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Vardhman Acrylics Ltd.

BSE: 531106 Sector: Industrials
NSE: VARDHACRLC ISIN Code: INE116G01013
BSE 05:30 | 01 Jan Vardhman Acrylics Ltd
NSE 00:00 | 20 Feb 34.05 1.20
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Vardhman Acrylics Ltd. (VARDHACRLC) - Auditors Report

Company auditors report

To

The Members of

Vardhman Acrylics Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Vardhman AcrylicsLimited (‘the Company') which comprise the balance sheet as at 31 March 2018 thestatement of profit and loss (including other comprehensive income) the statement ofchanges in equity and the statement of cash flows for the year then ended and a summary ofthe 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 stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the Indian Accounting Standards (IndAS) prescribed under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; the selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder and the order issued under section143(11) of the Act.

We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Board of Directors aswell as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31 March 2018 and its profit total comprehensive income the changes in equity andthe 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 2016 (" theorder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A" which forms a part of thisreport a statement on the matters specified in the paragraph 3 and 4 of the order.

2. As required by Section 143(3) of the Act based on our audit we report that: (a)We have sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit; (b) In our opinionproper books of account as required by law have been kept by the Company so far as itappears from our examination of those books; (c) The balance sheet the statement ofprofit and loss (including other comprehensive income) the statement of cash flows andstatement of changes in equity dealt with by this Report are in agreement with the booksof account; (d) In our opinion the aforesaid standalone financial statements comply withthe Indian Accounting Standards prescribed under Section 133 of the Act read withrelevant rules issued thereunder; (e) On the basis of the written representations receivedfrom the directors of the Company as on 31st March 2018 taken on record by the Board ofDirectors none of the Directors is disqualified as on 31st March 2018 from beingappointed as a Director in terms of Section 164(2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the company's internal financial controls overfinancial reporting and; (g) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014 as amended in our opinion and to the best of our information and according to theexplanations given to us: i. The company has disclosed the impact of pending litigationson its financial position in its Standalone financial statements. Refer Note 33A to thestandalone financial statements. ii. The company did not have any long term contractsincluding derivative contracts for which there were any material foreseeable losses; andiii. There were no amounts which were to be transferred to the Investor Education andProtection Fund by the Company.

For SCV & Co;
Chartered Accountants
Firm Reg. No.000235N
Sd/-
(Sanjiv Mohan)
Place: Gurugram Partner
Date: 03rd May 2018 M. No. 086066

ANNEXURE - A TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Vardhman Acrylics Limited of evendate) (i) In respect of the Company's fixed assets:-(a) The Company has maintained properrecords showing full particulars including quantitative details and situation of fixedassets.

(b) The Company has a phased programme of physical verification of its fixed assetswhich in our opinion is reasonable having regard to the size of the Company and thenature of its assets. As part of this programme the management has physically verifiedcertain fixed assets during the year. According to the information and explanations givento us no discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company title deed of the immovable property is held inthe name of the Company.

(ii) According to the information and explanations given to us physical verificationhas been conducted by management at reasonable intervals in respect of finished goodsstores and spares and raw material. Further stock in the possession and custody of thirdparties and stock in transit as at 31st March 2018 has been verified by themanagement with reference to confirmation and statement of accounts or correspondence withthe third party or subsequent receipt of goods. In our opinion the frequency of suchverification is reasonable.

According to the information and explanations given to us no discrepancies werenoticed on such verification.

(iii) According to the information and explanations given to us we report that theCompany has not granted any loans secured or unsecured to companies firms limitedliability partnership or other parties covered in the register maintained under section189 of the Companies Act 2013.

Therefore the provisions of paragraph 3(iii) of the Order are not applicable to theCompany.

(iv) According to the information and explanations given to us the company hascomplied with the provisions of section 185 and 186 of the Act with respect of grant ofloans making investments and providing guarantees as applicable. (v) According to theinformation and explanations given to us the Company has not accepted any depositscovered under the provisions of sections 73 to 76 and any other relevant provision of theCompanies Act 2013 and the rules framed there under. According to information andexplanation given to us no order under its aforesaid sections has been passed by theCompany Law Board National Company Law Tribunal or the Reserve Bank of India or any courtor any other Tribunal on the Company.

(vi) We have broadly reviewed the books of account maintained by the company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Act and are of the opinion that prima facie the prescribed accountsand records have been made and maintained. We have however not made a detailedexamination of such records with a view to determine whether they are accurate orcomplete.

(vii) (a) According to the information and explanations given to us and on the basis ofthe records of the Company examined by us in our opinion the Company has been regular indepositing undisputed statutory dues including provident fund employees' state insuranceincome tax sales tax service tax duty of custom duty of excise value added tax cessgoods and service tax and other statutory dues applicable to it with the appropriateauthorities.

According to the information and explanations given to us no undisputed amounts inrespect of statutory dues payable were outstanding as on the last day of the financialyear concerned for a period of more than six months from the date they became payable asat 31st March 2018.

(b) According to the information and explanations given to us there are no dues ofduty of custom entry tax and income tax which have not been deposited with theappropriate authorities on account of any dispute. However according to the informationand explanations given to us the following dues of service tax value added tax salestax and duty of excise which have not been deposited by the company with the appropriateauthorities on account of dispute.

Nature of Statue Nature of Dues Forum at which dispute is pending Total Demand (in Lakhs) Paid under Protest (in Lakhs) Unpaid Financial Year to which in relates
The Gujarat Vat Tax Act 2003 VAT and CST Joint Commissioner of Commercial Tax Appeal-2 Vadodara 203.20 25.04 178.16 2009-10
The Gujarat Vat Tax Act 2003 VAT and CST GVAT Tax Tribunal Ahmedabad 132.54 20.00 112.54 2008-09
The Gujarat Vat Tax Act 2003 VAT and CST Joint Commissioner of Commercial Tax Appeal-2 Vadodara 43.27 43.27 2004-05 and 2005-06
The Punjab Vat Act 2005 VAT and CST Vat Tribunal Punjab 10.47 2.62 7.85 2009-10
The Finance Act 1994 Service Tax CESTATE Ahmedabad 2.98 0.29 2.69 2009-10 to 2013-14
The Finance Act 1994 Service Tax Commissioner Appeal Vadodara 2.90 0.22 2.68 2015-16 and 2016-17
The Finance Act 1994 Service Tax Additional Commissioner/ Superintendent Ankleshwar 34.72 34.72 2005-06 to 2009-10 and 2016-17 to 2017-18

(viii) According to the information and explanations given to us the Company has notdefaulted in repayment of loans or borrowings to a financial institution bank orgovernment.

The Company has not issued any debentures during the year or in the preceding year.

(ix) In our opinion and according to the information and explanations given to us thecompany has not raised any money by way of initial public offer or further public offer(including debt instruments) and term loans during the year.

Accordingly clause 3 (ix) of the Order is not applicable. (x) According to theinformation and explanations given to us no fraud by the company or on the company by itsofficers or employees has been noticed or reported during the course of our audit.

(xi) According to information and explanations given to us and based on our examinationof records of the company the company has paid/ provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Act.

(xii) According to the information and explanations given to us the company is not aNidhi Company. Therefore the provisions of paragraph 3(xii) of the Order are notapplicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the company transactions with the related parties are incompliance with section 177 and 188 of the Act where applicable and the details of thetransactions have been disclosed in the Ind AS financial statements as required by theapplicable accounting standards.

(xiv) According to the information and explanations given to us the company has notmade preferential allotment or private placement of shares or fully or partly convertibledebentures during the year under audit. Thus the provisions of paragraph 3(xiv) of theOrder are not applicable.

(xv) According to information and explanations given to us and based on ourexamination of the records of the company the company has not entered into non-cashtransactions with director or person connected with them. Accordingly provisions ofparagraph 3 (xv) of the Order are not applicable.

(xvi) According to the information and explanations given to us the company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For SCV & Co;
Chartered Accountants
Firm Reg. No.000235N
Sd/-
(Sanjiv Mohan)
Place: Gurugram Partner
Date: 03rd May 2018 M. No. 086066

ANNEXURE - B TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the members of Vardhman Acrylics Limited of evendate)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financials control over financial reporting of VardhmanAcrylics Limited ("the Company") as of 31st March 2018 in conjunctionwith our audit of standalone financial statements of company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Company management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting were established and maintained and if such controlsoperated effectively in all material respects. Our audit involves performing procedures toobtain audit evidence about the adequacy of the internal financial controls system overfinancial reporting and their operating effectiveness. Our audit of internal financialcontrols over financial reporting included obtaining an understanding of internalfinancial controls over financial reporting assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the Standalonefinancial statements whether due to fraud or error. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe Company's internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that: (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and (3) providereasonable assurance regarding prevention or timely detection of unauthorized acquisitionuse or disposition of the company's assets that could have a material effect on thefinancial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31 March 2018 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For SCV & Co;
Chartered Accountants
Firm Reg. No.000235N
Sd/-
(Sanjiv Mohan)
Place: Gurugram Partner
Date: 03rd May 2018 M. No. 086066