Report on the Financial Statements
We have audited the accompanying financial statements of V-Guard
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 then 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
accounting principles generally accepted in India, including the
Accounting Standards notified under the Companies Act, 1956 (the Act)
read with General Circular 8/2014 dated April 4, 2014 issued by the
Ministry of Corporate Affairs. 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 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
1. As required by the Companies (Auditor''s Report) Order, 2003 (as
amended) (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.
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 notified
under the Companies Act, 1956 read with General Circular 8/2014 dated
April 4, 2014 issued by the Ministry of Corporate Affairs;
(e) On the basis of written 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.
Annexure referred to in paragraph 1 under the heading Report on Other
Legal and Regulatory Requirements of our report of even date
Re: V-Guard Industries Limited (''the Company'')
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
(b) All fixed assets were physically verified by the management during
the year in accordance with a planned programme of verifying them once
in two years which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. As informed by the
management no material discrepancies were noticed on such verification.
(c) There was no disposal of a substantial part of fixed assets during
the year.
(ii) (a) The management has conducted physical verification of
inventory at reasonable intervals during the year.
(b) The inventory has been physically verified by the management during
the year. In our opinion, the frequency of verification is reasonable.
Inventories lying with outside parties have been confirmed by them as
at year end.
(c) The Company is maintaining proper records of inventory.
Discrepancies noted on physical verification of inventories were not
material and have been properly dealt with in the books of accounts.
(iii) (a) According to the information and explanations given to us,
the Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956 (''the Act). Accordingly,
the provisions of clauses 4(iii) (a) to (d) of the Companies (Auditor''s
Report) Order, 2003 (as amended) (''the Order'') are not applicable to
the Company and hence not commented upon.
(iii) (e) According to the information and explanations given to us,
the Company has not taken any loans, secured or unsecured from
companies, firms or other parties covered in the register maintained
under section 301 of the Act. Accordingly, the provisions of clauses
4(iii) (e) to (g) of the Order are not applicable to the Company and
hence not commented upon.
(iv) In our opinion and according to the information and explanations
given to us, as well as taking into consideration the management
representation that certain items of inventories are of specialized
nature for which alternative quotations are not available, 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
and fixed assets and for the sale of goods and services. During the
course of our audit, we have not observed any major weakness or
continuing failure to correct any major weakness in the internal
control system of the Company in respect of these areas.
(v) (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Act that need to be
entered into the register maintained under section 301 have been so
entered.
(v) (b) In our opinion and according to the information and
explanations given to us, the transactions made in pursuance of such
contracts or arrangements and exceeding the value of Rupees five lakhs
have been entered into during the financial year at prices which are
reasonable having regard to the prevailing market prices at the
relevant time.
(vi) The Company has not accepted any deposits from the public.
(vii) In our opinion, the Company has an internal audit system
commensurate with the size of the Company and 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 Act,
related to the products manufactured by the Company and are of the
opinion that prima facie, the prescribed accounts and records have been
made and maintained.
(ix) (a) 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 have generally been regularly deposited
with the appropriate authorities.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of provident fund, investor
education and protection fund, employees'' state insurance, income-tax,
wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and
other material statutory dues were outstanding, at the year end, for a
period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of
income-tax, sales-tax, wealth-tax, service tax, customs duty, excise
duty and cess on account of any dispute, are as follows:
Name of the
statute Nature of dues Amount Period to Forum where
(Rs. in
lakhs) which the dispute is
pending
amount
relates
Central
Sales Tax
Act Central Sales
tax 64.88* 1998-99 Commercial Tax
Office,
Tamil Nadu
Tamil Nadu
Value Value added
tax 59.70 2008-09 High Court of
Added Tax
Act Madras
Andhra
Pradesh Value added
tax 14.10 2006-07 to Deputy
Commissioner
Value Added
Tax Act 2009-10 (CT), Hyderabad
Rural
Karnataka
Value Value added
tax 2.37 2011-12 Appellate
Tribunal
Added Tax
Jharkhand
Value Value added
tax 2.30 2009-10 Commercial Taxes
Added Tax Tribunal
Andhra
Pradesh Value added
tax 0.75 2005-06 Additional
Deputy
Value Added
Tax Commissioner
Commercial Taxes
Income Tax
Act, 1961 Income tax 4.53 AY 2008-09 Deputy
Commissioner
Income tax
Income Tax
Act, 1961 Income tax 17.00 AY 2009-10 Commissioner of
Income Tax
(Appeals)
Income Tax
Act, 1961 Income tax 128.46 AY 2010-11 Commissioner of
Income Tax
(Appeals)
Income Tax
Act, 1961 Income tax 8.40 AY 2011-12 Commissioner of
Income Tax
(Appeals)
* Of the above Rs. 2.60 lakhs has been paid under protest.
(x) The Company has no accumulated losses at the end of the financial
year and it has not incurred cash losses in the current and immediately
preceding financial year.
(xi) Based on our audit procedures and as per the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to a financial
institution or bank. The Company did not have any outstanding dues in
respect of debentures during the year.
(xii) According to the information and explanations given to us and
based on the documents and records produced 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.
(xiii) In our opinion, the Company is not a chit fund or a nidhi /
mutual benefit fund / society. Accordingly, the provisions of clause
4(xiii) of the Order are not applicable to the Company.
(xiv) In our opinion, the Company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the Order are not applicable to the
Company.
(xv) According to the information and explanations given to us, the
Company has given guarantee for loans taken by others from banks or
financial institutions, the terms and conditions whereof, in our
opinion, are not prima-facie prejudicial to the interest of the
Company.
(xvi) Based on the information and explanations given to us by the
management, term loans were applied for the purpose for which the loans
were obtained.
(xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, we report
that no funds raised on short-term basis have been used for long-term
investment.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
section 301 of the Act.
(xix) The Company did not have any outstanding debentures during the
year.
(xx) The Company has not raised any money through public issue during
the year.
(xxi) We were informed by the management that during the year under
audit, the Company has initiated an investigation against an employee
and certain dealers in connection with alleged misappropriation of
funds/assets of the Company pertaining to certain sale transactions.
Pending completion of the investigation, the Company has suspended the
employee and has fully provided for such outstanding receivables, as
ascertained by management, amounting to Rs. 249.96 lakhs as at March 31,
2014.
For S.R. Batliboi & Associates LLP
ICAI Firm Registration Number: 101049W
Chartered Accountants
Sd/-
per Aditya Vikram Bhauwala
Partner
Membership Number: 208382
Place: Kochi
Date : May 2, 2014
