INDEPENDENT AUDITOR`S REPORT
TO THE MEMBERS OF VTX INDUSTRIES LIMITED,
Report on Financial Statements
We have audited the accompanying financial statements of VTX Industries Limited
("The Company"), which comprise the Balance Sheet as at March 31, 2013, and the
Statement of Profit and Loss and Cash Flow Statement for the year 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 the Accounting Standards referred to in sub-section (3C) of
section 211 of the Companies Act, 1956 ("the Act"). 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.
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.
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
b) in the case of the Statement of Profit and Loss, of the profits 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
Emphasis of Matter:
We draw attention to Note No.40 to the financial statements regarding adoption of
depreciation rates applicable to continuous process plant in respect of plant and
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.
488.01 Lacs (PY Rs. 478.19 Lacs) with consequential effect on the profit for the year and
also on reserves and surplus. We have not qualified our opinion in respect of this matter.
1. As required by the Companies (Auditor`s Report) Order, 2003 ("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.
Report on other Legal and Regulatory Requirements:
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 referred to in subsection (3C) of section
211 of the Companies Act, 1956;
e) On the basis of written representations received from the directors as on March 31,
2013, and taken on record by the Board of Directors, none of the directors is disqualified
as on March 31, 2013, from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956.
f) Since the Central Government has not issued any notification as to the rate at which
the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any
Rules under the said section, prescribing the manner in which such cess is to be paid, no
cess is due and payable by the Company.
||For Suri & Co.
||Firm Regn. No: 004283S
ANNEXURE TO THE AUDITORS` REPORT
The Annexure referred to in paragraph 1 of the Our Report of even date to the members
of VTX Industries Limited on the accounts of the company for the year ended 31st March,
1. In respect of its fixed assets
(a) The company is in the process of updating its fixed asset register.
(b) The fixed assets have been physically verified by the management in accordance with
a phased programme of verification, which in our opinion is reasonable, considering the
size and nature of business. The frequency of verification is reasonable and discrepancies
notices on such physical verification were not material and have been properly dealt with
in books of account.
(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. In respect of its inventories
(a) According to information and explanation furnished to us, the inventories are
physically have been verified by the management at reasonable intervals.
(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 are
reasonable and adequate in relation to the size of the company and the nature of its
(c) The company has maintained proper records of inventories, and no material
discrepancies were noticed on such physical verification of inventories and other
discrepancies noticed have been appropriately dealt with.
3. (a) According to the information and explanations given to us and on the basis of
our examination of the books of account, 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. Consequently, the provisions of clauses iii (a) to
iii (g) are not applicable.
4. In our opinion and according to the information and explanations given to us, there
is an adequate internal control procedure commensurate with the size of the company and
the nature of its business, for the purchase of inventories, 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 any major weaknesses in the internal control system.
5. a) Based on the audit procedures applied by us and according to the information and
explanations provided by the management, the particulars of contracts or arrangements
referred to in section 301 of the Act have been entered in the register required to be
maintained under that section.
b) According to the information and explanation 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 section 58AA of the companies Act,
1956 and the companies (Acceptance of Deposits) Rules, 1975, With regard to the deposits
from the public.
7. As per information & explanations given by the management, 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) 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 to the
extent applicable and any other statutory dues have generally been regularly deposited
with the appropriate authorities during the year, except the following cases which are
outstanding as on 31st March, 2013 for a period of more than 6 months from the
date they became payable:
||Nature of Dues
||Rs. in Lakhs
||Employees State Insurance
||Dividend Distribution Tax-
||Tax Deducted at Source
||Tax Collection at Source
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 Statute
||Nature of the dues
||Amount of demand/ (Paid) (Rs. in lakhs)
||Period to which it relates
||Forum where dispute is pending
|Income Tax Act, 1961
||Madras High Court
|Income Tax Act, 1961
|Income Tax Act, 1961
10. The Company has accumulated losses at the end of the financial year, but it has not
exceeded the fifty percent of its net worth. The company has not incurred cash loss during
the financial year covered by our audit but it has incurred cash loss in the immediately
preceding financial year.
11. In our opinion and according to information and explanations given to us, the
company has not defaulted in repayment of its dues to financial institutions, banks and
debenture holders except the term loan instalments due from April 2012 to March 2013 of
Rs.2961.94 Lacs (Rs.1421.98 Lacs towards Principal and Rs.1539.96 Lacs towards interest).
12. According to the information and explanations given 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.
13. The Company not being a chit fund, Nidhi or mutual benefit society. The
requirements of clause of (xiii) of Paragraph 4 of the order are not applicable to the
14. The Company is not dealing or trading in Shares, securities, debuntures and other
Investments. Accordingly, the provisions of clause (xiv) of paragraph 4 of the order are
15. According to the information and explanations given to us, the Company has not
given any guarantees for loan taken by others from banks or financial institutions.
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 explanations 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 by the Company.
18. The Company has not made any preferential allotment of shares during the year to
parties and companies covered in the register maintained u/s 301 of the Companies Act
19. The Company has not issued any debentures during the year.
20. The Company has not raised any money by public issue during the year.
21. According to the information and explanations given to us, we report that no
material fraud on or by the Company has been noticed or reported during the year.
||For Suri & Co.
||Firm Regn. No: 004283S