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INDEPENDENT AUDITORS' REPORT
TO THE MEMBERS OF VADILAL INDUSTRIES LIMITED
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Vadilal Industries Limited ("the company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone 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 principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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 standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act.
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 the 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 financial control relevant to the Company's preparation of the financial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the company has in place as adequate Internal Financial controls system over financial reporting and the effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company's Directors, 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 on the standalone financial statements.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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, of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.
Emphasis of Matter
a. Attention is invited to Note No. 27.3 of the standalone financial statement regarding petition which is under process with Company Law Board for repayment of fixed deposit accepted under The Companies Act, 1956.
b. Attention is invited to Note No. 27.6 of the standalone financial statements, where in as per the reasons stated by the management, Trade receivables of Rs. 356.70 lacs outstanding at the year end from Company's Overseas Subsidiary are considered realisable/ recoverable.
c. Attention is invited to Note No. 27.14 of the standalone financial statements, whereas the company has recognised Mat Credit entitlement for current financial year of Rs. 58.50 Lacs and up to 31st March 2015 of Rs. 551.85 Lacs. Our opinion is not modified in respect of these matters.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the order") issued by the Central Government of India in terms of sub–section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in Paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes 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, the 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 aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) On the basis of written representations received from the directors as on 31 March, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2015, from being appointed as a director in terms of Section 164(2) of the Act.
(f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
I. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements as referred to in Note 27.1.
II. The Company did not have any long–term contracts, including derivate contracts for which there were any material foreseeable losses.
III. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company except Rs. 0.15 Lacs which is held in abeyance due to legal case pending.
ANNEXURE TO THE AUDITORS' REPORT
ANNEXURE REFERRED TO IN INDEPENDENT AUDITORS' REPORT OF EVEN DATE TO THE MEMBERS
i) (a) The company has maintained proper records to show full particulars including quantitative details and situation of fixed assets.
(b) As explained to us, the company has not conducted physical verification of fixed assets during the year. In absence of physical verification of fixed assets material discrepancies if any, could not be ascertained.
ii) (a) Physical verification at reasonable intervals has been carried out by the management in respect of inventory except inventory lying with the outside parties, have been confirmed by them as at year end. In our opinion, the frequency of verification is reasonable.
(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.
(c) The Company has maintained proper records of inventory except in case of processed food division, where due to migration from Oracle to SAP on September 01, 2014, inventory as on migration date was not updated batch wise/ year wise in SAP. The discrepancies noticed on such physical verification as compared to book records were not material.
iii) Accordingly to the information and explanations given to us, the Group has not granted secured or unsecured loans to companies, firms or other party covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, paragraphs 3(iii) (a) and (b) of the order are not applicable
iv) In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items sold are of a special nature and comparable alternative prices are not available, there is an adequate internal control system commensurate with the size of the company and the nature of its business, with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, except as stated in para (ii) (c) herein above, we have neither come across nor we have been informed of any major weakness in internal controls procedures.
v) The company has accepted deposits from public during the year under audit and the directives issued by Reserve Bank of India and provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under have been generally complied with except a petition is under process with Company Law Board for repayment of fixed deposit accepted under The Companies Act, 1956. (Refer note no. 27.3 of standalone financials statement).
We are informed that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.
vi) We have been informed by the management, no cost records have been prescribed by Central Government under section 148(1) of the Companies Act, 2013 in respect of any of the Company's products or services.
vii) (a) The Company is generally regular in depositing undisputed statutory dues including provident fund, employees' state insurance, investor education and protection fund, sales–tax, income–tax, wealth tax, service tax, duty of customs, duty of excise, cess and other material statutory dues as applicable with the appropriate authorities.
According to the information and explanations given to us, no undisputed amount payable in respect of aforesaid statutory dues were outstanding as at 31st March, 2015 for the period of more than six months from the date they become payable except sales tax of 17.00 Lakhs which remains outstanding for a period of more than six months from the date it became payable.
(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the details of disputed amounts in respect of sales tax, income tax, wealth tax, service tax, value added tax, custom duty, and excise duty / cess not deposited with the appropriate authorities are as follow :
(c) The amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under has been transferred to such fund within time except Rs 0.15 lacs which is held in abeyance due to legal case pending.
viii) The Company neither has any accumulated losses nor has incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.
ix) Based on our audit procedures and as per the information and explanation given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to the banks and financial institution. The Company has not obtained any borrowing by way of debentures.
(x) To the best of our knowledge and belief and according to the information and explanations given to us the Company has given guarantee of Rs 1809.00 Lacs for loans taken by others from banks. In our opinion and based on the information and explanations given to us, the terms and conditions are not prejudicial to the interests of the Company.
xi) Based on information and explanations given to us by the management, term loan was applied for the purpose for which the loan was obtained.
xii) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the standalone financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year nor we have been informed of any such case by the management.
For KANTILAL PATEL & CO.,
Firm Regn. No. 104744W
Mayank S. Shah]
Membership No.: 44922
Date : June 01, 2015
Place : Ahmedabad