VTX INDUSTRIES LIMITED
ANNUAL REPORT 2011-2012
THE SHAREHOLDERS OF
VTX INDUSTRIES LIMITED,
We have audited the attached Balance Sheet of VTX INDUSTRIES LIMITED,
COIMBATORE as at 31st March, 2012 and also the Statement of Profit and Loss
for the year ended on that date annexed thereto and the cash flow statement
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.
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 the management, as well as evaluating the
overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
As required by the Companies` (Auditor`s Report) Order, 2003, issued by the
Central Government of India in terms of subsection (4A) of section 227 of
the Companies Act 1956, we give in the Annexure a statement on the matters
specified in paragraph 4 and 5 of the said order.
As required by the Section 227(3) of the Companies Act 1956, we report
1. 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;
2. 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.
3. 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.
4. In our opinion the Balance Sheet, Statement of Profit and Loss and 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
5. On the basis of written representations 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.
Without qualifying our report we draw attention to:
Note No.39 regarding adoption of depreciation rates applicable to
continuous process plant in respect of plant & machinery of Spinning and
Processing units and wind mills which is a technical matter. Due to this
policy adopted by the company, the depreciation for the year is lowered by
Rs. 478.19 Lakhs (PY Rs. 371.70 Lakhs) with consequential effect on the
loss for the year.
In our opinion and to the best of our information and according to the
explanations given to us, the said financial statements, 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 the Balance Sheet, of the state of affairs of the Company
as at 31st March, 2012.
ii) In the case of the Statement of Profit and Loss, of the Loss for the
year ended on that date; and
iii) In the case of cash flow statement, of the cash flows for the year
ended on that date.
For Suri & Co.
Firm Regn. No: 004283S
Place: Coimbatore Partner
Date : 29.05.2012 Membership No: 019773
ANNEXURE TO THE AUDITORS` REPORT:
1. (a) The Company is in the process of updating its fixed assets register.
(b) The Fixed Assets have been physically verified by the management in
accordance with a phased program of verification, which in our opinion is
reasonable, considering the size and nature of business. The frequency of
verification is reasonable and discrepancies noticed on such physical
verification were not material and have been properly dealt with in books
(c) In our opinion, the company has not disposed off a substantial part of
its fixed assets during the year and the going concern status of the
company is not affected.
2. (a) According to information and explanations furnished to us, the
inventories are physically have been verified by the management at
(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 are 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, and no material
discrepancies were noticed on such physical verification of inventories and
other discrepancies noticed have been appropriately dealt with.
3. The Company has neither taken nor granted any loans, secured or
unsecured, to or from parties covered in the register maintained under
Section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations
furnished to us, 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, fixed assets and for the sale of goods and services.
During the course of our audit, we have not observed any continuing failure
to correct major weakness in internal control system.
5. (a) The transactions that need to be entered into the register required
to be maintained in pursuance of Section 301 of the Act have been so
(b) According to the information and explanations furnished to us these
transactions have been made at prices which are reasonable having regard to
the prevailing market prices at the relevant time.
6. The company has accepted deposits from the public within the meaning of
Section 58A of the Companies Act, 1956. The company has complied with the
directives issued by Reserve Bank of India and the provisions of Section
58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of
Deposits) Rules, 1975, with regard to the deposits accepted from public.
7. The Company has an internal audit system commensurate with its size and
the nature of its business.
8. We have broadly reviewed the cost records maintained by the Company
pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed
by the central government under section 209(1)(d) of the Companies Act,
1956 and are of the opinion that prima facie the prescribed cost records
have been maintained. We have, however, not made a detailed examination of
the cost records with a view to determine whether they are accurate or
9. (a) The company is generally regular in depositing undisputed statutory
dues including Provident Fund, Employee`s State Insurance, Investor
Education and protection Fund, Income tax, Wealth tax, Service Tax, Sales
Tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the
appropriate authorities during the year, except the following cases which
are outstanding as on 31st March, 2012 for a period of more than 6 Months
from the date they became payable.:
S. Nature of Dues Amount
No. Rs. in Lakhs
1. Provident Fund 85.50
2. Employees State Insurance 7.58
3. Wealth Tax 0.96
4. Income Tax 91.51
5. Dividend Distribution Tax 17.68
6. Tax Deducted at Source 53.98
b. There are disputed dues of Tax which have not been deposited and the
amounts involved, the forum where disputes are pending as under:
Name of the Nature of Amount of Period to Forum where
Statute the dues demand/(Paid) which it dispute is
(Rs. in lakhs) relates pending
Income Tax Income tax 30.54 1999-00 Madras High
Act, 1961 (30.54) Court
Income Tax Income tax 27.30 2004-05 CIT (Appeal)
Act, 1961 (27.30)
10. The company has accumulated losses at the end of the financial year,
but it has not exceeded the fifty percent of its networth. The company has
incurred cash losses during the financial year covered by the audit and has
not incurred cash losses in the immediately preceding financial year.
11. In our opinion and according to information and explanation given to
us, the company has not defaulted in repayment of its dues to financial
institutions, banks and debenture holders except the term loan installments
due from the quarter ended 30.09.2011 to 31.03.2012 of Rs. 1700.42 Lakhs
(Rs. 863.94 Lakhs towards principal and Rs. 836.48 Lakhs towards interest).
12. The company has not granted any loans/advances on the basis of security
by way of pledge of shares, debentures and other securities.
13. The company not being a Chit fund, Nidhi or mutual benefit Society, the
requirements of clause (xiii) of paragraph 4 of the Order is not applicable
to the company.
14. The company is not dealing or trading in shares, securities, debentures
and other investments. Accordingly, the provision of clause (xiv) of
paragraph 4 of the Order is not applicable to the company.
15. According to the information and explanation given to us, the company
has not given any guarantee for loans taken by others from banks or
16. To the best of our knowledge and belief and according to the
information and explanation given to us the term loans availed by the
company were, prima facie, applied by the company during the year for the
purposes for which the loans were obtained.
17. According to the information and explanation given to us and on an
overall examination of the Balance sheet of the company, we are of the
opinion that there are no funds raised on short term basis have been used
for long term purposes.
18. 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.
19. The company has not issued any debentures during the year.
20. The Company has not raised any money by way of public issues during the
21. According to the information and explanation given to us, no material
fraud on or by the company has been noticed or reported during the year.
For Suri & Co.
Firm Regn. No: 004283S
Place: Coimbatore Partner
Date : 29.05.2012 Membership No: 019773