| We have audited the accompanying financial statements of Vadilal Dairy
International Limited (the Company), which comprise the Balance Sheet
as at March 31, 2014, 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
The Company's 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 notified under the Companies
Act, 1956 (the Act) read with the General Circular 15/2013 dated 13th
September, 2013 of the Ministry of Corporate Affairs in respect of
Section 133 of the Companies Act, 2013 and in accordance with the
accounting principles generally accepted in India. 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.
AUDITORS' 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 Company'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 aforesaid 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 of
the Company for the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows of the
Company 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 (the
Order) issued by the Central Government of
India in terms of Section 227(4A) 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, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d. In our opinion, the Balance Sheet, the Statement of Profit and
Loss, and the Cash Flow Statement comply with Accounting Standards
notified under the Act read with the General Circular 15/2013 dated
13th September, 2013 of the Ministry of Corporate Affairs in respect of
Section 133 of the Companies Act, 2013.
e. On the basis of the written representations received from the
directors as on March 31, 2014, 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 Section 274(1) (g) of
the Act.
Referred to in paragraph 1 of "Report on Other Legal and Regulatory
Requirements" of Our Report of even date.
On the basis of such checks as we considered appropriate and according
to the information and explanation given to us during the course of our
audit, we report that:
1. In respect of its fixed assets:
a. The company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets.
b. As explained to us, fixed assets have been physically verified by
the management at reasonable intervals; no material discrepancies were
noticed on such verification.
c. In our opinion and according to the information and explanations
given to us, no substantial fixed asset has been disposed off during
the year and therefore does not affect the going concern assumption.
2. In respect of its inventories:
a. As explained to us, inventories have been physically verified
during the year 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 business.
c. In our opinion and on the basis of our examination of the records,
the Company is generally maintaining proper records of its inventories.
As explained to us, the discrepancies noticed in physical verification
of the stock as compared to book records were not material and the same
have been properly dealt with in the books of accounts.
3. In respect of loans covered under Section 301 of the Companies Act,
1956.
a. As per the information and explanation given to us and the records
produced to us for our verification, the company has not granted loans,
secured or unsecured, to any Company, firms or other parties covered in
the register maintained under Section 301 of the Companies Act, 1956.
b. The Company has taken unsecured loan from parties covered in the
register maintained under section 301 of the Companies Act, 1956 whose
terms are not prejudicial to the interest of the company.
4. In our opinion and according to the information and explanations
given to us, there is generally an adequate internal control procedure
commensurate with the size of the company and the nature of its
business with regard to the purchases of inventories, fixed assets and
with regard to sale of goods. As per the information given to us, no
major weaknesses in the internal controls have been identified by the
management or the internal audit department of the company during the
year. During the course of our audit, nothing had come to our notice
that may suggest a major weakness in the internal control systems of
the company.
5. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
a. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements, that needed to be entered into the register maintained
under section 301 of the Companies Act, 1956 have been so entered.
b. As per information & explanations given to us and in our opinion,
transactions exceeding value of Rs. 5,00,000/- have been entered into
during the financial year are reasonable and for price justification,
reliance is placed on the information and explanation given by the
management.
6. The Company has not accepted any deposits from the public covered
under section 58A and 58AA of the Companies Act, 1956.
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 Rules made by the Central Government for maintenance of
Cost Records under Section 209 (1)(d) of the Companies Act, 1956.
9. In respect of statutory dues:
a. According to the information and explanations given to us,
undisputed statutory dues including Provident Fund, E.S.I.C.,
Profession Tax, Investor Education and Protection Fund, Income Tax,
TDS, Wealth Tax, Custom Duty, Cess and other material statutory dues
applicable to it have been regularly deposited with the appropriate
authorities except in few cases.
b. According to the information and explanation given to us,
undisputed amounts payable in respect of income tax, wealth tax,
customs duty, excise duty and cess and various other authorities were
in arrears as at 31.03.2014 for a period of more than six months from
the date they became payable is as follows :
Sr. Name of the Statute Name of the Dues Amount No
(in Lakhs)
1 Central Sales Tax Act and
Sales Tax Act of various states MVAT 426.35
2 Income Tax Act 1961 Fringe Benefit Tax 1.81
3 Central Excise Act, 1944 Excise Duty 4.24
Sr. Name of the Statute Period to which the
No amounts relates
1 Central Sales Tax Act and
Sales Tax Act of various states 2007-12
2 Income Tax Act 1961 2008-09
3 Central Excise Act, 1944 March 99 - June 99
c. According to the information and explanation given to us, following
are the various disputed liabilities against which appeals are pending
with various statutory authorities:
Sr. Name of the Statute Nature of Amount of Period to which
No dues Dispute the amounts
(Net) relates
(In Lakhs)
1 Central Sales Tax Act Sales Tax 43.05 1992-93
and Sales Tax Act of
12.60 1993-94
103.50 1994-95
25.88 1995-96
1.50 1999-00
0.29 2000-01
0.10 2001-02
MVAT & CST 140.28 2005-06
including
interest 172.86 2006-07
8.60 2008-09
315.27 2007-12
17.52 2009-10
2 Central Excise Excise Duty 101.35 1-4-98 to
Act 1944 Feb'99
Sr. Name of the Statute Nature of Forum where
No dues dispute is pending
1 Central Sales Tax Act Sales Tax Maharashtra Sales various
and Sales Tax Act of states Tax Tribunal and
Bombay High Court.
MVAT & CST Joint Commissioner of
including Sales Tax (Appeals)
interest
Board for Industrial
Financial Reconstruction
(BIFR) - Refer Note 1
Interest on MVAT Dues
2 Central Excise Excise Duty Refer Note 2
Act 1944
Note 1: The BIFR has granted various reliefs and concessions in its
order necessary for rehabilitation of our Company. One of such
concessions was granted in the form of exemption from payment of Sales
Tax/ VAT for a period of 5 years from cut-off date of the scheme i.e.
31.03.2007 during rehabilitation period. This concession was denied by
the Sales Tax Authority of the State Government of Maharashtra during
the financial year 2011-12. Against this denial the Company has filed
appeal with the BIFR praying to direct the Sales Tax Authorities to
grant relief to Our Company. The Final Judgment is yet to be ordered by
the BIFR.
Note 2: The Tribunal Appeal has been allowed in favour of the company.
However the excise department may file appeal to the higher authorities
10. In our opinion, the accumulated losses are more than fifty per
cent of its net worth. The company has not incurred cash losses during
the financial year covered by the audit but the company has however
incurred cash losses in the immediately preceding financial years.
11. Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
not defaulted in repayment of dues to financial institutions, banks and
debenture holders.
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 is not a chit fund or a nidhi /mutual benefit
fund/society. Therefore, the provision of this clause of the Companies
(Auditor's Report) Order, 2003 (as amended) are not applicable to the
Company.
14. According to information and explanations given to us, the Company
has not made any investments in shares during the year.
15. According to the information and explanations given to us, the
Company has not given any guarantees for loan taken by others from a
bank or financial institution.
16. Based on our audit procedures and on the information given by the
management, we report that the company has not raised any term loans
during the year.
17. Based on the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company as at 31st
March, 2014, we report that no funds raised on short-term basis have
been used for long-term investment similarly no funds raised on long
term basis have been used for short term investment. During the year,
the company has invested the funds in modernisation of plant which were
raised through Unsecured loans.
18. The Company has not issued any shares.
19. The Company has not issued any debenture.
20. The Company has not raised any money by public issue during the
year.
21. Based on the audit procedures performed and the information and
explanations given to us, we report that no fraud on or by the Company
has been noticed or reported during the year, nor have we been informed
of such case by the management.
For Vinod K. Mehta & Co.
Chartered Accountants
Firm Registration No. : 111508W
Sd/-
Vinod K. Mehta
Place: Mumbai (Partner)
Date: 28th June, 2014 M.No.: 006647 |