1963 1994-95 & 1995-96 6.66
Kerala General
Sales Tax Act, 1963 1996-97 & 1997-98 1.04
Kerala General
Sales Tax Act, 1963 1997-98 10.55
Kerala General
Sales Tax Act, 1963 1998-99 3.78
Central Sales
Tax Act 1998-99 23.36
Kerala General
Sales Tax Act, 1963 2003-04 & 2004-05 1.91
Andhra Pradesh
VAT Act 2005-06 0.75
x) In our opinion, and according to the information and explanations
given to us, the Company has not defaulted in the repayment of dues to
banks and a financial institution from which loans have been availed.
xi) Based on our examination of the records and evaluations of the
related internal controls, the Company has maintained proper records of
the transactions and contracts in respect of its dealing in securities
and timely entries have been made therein. The aforesaid securities
have been held by the Company in its own name.
xii) In our opinion, and according to the information and explanations
given to us, the term loans have been applied for the purpose for which
they were obtained.
xiii) In our opinion, and according to the information and explanations
given to us, and on an overall examination of the Balance Sheet, we
report that funds raised on short-term basis have not been used for
long-term investment.
xiv) The Management has disclosed the end use of money raised by public
issues and we have verified the same.
xv) To the best of our knowledge and according to the information and
explanations given to us, no fraud on or by the Company has been
noticed or reported during the year.
For Deloitte Haskins & Sells
Chartered Accountants
(Registration No.008072S)
Sd/-
M. RAMACHANDRAN
Partner
(Membership No.:16399)
Kochi, 28th May, 2010
