Vardhman ~Vardhman VARDHMAN TEXTILES LIMITED 1. Issuer details: | Delivering Excellence. Since 1965. 4.1. Details of the issuer: Annexure | Disclosures to be provided along with the application for listing CHANDIGARH ROAD LUDHIANA-141010, PUNJAB T: +91-161-2228943-48 F: +9]-161-2601 048 E: [email protected](i) Name Vardhman Textiles Limited Address Vardhman Premises, Chandigarh Road, Ludhiana-141010 CIN L17111PB1973PLC003345 PAN AABCM4692E (ii) Line of business: Manufacturing of Textile and related products (iii) Chief Executive: Mr. S.P. Oswal (Chairman & Managing Director) (iv) Group affiliation: Not Applicable 1.2. Details of the directors: Name, Age | Address Director since| List of other directorships designation and DIN Mr. Shri Paull 77 “Auro Mirra | 08/10/1973 1. Vardhman Holdings Limited Oswal, years | Bhawan” 2. Vardhman Acrylics Limited Chairman & 2722, Pakhowal 3. Nimbua Greenfield (Punjab) Managing Road, Limited Director, Ludhiana 4. VMT_ Spinning Company 00121737 Limited 5. Mahavir Spinning Mills Private Limited 6. Santon Finance And Investment Company Limited 7. Flamingo Finance And Investment Company Limited 8. Ramaniya Finance And Investment Company Limited 9g. Devakar Investment And Trading Company Private Limited Mrs. Suchita| 51 “Auro Mirra | 29/01/2010 1. Vardhman Holdings Limited Jain, years | Bhawan” 2. Vardhman Special Steels Vice-Chairperso 2722, Pakhowal Limited YARNS | FABRICS | THREADS | GARMENTS | FIBRES | STEELS PAN NO.: AABCM4692E CIN: L17E1EPBI973PLC003345 WWW.VARDHMAN.COM
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Vardhman
~Vardhman VARDHMAN TEXTILES LIMITED
1. Issuer details:
| Delivering Excellence. Since 1965.
4.1. Details of the issuer:
Annexure |
Disclosures to be provided along with the application for listing
CRA A INE825A070 | 3 759% }150 |8 Sep} 8 Sep/AA+ | Secured | first pari | Not
43 years 2017 2020 passu Appli
charge on | cable Fixed
Assets and
second
pari passu
charge on
Current
assets B INE825A070 | 4 7-69% |150 | 8 Sep|8 Sep | AA+ Secured | first pari | Not
50 years 2017 2021 passu Appli charge on | cable Fixed
Assets and
second
pari passu
charge on
Current
assets C INE825A070 | 5 7-754 |199.|8 Sep|8 Sep] AA+ Secured | first pari | Not
68 years 80 | 2017 2022 passu Appili charge on | cable Fixed
Assets and
second
pari passu
charge on
Current
assets
3.2. Details of secured/ unsecured loan facilities/ bank fund based facilities/ rest of the borrowing, if any, including hybrid debt like foreign currency convertible bonds (FCCB), optionally convertible debentures / preference shares from banks or financial institutions or financial creditors, as on last quarter end:
CERTIFIED TRUE COPY OF RESOLUTION PASSED BY BOARD OF DIRECTORS IN ITS
MEETING HELD ON 6" FEBRUARY, 2019
“RESOLVED THAT in supersession of earlier resolution dated 9" November, 2016 passed by the Board of Directors in this respect and pursuant to Section 179 of the Companies Act, 2013 and all other applicable provisions of Companies Act, 2013, if any, the approval of Board of Directors be and is hereby given to severally authorise Mr. S.P Oswal, Chairman
& Managing Director, Mr. Neeraj Jain, Joint Managing Director, Mr. Sachit Jain and Mr. D.L. Sharma, Directors along with anyone of Mr. Rajeev Thapar, Chief Financial Officer, Mr. Akshay Jain, VP (Finance) and Mr. Neeraj Gupta, AVP (Accounts) to borrow money in any form and against any money market instruments including Commercial Paper upto a limit
of Rs. 1,000.00 crore, outstanding at any point of time, apart from the borrowings specifically approved/ratified by the Board of Directors for and on behalf of the Company and for that matter to sign/execute loan documents, Commercial Papers and/or all the necessary papers/documents as may be required in this regard and to take all such steps
as may be deemed necessary in the matter.
RESOLVED FURTHER THAT common seal of the Company required, if any, be affixed on any of the abovesaid papers/documents in the presence of any of the abovesaid directors
who shall countersign the same in token of his approval”.
Repori on the Standalone Ind AS Financial Statements
¢ audited the accompanying standalone Ind AS financial statements of Vardhman Textiles
i Cth: Company’), which comprise the balance sheet as at 31 March 2017, the statement of
|. joss inetuding other comprehensive income), the statement of cash flows and the statement
in equity for the year then ended and a summary of the significant accounting policies and
other cxyinatory information (herein after referred to as “standalone Ind AS financial statements”).
(Pan 2
ent’s Responsibility for the Standalone Financial Statements
The Compiny’s Board of Directors is responsible for the matters stated in Section 134(5) of the
‘ci, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial
statenicrts that give a true and fair view of the financial position, financial performance including
oiler comprehensive income, cash flows and changes in equity of the Company in accordance with
che accounting principles generally accepted in India, including the Indian Accounting Standards (Ind
AS) nrescribed under Section 133 of the Act read with relevant rules issued thereunder.
Commies
‘this responsibility also includes maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and for preventing and detecting
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 adequate internal financial controls, that were operating effectively for ensuring the
uce'lracy and completeness of the accounting records, relevant to the preparation and presentation of
the standalone Ind AS financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these standalone Ind AS 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 thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under Section
. i43(/u) 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 standalone Ind AS financial
Staiements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the
disclosures in the standalone Ind AS financial statements. The procedures selected depend on the
auditer’s judgment. including the assessment of the risks of material misstatement of the standalone
Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the
H. O. : B-41, Panchsheel Enclave=Wéw Dethi - 110 017. Tel.: 26499111, 26499222, 26499444, 26499555, Fax : +91-11-41749444
B. O. : D-62, Panchsheel Enclave, New Delhi - 110.017. Tel.: 26497629, 26497630
S. C. Vasudeva & Co. Continuation Sheet No.
auditor considers internal financial control relevant to the Company’s preparation of the standalone
ind AS financial statements that give a true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the appropriateness of the
accounting policies used and the reasonableness of the accounting estimates made by the Company’s
Directors, as well as evaluating the overall presentation of the standalone Ind AS 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 Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the
aforesaid standalone Ind AS 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 including the Ind AS, of the financial position of the Company as at
31 March, 2017, and its financial performance including other comprehensive income, its cash flows
and the changes in equity 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 (“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, which forms a part of this report, 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, 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 it appears from our examination of those books;
(c) the balance sheet, the statement of profit and loss (including other comprehensive income) ,
the statement of cash flows and the statement of changes in equity dealt with by this Report
are in agreement with the books of account;
(d) in our opinion, the aforesaid standalone Ind AS financial statements comply with the
Accounting Standards specified under Section 133 of the Act read with relevant rule issued
thereunder;
(e) on the basis of the written representations received from the directors as on 31 March 2017
taken on record by the Board of Directors, none of the directors is disqualified as on 31 March
2017 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) with respect to the adequacy of the internal financial controls over financial reporting of the
Company and the operating effectiveness of such controls, refer to our separate report in
“Annexure B”: and
S. C. Vasudeva & Co. Continuation Sheet No.
(g) _ 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:
iti.
the Company has disclosed the impact of pending litigations on its financial position
in its standalone Ind AS financial statements. Refer Note No. 37 of standalone Ind AS
financial statements.
the Company did not have any long term contracts including derivative contracts for
which there were any material foreseeable losses.
there has been no delay in transferring amounts, required to be transferred, to the
Investor Education and Protection Fund by the Company; and
the Company has provided requisite disclosures in its standalone Ind AS financial
statements as to holdings as well as dealings in Specified Bank Notes during the
period from 8 November, 2016 to 30 December, 2016 and these are in accordance
with the books of accounts maintained by the Company. Refer Note No. 55 of
standalone Ind AS financial statements.
For S.C. Vasudeva & Co,
Chartered Accountants
irm Reg. No.000235N
gujiv Mohan)
Partner
" M. No. 086066
Ludhiana
10" May, 2017
S. C. Vasudeva & Co. Continuation Sheet No.
Annexure - A to the Auditors’ Report
The Annexure referred to the Independent Auditors’ Report to the members of the Company on the
Standalone Ind AS financial statements for the year ended 31 March 2017, we report that:
qa) a) The Company has maintained proper records showing full particulars, including quantitative
details and situation of fixed assets.
b) According to the information and explanations given to us, the Company has adopted a
policy of physical verification of the fixed assets once in every three years, Pursuant to the
said policy, the Company has physically verified the entire block of Plant and Machinery
during the year under audit. Discrepancies noticed on such physical verification were not
material and have been properly dealt with in the books of account.
c) According to information and explanations given to us and on the basis of our examination
of the records of the company, the title deeds of immovable properties are held in the name
of the company.
(ii) According to the information and explanations given to us, the inventories have been
physically verified by the management during the year. In our opinion the frequency of
verification is reasonable.
According to the information and explanations given to us, discrepancies noticed on physical
verification of inventory as compared to the book records were not material and have been
dealt with in the books of account.
(iii) According to the information and explanations given to us, we report that the Company has
granted loans to two companies covered in the register maintained under section 189 of the
Companies Act, 2013.
(a) In our opinion, the rate of interest and other terms and conditions on which the loans had
been granted to the bodies corporate Jisted in the register maintained under Section 189 of the Act were not, prima facie, prejudicial to the interest of the Company
(b) The borrowers have been regular in the payment of the principal and interest as stipulated.
(c) There are no overdue amounts in respect of the loan granted to a body corporate listed in
the register maintained under section 189 of the Act.
(iv) According to the information and explanations given to us, the Company has complied with the
requirements of the section 186 of the Companies Act, 2013 pursuant to loans granted and
investments made. The company has not granted loans to directors or to the person in whom
directors are interested. Therefore the provisions of the section 185 of the Companies Act,
2013 are not applicable to the company.
Gv) According to the information and explanations given to us, the Company has not accepted any
deposits covered under the provisions of sections 73 to 76, other relevant provisions of the
s C. Vasudeva & Co Continuation Sheet No.
Companies Act, 2013 and the rules framed there under. According to the information and
explanations given to us, no order under the aforesaid sections has been passed by the
Company Law Board, National Company Law Tribunal or Reserve Bank of India or any
Court or any other Tribunal on the Company.
(vi) We have broadly reviewed the books of account maintained by the company pursuant to the
rules made by the Central Government for the maintenance of cost records under section
148(1) of the Act and are of the opinion that prima facie, the prescribed accounts and records
have been made and maintained. We have, however, not made a detailed examination of such
records with a view to determine whether they are accurate or complete.
(vii) (a) According to the information and explanations given to us and on the basis of the records of the
Company examined by us, in our opinion, the Company has been regular in depositing
undisputed statutory dues including provident fund, employees’ state insurance, income tax,
sales tax, service tax, duty of custom, duty of excise, value added tax, cess and other statutory
dues with the appropriate authorities. According to the information and explanations given to
us, no undisputed amounts in respect of statutory dues payable were outstanding as on the last
day of the financial year concerned for a period of more than six months from the date they
became payable.
. (b) According to the information and explanations given to us, there are no dues of duty of custom,
which have not been deposited with the appropriate authorities on account of any dispute.
However according to information and explanations given to us, the following dues of Income
Tax, Value Added Tax, Sale Tax Act, Service Tax and duty of Excise have not deposited by the
company on account of dispute:
(Rs. in Lacs)
Sr. | Name of Statute Total Paid Unpaid | Financial | Forum at which dispute is No. Demand under Year to pending.
Protest which it
relates 1 | Central Excise Act 2009-10 Commissioner Appeals,
1944 1.02 - 1.02 Bhopal 2 | Central Excise Act 2009-10 Customs Excise & Service Tax
1944 26.67 8.00 18.67 Appellate Tribunal, Delhi
3 | Central Excise Act 2009-10 Customs Excise & Service Tax
1944 216.06 -{ 216.06 Appellate Tribunal, Delhi , 4 | Central Excise Act 2013-14 Customs Excise & Service Tax
1944 34.59 - 34.59 Appellate Tribunal,
Chandigarh
5 | Central Excise Act 2008-09 | Hon'ble Supreme Court, New 1944 4.26 - 4.26 Delhi
6 | Central Excise Act 2008-09 Commissioner Appeals,
1944 6.51 1.63 4.88 Chandigarh
7 | Central Excise Act 2006-07 Customs Excise & Service Tax
1944 5.80 1.00 4.80 Appellate Tribunal, Delhi
8 | Central Excise Act Jan 2008 to | Customs Excise & Service Tax
1944 66.66 1.94 64.72 | March 2011 | Appellate Tribunal, Delhi 9 j Central Excise Act 2003-04, Commissioner Appeals,
Cash end cash equivalents i 3,822.39 21,368.82 5,908.75 Bank Balance other than above A 224.72 6,308.14 11,646.02 ~Loans 12 3,656.20 2,928.02 3,688.67 Other financial assets 13 4,047.49 4,613.67 3,589.06
(c) Current tax assets (net) 4,513.57 2,191.25 1,139.55 (d) Other current assets 14 27,109.82 28,706.33 28,565.48
Total Current assets 3,41,125.92 3,24,086.67 3,05,551.50
TOTAL ASSETS 6,95,852.75 6,98,533.30 6,47,440.57
EQUITY AND LIABILITIES
Equity (a) Equity Share capital 18 5,592.88 6,205.34 6,205.31 (b) Other Equity 16 3,92,991,86 3 62,786.73 311,173.16
Sachit nit Je S.P, Oswalt Joint Managing Directo Chairman and
DIN : 00746409 Managing Director
DIN: 00121737
y ARDUMAN TEXTILES LIMITED
“ASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2017
FLOW FROM OPERATING ACTIVITIES
e( Profit before Exceptional items and tax
Adjustments for :
Depreciation and amortisation Interest expense
Fair Valuation Gain on Investment Subsidy Income Prepayments of Leasehold land
laterest income Dividend income
{ ProfitLoss on sale of Assets(Net) (Profity/Loss on sale of Investments (Net)
Provision no longer required written Back(Net)
Sundey balance written back Excess income written off Amortisation of Processing Charges. Fixed assets written off
Bad debts written off Allowances for doubtful trade receivables and net off advances written back
Changes in Working capital Adjustments for : .
(Increase Decrease in Trade and other Receivables (IncreaseV/Decrease in Inventories Increase/( Decrease) in Trade Payables and other Liabilities
Cash generated fiom Operations
Net Income tax paid.
Net cash flow from/ (used in) operating activities
B.CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets
Proveeds from sale of Fixed Assets Purchase of fnvestments Purchase of shares of Subsidiary
Proceeds from sale of Investments
interest received
Dividend received
[Net Cash used in investing activities
C.CASH FLOW FROM FINANCING ACTIVITIES Proceeds’ (Repayment) from Long Term Borrowings(Net) Proceeds’ (Repayment) from Short Term Bortowings(Net) Proceeds/ (Repayment) from Equity Share Capital Capital Subsidy received Dividend Paid (including taxes) lmerest Paid Net Cash flow from/{used in) Financing Activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year Bank Balances not considered as cash and cash equivalents
The accompanying notes are integral part of these financial statements
“ASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2017
FLOW FROM OPERATING ACTIVITIES
e( Profit before Exceptional items and tax
Adjustments for :
Depreciation and amortisation Interest expense
Fair Valuation Gain on Investment Subsidy Income Prepayments of Leasehold land
laterest income Dividend income
{ ProfitLoss on sale of Assets(Net) (Profity/Loss on sale of Investments (Net)
Provision no longer required written Back(Net)
Sundey balance written back Excess income written off Amortisation of Processing Charges. Fixed assets written off
Bad debts written off Allowances for doubtful trade receivables and net off advances written back
Changes in Working capital Adjustments for : .
(Increase Decrease in Trade and other Receivables (IncreaseV/Decrease in Inventories Increase/( Decrease) in Trade Payables and other Liabilities
Cash generated fiom Operations
Net Income tax paid.
Net cash flow from/ (used in) operating activities
B.CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets
Proveeds from sale of Fixed Assets Purchase of fnvestments Purchase of shares of Subsidiary
Proceeds from sale of Investments
interest received
Dividend received
[Net Cash used in investing activities
C.CASH FLOW FROM FINANCING ACTIVITIES Proceeds’ (Repayment) from Long Term Borrowings(Net) Proceeds’ (Repayment) from Short Term Bortowings(Net) Proceeds/ (Repayment) from Equity Share Capital Capital Subsidy received Dividend Paid (including taxes) lmerest Paid Net Cash flow from/{used in) Financing Activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year Bank Balances not considered as cash and cash equivalents
The accompanying notes are integral part of these financial statements
Report on the Consolidated Ind AS Financial Statements
We have audited the accompanying consolidated Ind AS financial statements of Vardhman Textiles
Limited (“the Holding Company”) and its subsidiaries, its associates and its joint venture (collectively
referred to as “the Company” or “the Group”), which comprise the consolidated balance sheet as at 31
March 2017, the consolidated statement of profit and loss (including other comprehensive income), the
consolidated statement of cash flows and the consolidated statement of changes in equity for the year then
ended and a summary of the significant accounting policies and other explanatory information
(hereinafter referred to as “the consolidated Ind AS financial statements”).
Management’s Responsibility for the Consolidated Ind AS Financial Statements
The Holding Company’s Board of Directors is responsible for the preparation of these consolidated Ind
AS financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to
as “the Act”) that give a true and fair view of the consolidated financial position, consolidated financial
performance including other comprehensive income, consolidated cash flows and consolidated changes in
equity of the Group in accordance with the accounting principles generally accepted in India, including
the Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with relevant rules
issued thereunder. The respective Board of Directors of the companies included in the Group are
responsible for maintenance of adequate accounting records in accordance with the provisions of the Act
for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities;
the selection and application of appropriate accounting policies; making judgments and estimates that are
reasonable and prudent; and the design, implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the accuracy and completeness of the accounting
records. relevant to the preparation and presentation of the consolidated Ind AS financial statements that
give a true and fair view and are free from material misstatement, whether due to fraud or error, which
have been used for the purpose of preparation of the consolidated Ind AS financial statements by the
Directors of the Holding Company, as aforesaid.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated Ind AS financial statements based on our
audit.
While conducting the 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 thereunder.
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 consolidated Ind AS financial statements are free from
material misstatement.
H. O. : B-41, Panchsheel Enclave, New Delhi - 110 017. Tel.: 26499111, 26499222, 26499444, 26499555, Fax : +91-11-41749444
B. O. : D-62, Panchsheel Enclave, New Delhi - 110 017. Tel.: 26497629, 26497630
. S. C. Vasudeva & Co Continuation Sheet No.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures
in the consolidated Ind AS financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the consolidated Ind AS
financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Holding Company’s preparation of the consolidated Ind
AS financial statements that give a true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of the accounting estimates made by the Holding Company’s Board
of Directors, as well as evaluating the overall presentation of the consolidated Ind AS financial
statements.
We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in
terms of their reports referred to in sub-paragraph of the other Matters paragraph below, is sufficient and
appropriate to provide a basis for our audit opinion on the consolidated Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the
aforesaid consolidated Ind AS 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 including the Ind AS, of the consolidated financial position of the Group, as at 31 March 2017
and its consolidated financial performance including other comprehensive income, its consolidated cash
flows and the consolidated changes in equity for the year then ended.
Other Matter
We did not audit the Ind AS financial statements/financial information of two subsidiaries, whose
Ind AS financial statements/financial information reflect total assets of Rs.59,505.09 Lac as at 3ist
March, 2017, total revenue of Rs. 37,921.85 Lac, total comprehensive income of Rs. 4,925.25 Lac, and
net cash flows amounting to Rs. 816.32 Lac for the year ended 31st march, 2017 as considered in the
consolidated Ind AS financial statements. The consolidated Ind AS financial statements also include the
group's share of total comprehensive income of Rs. 3653.17 Lac for the year ended 31st March, 2017,
as considered in the Consolidated Ind AS Financial Statements, in respect of two associate and one joint
venture, whose Ind AS financial statement/financial information have not been audited by us. These Ind
AS financial statements/financial information have been audited by other auditors whose reports have
been furnished to us by the Management and our opinion on the consolidated Ind AS financial
, statements, in so far as it relates to the amounts and the disclosures included in respect of these
subsidiaries and associates and our report in terms of sub sections (3) and (11) of Section 143 of the Act,
insofar as it relates to the aforesaid subsidiaries and associates, is based solely on the reports of the other
auditors.
Our opinion on the Consolidated Ind AS Financial Statements, and our report on Other Legal and
Regulatory Requirements below, is not modified in respect of the above matters with respect to our
reliance on the work done and reports of other auditors.
. S. C. Vasudeva & Co Continuation Sheet No.
Report on Other Legal and Regulatory Requirements
1. 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 of the aforesaid consolidated Ind AS financial
statements.
(b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid
consolidated Ind AS financial statements have been kept so far as it appears from our examination of
those books.
(c) The consolidated balance sheet, the consolidated statement of profit and loss, the consolidated
statement of cash flows and consolidated statement of changes in equity dealt with by this Report are in
agreement with the relevant books of account maintained for the purpose of preparation of the
consolidated Ind AS financial statements.
(d) In our opinion, the aforesaid consolidated Ind AS financial statements comply with the Accounting
Standards specitied under Section 133 of the Act, read with relevant rules issued thereunder.
(e) On the basis of the written representations received from the directors of the Holding Company as on
31 March 2017 taken on record by the Board of Directors of the Holding Company and the reports of the
statutory auditors of its subsidiary companies incorporated in India, none of the Directors of the Group
companies incorporated in India is disqualified as on 31 March 2017 from being appointed as a Director
of that company in terms of Section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Group
and the operating effectiveness of such controls, refer to our separate report in “Annexure A”; and
(g) 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 consolidated Ind AS financial statements disclose the impact of pending litigations on
the consolidated financial position of the Group.
il. the Company did not have any long term contracts including derivative contracts for
which there were any material foreseeable losses; and
iti. there has been no delay in transferring amounts, required to be transferred, to the Investor
Education and Protection Fund by the Holding Company and its subsidiary companies
incorporated in India; and
S. C. Vasudeva & Co. Continuation Sheet No.
iv. the Company has provided requisite disclosures in its consolidated Ind AS financial
statements as to holdings as well as dealings in Specified Bank Notes during the period
from 8 November, 2016 to 30 December, 2016 and these are in accordance with the
books of accounts maintained by the Company.
For S.C, Vasudeva & Co,
Chartered Accountants
Firm Reg. No.000235N
a AO ee
(Sanjiv Mohan)
Partner
M. No. 086066
Ludhiana
10" May, 2017
. s. C. Vasudeva & Co Continuation Sheet No.
Annexure - A to the Auditors’ Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the
Companies Act, 2013 (“the Act”)
In conjunction with our audit of the consolidated Ind AS financial statements of the Company as of and
for the year ended 31 March 2017, we have audited the internal financial controls over financial reporting
of Vardhman Textiles Limited (“the Holding Company”) and its subsidiary companies, its associates and
joint ventures which are companies incorporated in India, as of that date.
Management’s Responsibility for Internal Financial Controls
The Respective Board of Directors of the Holding Company, its subsidiary companies and its associate,
which are companies incorporated in India, are responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria established by the
Company considering the essential components of internal contro! stated in the Guidance Note on Audit
of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants
of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate
internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of
its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and
detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely
preparation 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 financial controls over financial
reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of
Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by ICAI and the
Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the
Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both issued by the
Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether adequate internal financial controls over financial reporting was established and maintained and
if such controls operated effectively in all material respects.
, Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal
financial controls system over financial reporting and their operating effectiveness. Our audit of internal
financial controls over financial reporting included obtaining an understanding of internal financial
controls over financial reporting, assessing the risk that a material weakness exists, and testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk. The
procedures selected depend on the auditor’s judgment, including the assessment of the risks of material
misstatement of the Ind AS financial statements, whether due to fraud or error.
a Ss. C. Vasudeva & Co Continuation Sheet No.
| We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion on the 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 designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles.
A company’s internal financial contro! over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and
directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition,
use, or disposition of the company's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the
possibility of collusion or improper management override of controls, material misstatements due to error
or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial
controls over financial reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Holding Company, its subsidiary companies, its associates and its joint venture, which
are companies incorporated in India, have, in all material respects, an adequate internal financial controls
system over financial reporting and such internal financial controls over financial reporting were
operating effectively as at 31 March 2017, based on the internal control over financial reporting criteria
established by the Company considering the essential components of internal contro] stated in the
Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.
S. Cc. Vasudeva & Co. Continuation Sheet No.
Other Matter
Our aforesaid reports under section 143(3\(i) of the Act on the adequacy and operating effectiveness of I
the internal financial controls over financial reporting in so far as it relates to two subsidiary companies,
two associate and one joint venture, which are companies incorporated in India, is based on the |
corresponding reports of the auditors of such companies incorporated in India. i
For S.C. Vasudeva & Co,
Chartered Accountants
Firm Reg. No.000235N
M. No. 086066
Ludhiana
10" May, 2017
VARDELMAN TEN TILES LIMITED
CONSOLIDATED BALANCE SHEE’
Particulars
ASSETS
{ Non-current assets
(aj Property, Plaat and Equipuient
(0) Capital work-in-progiess
{e) Goodwill id) Other Jotangnble Assets
(e) Investment in associates and yous ventures
(f) Financial Assets
Investments.
-Loans
-Others financial assets (y} Other non-current 1S,
Total Non-current assets
2 Current assets
(a) Inventories (b) Financial Assets
-tavesiments -Trade receivables ~Cash and cash equivalents -Bank Balance other than above -Loans
-Other financial assets (c} Current tax assets (net) (d) Other current assets ‘Total Current assets
TOTAL ASSETS EQUITY AND LIABILITIES
Equity (a) Equity Share capital
(b} Other Equity (c} Non-controtting interests.
- Equity Share capitat
- Otter Equity
Total Equity
Liabilities
t Nen-current finbilities (a) Financial Liabihties
Borrowings -Othes finangial liabilines
(b) Provisions (e) Deferred tax tiabililies (Net) (Wh Other non-current liabilities Total Non-current liabilities
Basic - Par value of Rs. 10 per share 163.40 100.89
Dituted ~ Par value of Rs. 10 per share 163.10 100.83
The accompanying notes are integral part of these consolidated financial statements
AS per our report of even date
For S. C. Vasudeva & Co., Chartered Accountants
wo
Rajeev Thapar S.P. Oswal
Chief Financial Joint Managing Direct« Chairman and Officer DIN : 00746409 Managing Director DIN: 60121737
Place : Ludhiana Dated: 10-05-2017
VAROUMAN TEXTILES LIMITED
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2017
A.CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before Exexceptional items and tax
Adjustments for +
Depreciation and amortisation 34,339.74 lacome from associates (3,685.53) Ingerest expense 11,622.01
Fair Valuation Gain on Investments (9,967.74) Subsidy Income (189.33) Prepayments of Leasehold land 815
Interest income (3,121.66) Dividend income (1,462.11)
( Protit}/Loss on sale of Assets(Net) (6,415.33)
(Profit'Loss on sale of Investments (Net) (28,109.57) Provision no fonger required written Back(Net} (360.71)
Amortisation of Processing Charges 92.75 Fixed assets written off 438.35
Bad debts written off 358.75 Allowances for doubtful trade receivables and advances writien back 274.44
{Inctease)/Decrease in Trade and other Receivables 5,845.83 (Increase)/Decrease in Inventories 48,374.22 Increase/(Decrease) in Trade Payables and other Liabilities 10,279.47
Cash generated fram Operations
Net income tax paid (30,865.96)
Net cash flow from/ (used in) operating activities
11 FLOW FROM INVESTING ACTIVITIES
se: OF Fixed Assets. (30,994.04)
Proc from sale of Fixed Assets 8,654.85 Purchase of Investments (108,748.38)
Proce rom sate of Investments 90,333.75 Interest yeceived 4,971.69
Dividend received 1462.11
Net Cash used in investing activities
C.CASH FLOW FROM FINANCING ACTIVITIES Proceeds: (Repayment) from Long Term Berrowings(Net) (41,812.67)
Proe (Repayment) from Short Tern Borrowings(Net) 3,884.69 Proceeds! (Repayment) from Equity Share Capital (68,838.80)
Dividend Paid (including taxes) (93.11)
(11,491.10) Interest Paid Net Cast Row froav(used itt} Financing Activities
Net Increase in cash and cash equivalents
ash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year
She accompanying notes are integral part of these consolidated financial statements
Deloitt Chartered A e€ ne e 7° Floor Building 10, Tower B DLF Cyber City C i Haskins & Sells LLP OE ate complex Gurugram - 122 002 Haryana, India
Tel: +91 124 679 2000 Fax: +91 124 679 2012
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF VARDHMAN TEXTILES LIMITED Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Vardhman Textiles Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Ind AS Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) / of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone N Ind AS financial statements that give a true and fair view of the financial position, financial
performance including other comprehensive income, cash flows and changes in equity of the Company .in accordance with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting 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 adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
( Our responsibility is to express an opinion on these standalone Ind AS financial statements ~ based on our audit.
In conducting 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 thereunder and the Order
issued under section 143(11) of the Act.
We conducted our audit of the standalone Ind AS financial statements 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 standalone Ind AS financial statements are free
from material misstatement.
a Regd. Office: Indiabulls Finance Centre, Tower 3, 27" - 32” Floor, Senapati Bapat Marg, Elphinstone Road (West), Mumbai - 400 013, Maharashtra, india.
(LLP Identification No. AAB-8737)
a
Deloitte Haskins & Sells LLP
yr
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 Ind AS and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. 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 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 it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.
d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act.
e} On the basis of the written representations received from the directors of the Company as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting for the reasons stated therein.
J
Deloitte Haskins & Sells LLP
g) 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, as amended, 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 Ind AS financial statements — Refer to Note 38(a) to the standalone Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses ~ Refer to Note 38(e) to the standalone Ind AS financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company
2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No. 117366W / W-100018) { f
Vijay Agarwal
(Partner) (Membership No. 094468)
Place: Ludhiana
Date: May 12, 2018
Deloitte Haskins & Sells LLP
ANNEXURE “A” TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory
Requirements’ section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause
(i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
We have audited the internal financial controls over financial reporting of Vardhman
Textiles Limited (“the Company”) as of March 31, 2018 in conjunction with our audit of
the standalone Ind AS financial statements of the Company for the year ended on that
date.
Management's Responsibility for Internal Financial Controls
The Company’s management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria established
by the Company considering the essential components of internal control stated in the
Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by
the Institute of Chartered Accountants of India. These responsibilities include the design,
implementation and maintenance of adequate internal financial controls that were
operating effectively for ensuring the orderly and efficient conduct of its business, including
adherence to company’s policies, the safeguarding of its assets, the prevention and
detection of frauds and errors, the accuracy and completeness of the accounting records,
and the timely preparation of reliable financial information, as required under the
Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company's internal financial controls
over financial reporting of the Company based on our audit. We conducted our audit in
accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India
and the Standards on Auditing prescribed under Section 143(10) of the Companies Act,
2013, to the extent applicable to an audit of internal financial controls. Those Standards
and the Guidance Note require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether adequate internal
financial controls over financial reporting was established and maintained and if such
controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting, assessing
the risk that a material weakness exists, and testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditor’s judgement, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Company's internal financial controls system
over financial reporting.
Deloitte Haskins & Sells LLP
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial. reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the 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 given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the criteria for internal financial control over financial reporting established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No. 117366W / W-100018)
Vijay Agarwal
(Partner) (Membership No. 094468)
Place: Ludhiana
Date: May 12, 2018
& Wy
Deloitte Haskins & Sells LLP
et
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ Section of our report of even date)
(i)
(ii)
(a)
(b)
(c)
The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
The Company has a program of verification to cover all the items of fixed assets in a phased manner which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.
According to the information and explanations given to us, the records examined by us and based on the examination of the registered sale deeds and transfer deeds / conveyance deeds and the confirmations received by us from “ICICI Bank Limited and IDBI Bank Limited” (custodians) on behalf of term and consortium lenders for the credit facility extended to the Company against immovable properties whose title deeds have been pledged as security for obtaining credit facility and the same are held in the name of Company.
We report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date, except the following:
Particulars of Land | Carrying value as Remarks and building at March 31, 2018
(Rs. In Crore)
Freehold land located at 4.38 Pending registration in Chandigarh the name of Company admeasuring 1170.56 square meters.
As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals other than for stock lying with third parties and/or goods in transit for which confirmation have been obtained/subsequent receipts have been verified in most of the cases. The discrepancies noticed on physical verification of inventories as compared to book records were not material and have been properly dealt with in the books of account.
Deloitte Haskins & Sells LLP
(iii)
(iv)
(v)
(vi)
(vii)
According to the information and explanations given to us,'the Company has
granted unsecured loans to three bodies corporate, covered in the register
maintained under Section 189 of the Companies Act, 2013, in respect of which:
a. The terms and conditions of the grant of such loans are, in our opinion, prima
facie, not prejudicial to the Company’s interest.
b. The schedule of repayment of principal and payment of interest has been
stipulated and repayments or receipts of principal amounts and interest have
been regular as per stipulations.
c. There is no overdue amount remaining outstanding as at the year-end.
In our opinion and according to the information and explanations given to us, the
Company has complied with the provisions of Sections 185 and 186 of the Act in
respect of grant of loans, making investments and providing guarantees and
securities, as applicable.
The Company has not accepted deposits during the year and does not have any
unclaimed deposits as at March 31, 2018 and therefore, the provisions of the clause
3 (v) of the Order are not applicable to the Company.
The maintenance of cost records has been specified by the Central Government
under Section 148(1) of the Companies Act, 2013. We have broadly reviewed the
cost records maintained by the Company pursuant to the Companies (Cost Records
and Audit) Rules, 2014, as amended prescribed by the Central Government under
sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion
that, prima facie, the prescribed cost records have been made and maintained. We
have, however, not made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
According to the information and explanations given to us, in respect of statutory
dues:
(a) The Company has generally been regular in depositing undisputed statutory
dues, including provident fund, employees’ state insurance, income-tax,
sales tax, service tax, customs duty, excise duty, value added tax, goods
and services tax, cess and other material statutory dues applicable to it with
the appropriate authorities.
(b) There were no undisputed amounts payable in respect of provident fund,
employees’ state insurance, income-tax, sales tax, service tax, Customs
duty, excise duty, value added tax, goods and services tax, cess and other
material statutory dues applicable in arrears as at March 31, 2018 for a
period of more than six months from the date they became payable.
Wy:
Deloitte Haskins & Sells LLP
(viii)
(c) Details of dues of excise duty, sales tax, value added tax, service tax and
income-tax which have not been deposited as on March 31, 2018 on account
of disputes are given below and there are no dues of customs duty as on
March 31, 2018 on account of disputes
Amount
Forum x | Paid | Amount
Nature Nature where period Amount™ | under | unpaid
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF VARDHMAN TEXTILES LIMITED
Report on the Consolidated Ind AS Financial Statements
We have audited the accompanying consolidated Ind AS financial statements of Vardhman Textiles Limited (hereinafter referred to as "the Parent") and its subsidiaries (the Parent and its subsidiaries together referred to as "the Group"), which includes Group’s share of profit in its associates and its joint venture, comprising the Consolidated Balance Sheet as at March 31, 2018, the Consolidated Statement of Profit and Loss (including other comprehensive income), the Consolidated Cash Flow Statement, the Consolidated Statement of Changes in Equity, for the year then ended, and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the consolidated Ind AS financial statements”).
Management's Responsibility for the Consolidated Ind AS Financial Statements
The Parent's Board of Directors is responsible for the preparation of these consolidated Ind AS financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as "the Act") that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive income, consolidated cash flows and consolidated statement of changes in equity of the Group including its Associates and Joint venture in accordance with the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India. The respective Board of Directors of the companies included in the Group and of its associates and joint venture are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group, its associates and its joint venture and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, impiementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated Ind AS financial statements by the Directors of the Parent, as aforesaid.
Auditor's Responsibility
Our responsibility is to express an opinion on these consolidated Ind AS financial statements based on our audit. In conducting 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 thereunder.
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 consolidated Ind AS financial statements are free from materia! misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated Ind AS financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Parent's preparation of the consolidated Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Parent's Board of Directors, as well as evaluating the overall presentation of the consolidated Ind AS financial statements.
We believe that the audit evidence obtained by us and other auditors in terms of their reports referred to Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the consolidated Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of the other auditors on separate financial statements of the subsidiaries, associates and joint venture referred to below in the Other Matters paragraph, the aforesaid consolidated Ind AS 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 Ind AS and other accounting principles generally accepted in India, of the consolidated state of affairs of the Group as at March 31, 2018, and their consolidated profit, consolidated total comprehensive income, their consolidated cash flows and consolidated statement of changes in equity for the year ended on that date.
Other Matters
We did not audit the financial statements of three subsidiaries viz., VMT Spinning Company Limited, VTL Investments Limited and Vardhman Acrylics Limited, whose financial statements/ financial information reflect total assets of Rs. 645.69 crores as at March 31, 2018, total revenues of Rs.583.28 crores and net cash outflows amounting to Rs. 20.98 crores for the year ended on that date, as considered in the consolidated Ind AS financial statements. The consolidated Ind AS financial statements also include the Group's share of net profit of Rs. 17.51 crores for the year ended March 31, 2018, as considered in the consolidated Ind AS financial statements, in respect of three associates viz., Vardhman Yarns and Threads Limited, Vardhman Special Steels Limited and Vardhman Spinning and General Mills Limited and one joint venture viz., Vardhman Nisshinbo Garments Company Limited, whose financial statements have not been audited by us. These financial statements have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated Ind AS financial statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, joint venture and associates, and our report in terms of sub-section (3) of Section 143 of the Act, in so far as it relates to the aforesaid subsidiaries, joint ventures and associate is based solely on the reports of the other auditors.
Our opinion on the consolidated Ind AS financial statements above and our report on Other Legal and Regulatory Requirements below, is not modified in respect of the above matter with respect to our reliance on the work done and the reports of other auditors.
Deloitte Haskins & Sells LLP
Report on Other Legal and Regulatory Requirements
As required by Section 143(3) of the Act, based on our audit and on the consideration of the report of the other auditors on separate financial statements and the other financial information of subsidiaries, associates and joint venture companies incorporated in India, referred in the Other Matters paragraph above we report, to the extent applicable, that:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
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 of the aforesaid consolidated Ind AS financial statements.
In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated Ind AS financial statements have been kept so far as it appears from our examination of those books and the reports of the other auditors.
The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss (including Other Comprehensive Income), the Consolidated Cash Flow Statement and Consolidated Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated Ind AS financial statements.
In our opinion, the aforesaid consolidated Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act.
On the basis of the written representations received from the directors of the Parent as on March 31, 2018 taken on record by the Board of Directors of the Parent and the reports of the statutory auditors of its subsidiary Companies, associate Companies and joint venture Company incorporated in India, none of the directors of the Group, its associate Companies and joint venture Company incorporated in India is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.
With respect to the adequacy of the internal financial controls over financial reporting and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”, which is based on the auditors’ reports of the Parent,
subsidiary Companies, associate Companies and joint venture Company incorporated in India to whom internal financial control over financial reporting is applicable. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of internal financial controls over financial reporting of those Companies, for the reasons stated therein.
With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditor's) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
The consolidated Ind AS financial statements disclose the impact of pending litigations on the consolidated financial position of the Group, its associates and joint venture - Refer to Note 38(a) to the consolidated Ind AS financial statements.
Deloitte Haskins & Sells LLP
The Group, its associates and joint venture did not have any material foreseeable losses on long-term contracts including derivative contracts - Refer to Note 38(e) to the consolidated Ind AS financial statements.
There has been no delay in transferring amounts required to be transferred, to the Investor Education and Protection Fund by the Parent and its subsidiary Companies, associate Companies and joint venture Company incorporated in India.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No. 117366W / W-100018)
Vijay Agarwal
(Partner) (Membership No. 094468)
Place: Ludhiana
Date: May 12, 2018
oy
|
Deloitte Haskins & Sells LLP
ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT
(Referred to in paragraph (f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
In conjunction with our audit of the consolidated Ind AS financial statements of the Company as of and for the year ended March 31, 2018, we have audited the internal financial controls over financial reporting of Vardhman Textiles Limited (hereinafter referred to as “Parent”) and its subsidiary companies, its associates companies and joint venture company, which are companies incorporated in India, as of that date.
Management’s Responsibility for Internal Financial Controls
The respective Board of Directors of the Parent, its subsidiary companies, its associate companies and joint venture, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the respective companies considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Parent, its subsidiary companies, its associate companies and its joint venture, which are companies incorporated in India, based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing, prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
Ca
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Deloitte Haskins & Sells LLP
We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors of the subsidiary companies, associate companies and joint venture company, which are companies incorporated in India, in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting of the Parent, its subsidiary companies, its associate companies and its joint venture, which are
companies incorporated in India.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial contro! over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the 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 given to us and based on the consideration of the reports of the other auditors referred to in the Other Matters paragraph below, the Parent, its subsidiary companies, its associate companies and joint venture company, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the criteria for internal financial control over
financial reporting established by the respective companies considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
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Deloitte Haskins & Sells LLP
Other Matters
Our aforesaid report under Section 143(3) (i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting insofar as it relates to three subsidiary companies, three associate companies and one joint venture, which are companies incorporated in India, is based solely on the corresponding reports of the auditors of such companies incorporated in India.
Our opinion is not modified in respect of the above matter.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm's Registration No. 117366W / W-100018)
mee ma
Vijay Agarwal
(Partner) (Membership No. 094468)
Place: Ludhiana
Date: May 12, 2018
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VARDHMAN TEXTILES LIMITED
Consolidated Balance Sheet as at March 31, 2018
(All amounts in crores, unless otherwise stated)
Particulars
ASSETS
Non-current assets
{a) Property, plant and equipment
(b) Capital work-in-progress
{c) Other intangible assets
{d) Goodwill (e) Financial assets
(i) Investment in associates and joint ventures
{ii) Investments
(iif) Loans
{iv) Others financial assets
(gq) Other non-current-assets
Total Non-current assets
Current assets
(a) Inventories
{b) Financial assets
(i) Investments
(ii) Trade receivables
(i#)} Cash and cash equivalents
(iv) Bank balances other than
above
{v} Loans
(vi) Other financial assets
({c) Current tax assets(net)
{d) Other current assets
Total Current assets
TOTAL ASSETS
Equity and Liabilities
Equity
(a) Equity share capital
(b) Other equity
Note No.
3A 3A
3B
5A
58
6A
12 13
14
15
16 17
Equity attributabic to the owners of the Company
(c) Non-controtting interests
Total Equity
Liabilities
Non-current liabilities
(a) Financial liabilities
{i) Borrowings
(ii) Other financial liabilities (b) Provisions
(c) Deferred tax liabilities (Net)
(d) Other non-current liabilities
Total Non-current liabilities
Current liabilities
(a) Financial liabilities
(i) Borrowings
(li) Trade payables
(iif) Other financial liabilities {b} Provisions
(c) Current tax liabilities (net) (d) Other current frabilities
(All amounts in Rs. Crores, unless otherwise stated)
Particulars
Cc CASH FLOW FROM FINANCING ACTIVITIES
Proceeds/ (Repayment) from Equity Share capital
Proceeds from issue of treasury shares
Proceeds from borrowings (non-current)
Repayment from borrowings (non-current)
Repayment of borrowings (current)
Proceeds from borrowings (current) (net) Corporate dividend tax paid
Dividends on equity share capital paid
Capital Subsidy received
Finance costs paid
Net cash generated in financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
* There are no non cash changes arising from financing activities
Year ended March 31, 2018
Year ended
March 31, 2017
5.54 (688.39) 182.23 328.24 -
- (418.13)
(245.13) - - 38.85
(18.24) - (81.35) (0.93)
4.45 3-25 (83.67) (114.91) 92,07 (1.186 06
28.09 eeeeeenne th 7 307).
42.29 215.36
70.38 42.29
See accompanying notes to the consolidated financial statements 1-49
In terms of our report attached
For Deloitte Haskins & Sells LLP
Chartered Accountants
Place : Ludhiana
Date: May 12, 2018
eo
For and on behalf of the Board of Directors
£ ta Jain
Joint Managing Director
DIN: 00746471
Leprer Rajeev Thapar
Chief Financial Officer
Piace : Ludhiana
Date: May 12, 2018
Yeo S.P. Oswal
Chairman and
Managing Director
DIN: 00121737
wf eh
Company Secretary
Membership No:-
4935
VARDHMAN TEXTILES LIMITED
Consolidated Statement
of Changes
in Equity
for the
year ended March
31, 2018
(All amounts
in Rs,
crores, unless
otherwise stated)
a, Equity
share capital
Balance
as at
April 1,
2016
Buyback of
shares (including
of 1,36,539
nos. of
shares held
through trust.
Also refer
note 13a) Balance
as at
March
31, 2017
Sale of
awn shares
held through
trust (Refer
note 39)
Issue of
equity shares
under employee
stock option
plan (Refer
note 44)
Add:- Sale
of Holding
Company
shares by
subsidary
b. Other
equity
Amount
Item of
other Total
Reserves
and Surplus
comprehensive
income. Share
Statutory ‘
Share ley
i application
Capital Reserve
u/s Capital
Security Debenture
options General
Retained
Equity instrument
redemption .
redemption .
. through
other money
pending
reserve
45 IC
of premium
outstanding
reserve
earnings
aoe
reserve reserve
comprehensive income
allotment RBI
account
Balance at
April 1,
2016
- -
3.68 21.52
209.91 ”
~ 1,955.57
1,745.46 2.83
3,938.97
Profit for
the year
- -
- -
- -
- >
981.41 981.41
Other comprehensive
incorne for
the .
. .
. .
. .
year, net
of income
tax (0.38)
(0.04) (0.42)
Total comprehensive
income for
moe .
. -
. .
. .
981.03 (0.04)
980.99 the
year
Transfer to
Statutory Reserve
& Capital
redemption reserve
on -
- -
- -
- -
- (20.86)
- (20.86)
account of
buyback of
equity shares
Transfer from
Retained Earnings
1.95 -
: -
- -
- -
1.95 Transfer from
Retained
Earnings
on .
. account
of buyback
of equity
shares
18.91 18.91
Premium
on buy
back of
shares(Net
of premium
relating to
own shares
- -
- +
(209.91) -
+ (491.73)
- -
(701.64) held
by trust)
Balance as
at March
31, 2017
-~ -
5.63 40.43
- -
- 1,463.84
2,705.63 2.79
4,218.32
VARDHMAN TEXTILES LIMITED
Consolidated Statement
of Changes
in Equity
for the
year ended March
31, 2018
(All amounts
in Rs,
crores, unless
otherwise stated)
Profit for
the year
Other comprehensive
income for
the year,
net of
income tax
Total comprehensive income
for the
year Final
Equity Dividend
for the
financial year
2016-17 (Amount
Rs. 15
per share)
Tax on
Dividend
Dividend on
shares held
through trust
Profit on
sates of
shares held
through trust
(Refer note
39)
Employee stock
options accured
upto March
2018 (Refer
note 44)
Transfer
to equity
shares due
to
issue of
employee stock
options (Refer
note 44)
Securities premium
on shares
under Employee
stock options
Transfer to
debenture redemption
reserve on
account of
issue of
debentures
Transfer to
Statutory Reserve
under 45-1C
of RBI
Act
Transfer from
Retained Earnings
Share Application
Money received
pending allotment
under employee
stock options.
Item of
other Total
Reserves and
Surplus comprehensive
ee COME
Statutory .
Share
; application
Capital Reserve
u/s Capital
Security Debenture
options General
Equity instrument
redemption
, redemption
i" through
other money
pending reserve
4S IC
of premium
outstanding reserve
earnings nk
reserve reserve
comprehensive income
allotment RBI
account -
- -
- -
- -
$81.19 -
581.19
- -
- -
- -
- 1,57
- 1,57
- -
- .
- -
“ 582.76
- 582.76
- :
- :
- -
- (84.56)
: (84.56)
- :
- .
- -
- (18.24)
- (18.24)
- -
. -
- -
- 2.19
- 2.19
” -
- -
- -
- 180.77
- 180.77
. -
- -
. 12.07
- -
- 12.07
(1.50) (1.50)
- -
4.91 -
- -
- -
4.91
- -
- 17.81
- -
(17.81) -
-
(2.05) (2.05)
2.05 2.05
0,55 -
. -
: -
- -
. 0,55
0.55 :
7.68 40.43
4.91 17.81
10.57 1463.84
3,348.69 2.79
4,897.27
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VARDHMAN TEXTILES LIMITED
Notes to consolidated financial statement for the year ended March 31, 2018
(All amounts in crores, unless otherwise stated)
i
21
2.2
2.3
GENERAL INFORMATION |
Vardhman Textiles Limited (the Company) is a public Company, which was incorporated under the provisions of the Companies Act,
1956 on October 8, 1973 and has its registered office at Chandigarh Road, Ludhiana. The name of the Company at its incorporation was
Mahavir Spinning Mills Limited and subsequently changed to Vardhman Textiles Limited on September 5, 2006. The Company is engaged
in manufacturing of cotton yarn, synthetic yarn and woven fabric. The Company is listed on two stock exchanges i.e. at National Stock
Exchange and at Bombay Stpck Exchange.
The financial statements were approved for issue in accordance with a resolution of the directors on May 12, 2018
SIGNIFICANT ACCOUNTI
APPLICABLITY OF NEW A
Statement of compliance
These financial statements 2
Act ,2013 (‘the Act') (to the
(Indian Accounting Standard
Effective April 1, 2016, the
101 First time adoption of Ir
out from Indian Accounting
Companies (Accounts) Rules,
NG POLICIES, SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS AND
ND REVSIED IND AS
re prepared in accordance with Indian Accounting Standard (Ind AS), and the provisions of the Companies
extent notified) The Ind AS are prescribed under Section 133 of the Act read with Rule3 of the Companies 5) Rules, 2015 and relevant amendment rules issued thereafter.
company has adopted all the Ind AS standards and the adoption was carried out in accordance with Ind AS
dian Accounting Standards, with effect from April 1, 2015 as the transition date. The transition was carried
Principles generally accepted in India as prescribed under Section 133 of the Act, read with Rule 7 of the 2014 (IGAAP), which was the previous GAAP. Amounts for year ended March 31, 2017 and amounts as at March 31, 2017 were audited by previous auditors — S.C. Vasudeva & Co.
Basis of preparation and presentation
The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at
fair values at the end of eact reporting period, as explained in the accounting policies below.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date, regardless of whether that price is directly observabie or estimated using another valuation
technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or
liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.
Fair value for measurement?! jand/or disciosure purposes in these financial statements is determined on such a basis, except for share-
based payment transactions that are within the scope of Ind AS 102, leasing transactions that are within the scope of Ind AS 17, and
measurements that have so
Ind AS 36.
In addition, for financial rep¢
the inputs to the fair value n
me similarities to fair value but are not fair value, such as net realisable value in Ind AS 2 or value in use in
rting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which
neasurements are observable and the significance of the inputs to the fair value measurement in its entirety,
which are described as follows:
* Level 1 inputs are quoted
measurement date;
« Level 2 inputs are inputs,
or indirectly; and
prices (unadjusted) in active markets for identical assets or labillties that the entity can access at the
other than quoted prices included within Level 1, that are observable for the asset or liability, either directly
¢ Level 3 inputs are unobservabie inputs for the asset or liability.
Basis of consolidation
The consolidated financial s tatements incorporate the financial statements of the Company and entities controlled by the Company.
Control is achieved when the Company:
* has power over the investee;
«is exposed, or has rights, to variable returns from its involvement with the investee; and
* has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or
more of the three elements of control listed above.
When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights
are sufficient to give it the p
facts and circumstances in a
* the size of the Company's }
* potential voting rights held,
« rights arising from other co
* any additional facts and ci
[actica ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant
ssessing whether or not the Company's voting rights in an investee are sufficient to give it power, including:
holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
by the Company, other vote holders or other parties;
ntractual arrangements: and
‘ rcumstances that indicate that the Company has, or does not have, the current ability to direct the relevant
activities at the time that decisi
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INDEPENDENT AUDITOR’S REPORT
To The Members of Vardhman Textiles Limited Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of Vardhman Textiles Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2019, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
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 Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2019, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor’s Responsibility for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI’s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
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Deloitte Haskins & Sells LLP
Key Audit Matter Auditor’s Response
Uncertain income-tax positions ~ Refer to | Principal audit procedure: Notes 2.14, 2.17.1.4, 38 and 39 to the standalone financial statements Our audit approach was combination of test of
controls and substantive procedures which The Company has material uncertain income- | included the following: tax positions including matters under dispute which involves significant judgement toj|e Evaluated the Company’s processes and
determine the possible outcome of these controls over litigations operated by
disputes. For the current year ended March Management through regular meetings with 31, 2019, we believe there is a higher risk the Chief Financial Officer and Head - Direct relating to ongoing income-tax litigation Taxation and review of Board and audit matters amounting to Rs. 273.39 crores. The amounts involved are significant and the
application of accounting standard to . . wad . determine the amount, if any, to be provided | ° Performed testing of design and it’s operating
as a liability or disclosed as a contingent effectiveness of the control established by the
liability, is inherently subjective. This includes Management on the review of litigation and assumptions relating to the likelihood and/or contingent liabilities. timing of cash outflows from the business and the pending decision of Appropriate Authority. | e Involved our internal direct tax specialists to
challenge the management’s underlying
committee meeting minutes.
Due to the level of significant judgment assumptions in estimating the tax provision involved, the above matter has been identified and the possible outcome of the disputes. Our as a key audit matter. internal direct tax specialists also considered
the legal precedence and. other rulings in
evaluating management's position on these
uncertain income-tax positions.
Information Other than the Financial Statements and Auditor's Report Thereon
The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Business Responsibility Report, Director’s Report including annexures to the Director’s Report and Corporate Governance Report, but does not include the standalone financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Management's Responsibility for the Standalone Financial Statements
The Company’s Board of Directors is responsible for the matters stated in section 134(5) of 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 including other comprehensive income, cash
flows and changes in equity of the Company in accordance with the Ind AS and other accounting
principles generally accepted in India. This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act for safeguarding the assets of the
Company and for preventing and detecting 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 adequate internal financial
controls, that were operating effectively for ensuring the accuracy and completeness of the
accounting records, relevant to the preparation and presentation of the standalone financial
statement that give a true and fair view and are free from material misstatement, whether due to
ia neon or arror
Deloitte Haskins & Sells LLP
In preparing the standalone financial statements, management is responsible for assessing the
Company's ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Company’s financial reporting
process.
Auditor’s Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditor's report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these standalone financial
statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
« Identify and assess the risks of material misstatement of the standalone financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks,
and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
* Obtain an understanding of internal financial control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we
are also responsible for expressing our opinion on whether the Company has adequate internal
financial controls system in place and the operating effectiveness of such controls.
* Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the management.
* Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the standalone financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the Company to cease to continue as a going concern,
* Evaluate the overall presentation, structure and content of the standalone financial statements,
including the disclosures, and whether the standalone financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that,
individually or in aggregate, makes it probable that the economic decisions of a reasonably
knowledgeable user of the standalone financial statements may be influenced. We consider
quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in
evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in
the standalone financial statements.
Deloitte Haskins & Sells LLP
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and
where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit, we report to the extent applicable 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 it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive
Income, the Cash Flow Statement and Statement of Changes in Equity 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 Ind
AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors as on March 31,
2019 taken on record by the Board of Directors, none of the directors is disqualified as on
March 31, 2019 from being appointed as a director in terms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of
the Company and the operating effectiveness of such controls, refer to our separate
Report in “Annexure A”. Our report expresses an unmodified opinion on the adequacy and
operating effectiveness of the Company’s internal financial controls over financial reporting.
g) With respect to the other matters to be included in the Auditor’s Report in accordance with
the requirements of section 197(16) of the Act, as amended,
In our opinion and to the best of our information and according to the explanations given
to us, the remuneration paid by the Company to its directors during the year is in
accordance with the provisions of section 197 of the Act.
h) 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, as amended 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 — Refer to Note 38(a) to the standalone Ind AS
Gy) & financial statements;
OA NOt
i
Deloitte Haskins & Sells LLP
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses - Refer to Note 38 (f) to the
standalone Ind AS financial statements;
ili. There has been no delay in transferring amounts, required to be transferred, to the
Investor Education and Protection Fund by the Company
2. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act, we give in “Annexure B” a statement on the matters specified in paragraphs 3 and 4 of the Order.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm’s Registration No. 117366W/W-100018)
Rajesh Kumar Agarwal
Partner
(Membership No. 105546) GURUGRAM, MAY 9, 2019
——
Deloitte Haskins & Sells LLP
ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT OF VARDHMAN TEXTILES LIMITED (Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub- section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
We have audited the internal financial controls over financial reporting of Vardhman Textiles Limited (“the Company”) as of March 31, 2019 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting of the Company based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the 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 designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
ede
Deloitte Haskins & Sells LLP
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial contro! over financial reporting may become inadequate because of changes in conditions, or that the 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 given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2019, based on the criteria for internal financial control over financial reporting established by the Company considering the essential components of internal control! stated in the » Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute
of Chartered Accountants of India.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm’s Registration No. 117366W/W-100018)
Rajesh Kumar Agarwal
Partner
(Membership No. 105546)
GURUGRAM, MAY 9, 2019
a
Deloitte Haskins & Sells LLP
ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT OF VARDHMAN TEXTILES
LIMITED
(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ Section of
our report of even date)
(i)
(ii)
(iii)
(a)
(b)
(c)
The Company has maintained proper records showing full particulars, including
quantitative details and situation of fixed assets.
The Company has a program of verification to cover all the items of fixed assets in a
phased manner which, in our opinion, is reasonable having regard to the size of the
Company and the nature of its assets. Pursuant to the program, certain fixed assets
were physically verified by the management during the year. According to the
information and explanations given to us, no material discrepancies were noticed on
such verification.
According to the information and explanations given to us, the records examined by
us and based on the examination of the registered sale deeds and transfer deeds /
conveyance deeds and the confirmations received by us from “ICICI Bank Limited
and IDBI Bank Limited” (custodians) on behalf of term and consortium lenders for
the credit facility extended to the Company against immovable properties whose title
deeds have been pledged as security for obtaining credit facility and the same are
held in the name of Company.
We report that, the title deeds, comprising all the immovable properties of land and
buildings which are freehold, are held in the name of the Company as at the balance
sheet date, except the following:
Particulars of Land and | Carrying value as at Remarks
building March 31, 2019
(Rs. In Crore)
Freehold land located at 4.37 | Pending registration in
Chandigarh admeasuring the name of Company
1170.56 square meters.
As explained to us, the inventories were physically verified during the year by the
Management at reasonable intervals other than for stock lying with third parties and/or
goods in transit for which confirmation have been obtained/subsequent receipts have been
verified in most of the cases. The discrepancies noticed on physical verification of inventories
as compared to book records were not material and have been properly dealt with in the
books of account.
According to the information and explanations given to us, the Company has granted
unsecured loans to two bodies corporate, covered in the register maintained under Section
189 of the Companies Act, 2013, in respect of which:
b.
The terms and conditions of the grant of such loans are, in our opinion, prima facie, not
prejudicial to the Company’s interest.
The schedule of repayment of principal and payment of interest has been stipulated and
repayments or receipts of principal amounts and interest have been regular as per
stipulations.
oy:
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(iv)
(v)
(vi)
(vii)
c. There is no overdue amount remaining outstanding as at the year-end.
In our opinion and according to the information and explanations given to us, the Company
has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of
loans, making investments and providing guarantees and securities, as applicable.
The Company has not accepted deposits during the year and does not have any unclaimed
deposits as at March 31, 2019 and therefore, the provisions of the clause 3 (v) of the Order
are not applicable to the Company.
We have broadly reviewed the cost records maintained by the Company pursuant to the
Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central
Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of
the opinion that, prima facie, the prescribed cost records have been made and maintained.
We have, however, not made a detailed examination of the cost records with a view to
determine whether they are accurate or complete.
According to the information and explanations given to us, in respect of statutory dues:
(a) The Company has generally been regular in depositing undisputed statutory dues,
including provident fund, employees’ state insurance, income-tax, customs duty,
goods and services tax, cess and other material statutory dues applicable to it with
the appropriate authorities. According to the information and explanation given to us
and the records of the company examined by — us, in our opinion, the company is
regular in depositing the undisputed statutory dues including provident fund,
employee’s state insurance, income tax, goods and service tax and other material
statutory dues as applicable with the appropriate authorities. Also refer to the note
38 (e) in the financial statement regarding management assessment on certain
matters relating to the provident fund.
(b} There were no undisputed amounts payable in respect of provident fund, employees’
state insurance, income-tax, customs duty, goods and services tax, cess and other
material statutory dues applicable in arrears as at March 31, 2019 for a period of
more than six months from the date they became payable.
(c) Details of dues of excise duty, sales tax, value added tax, service tax and income-tax
which have not been deposited as on March 31, 2019 on account of disputes are given
below and there are no dues of customs duty as on March 31, 2019 on account of
disputes
Deloitte
Haskins & Sells LLP
Amount
i A Nature Forum where Amount* paid mount
Nature of . . . under unpaid of Dues dispute is Period protest
Statute pending
(Rs. In Crores)
Supreme Court 2005 0.04 - 0.04
Central | cise CESTAT 2009-2013 2.17 - 2.17 Excise Dut Laws y Upto
Company Secretary Chief Financial Membership No:-4935 Officer
Place : Ludhiana
Date: May 09,2019
For and on behalf of the Board of Directors
S.P. Oswalt
Chairman and
Managing Director
DIN: 00121737
VARDHMAN TEXTILES LIMITED
Statement of profit and loss for year ended March 31, 2019
(All amounts in crores, unless otherwise stated)
Particulars Note For the year ended = For the year ended
No. March 31, 2019 March 31, 2018
I Revenue from operations 28 6,414.58 5,851.37
It Other income 29 218.20 185.06
mt Total Income (1+IT) 6,632.78 6,036.43
Iv Expenses :
Cost of materials consumed 30 3,264.50 3,180.52
Purchases of stock-in-trade 31 50.08 33.63 Changes in inventories of finished 32
goods,work-in-progress and 1.73 (48.01)
stock-in-trade
Employee benefits expense 33 519.86 479.63
Finance costs 34 117.84 114.32
Depreciation and amortization 3A & 3B 241.48 228.55
Other expenses 35 1,446.89 1,347.04
Total Expenses 5,642.38 5,335.68
Vv Profit before tax (III-IV) 990.40 700.75
VI Tax expense: 36
Current tax 242.91 147.58
Deferred tax 51.61 7.41
VII Profit for the year (V-VI) 695.88 545.76
VIIZ Other Comprehensive Income 17
A Items that will not be reclassified to profit or loss
(a) (i) Remeasurements of the defined benefits plans 0.17 2.51
(ii) Income tax relating to items that will not be reclassified (0.06) (0.87) to profit or loss
(b) (i) Equity instruments through other comprehensive income 0.13 0.09
(ii) Income tax relating to items that will not be reclassified (0.05) (0.03) to profit or loss
IX Total other comprehensive 0.19 1.70 income
x Total comprehensive income for the year (VII+IX) 696.07 547.46
Earnings per equity share (amount in Rs.) 42
(1) Basic 121.13 96.41
(2) Diluted 119.97 95.45
See accompanying notes to the standalone financial statements
In terms of our report attached For and on behalf of the Board of Directors
For Deloitte Haskins & Sells LLP
Chartered Accountants ee
S.P. Oswal Ney ty Rajeev Thapar
uchita” ain CSL Partner Company Secretary Chief Financial
Membership No:-4935 = Officer
Rajesh*Kumar Agarwal
Chairman and Managing Director
Vice Chairman and
Joint Managing
Director
DIN:00746471 DIN: 00121737
Place : Ludhiana
Date: May 09,2019
Place : Gurugram
Date: May 09,2019
7) We
VARDHMAN TEXTILES LIMITED
CASH FLOW STATEMENT
for the year ended March 31, 2019
(All amounts in Rs. Crores, unless otherwise stated)
Year ended Year ended Particulars March 31, 2019
CASH FLOW FROM OPERATING ACTIVITIES
March 31, 2018
Profit before tax 990.40 700.75 Adjustments for:
Finance costs 107.81 103.81 Fair valuation gain on investment (46.56) (78.08)
Capital Subsidy (2.36) (1.79)
Amortisation of Prepaid Leases 0.08 0.08
Interest income (11.66) (17.76) Dividend on investments (40.91) (19.98)
Net gain on sale / discarding of property, plant and equipment (17.42) (4.69) (Profit)/Loss on sale of Investments (Net) (23,23) (20.26) Provision no longer required written back (net) (19.31) (8.02) Amortisation of processing charges 0.38 0.64 Assets written off 0.49 3.32 Bad debt written off 0.73 0.45 Depreciation and amortisation 241.48 228.55
Share options outstanding account 6.32 10.57
Changes in working capital:
Adjustments for (increase) / decrease in operating assets _:-
Key Audit Matter Auditor's Response Uncertain income-tax positions ~ Refer to Principal audit procedure: Notes 2.18, 2.22.7 and 38 to the consolidated financial statements Our audit approach was combination of test of
controls and substantive procedures which The Parent has material uncertain income-tax included the following: positions including matters under dispute which involves — significant judgement toje Evaluated the Parent's processes and controls determine the possible outcome of these over litigations operated by Management disputes. For the current year ended March through regular meetings with the Chief 31, 2019, we believe there is a higher risk Financial Officer and Head - Direct Taxation relating to ongoing income-tax litigation and review of Board and audit committee matters amounting to Rs. 274.43 crores. The amounts involved are significant and the application of accounting standard to . . ips . determine the amount, if any, to be provided | ° Performed testing of design and it’s operating as a liability or disclosed as a contingent effectiveness of the control established by the liability, is inherently subjective. This includes Management on the review of litigation and assumptions relating to the likelihood and/or contingent liabilities. timing of cash outflows from the business and the pending decision of Appropriate Authority. | « Involved our internal direct tax specialists to
challenge the management's underlying
meeting minutes.
Due to the level of significant judgment assumptions in estimating the tax provision involved, the above matter has been identified and the possible outcome of the disputes. Our as a key audit matter. internal direct tax specialists also considered the legal precedence and other rulings in evaluating management’s position on these uncertain income-tax positions.
Information Other than the Financial Statements and Auditor’s Report Thereon
The Parent’s Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Business Responsibility Report, Director’s Report including annexures to the Director's Report and Corporate Governance Report, but does not include the consolidated financial statements, standalone financial statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit: of the consolidated financial statements, our responsibility is to read the other information, compare with the financial statements of the subsidiaries, associates and joint venture audited by the other auditors, to the extent it relates to these entities and, in doing so, place reliance on the work of the other auditors and consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated. Other information so far as it relates to the subsidiaries, associates and joint venture, is traced from their financial statements audited by the other auditors.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Deloitte Haskins & Sells LLP
Management's Responsibility for the Consolidated Financial Statements
The Parent’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these consolidated financial statements that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive income, consolidated cash flows and consolidated changes in equity of the Group including its associates and joint venture in accordance with the Ind AS and other accounting principles generally accepted in India. The respective Board of Directors of the companies included
_ in the Group and of its associates and joint venture are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group, its associates and its joint venture and for preventing and detecting 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 adequate internal financial controls, 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, which have been used for the purpose of preparation of the consolidated financial statements by the Directors of the Parent, as aforesaid.
In preparing the consolidated financial statements, the respective Board of Directors of the companies included in the Group and of its associates and joint venture are responsible for assessing the ability of the Group and of its associates and joint venture to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management either intends to liquidate or cease operations, or has no realistic alternative but to do so.
The respective Board of Directors of the companies included in the Group and of its associates and joint venture are also responsible for overseeing the financial reporting process of the Group and of its associates and joint venture.
Auditor’s Responsibility for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
* Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
foe misrepresentations, or the override of internal control.
Deloitte Haskins & Sells LLP
S « Obtain an understanding of internal financial control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are
also responsible for expressing our opinion on whether the Parent has adequate internal financial
controls system in place and the operating effectiveness of such controls.
+ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the management.
« Conclude on the appropriateness of management's use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the ability of the Group and its associates
and joint venture to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group and its associates and joint venture
to cease to continue as a going concern.
« Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
¢« Obtain sufficient appropriate audit evidence regarding the financial information or business
activities within the Group and its associates and joint venture to express an opinion on the
consolidated financial statements. We are responsible for the direction, supervision and
performance of the audit of the financial statements of such entities or business activities
included in the consolidated financial statements of which we are the independent auditors. For
the other entities or business activities included in the consolidated financial statements, which
have been audited by the other auditors, such other auditors remain responsible for the
direction, supervision and performance of the audits carried out by them. We remain solely
responsible for our audit opinion.
Materiality is the magnitude of misstatements in the consolidated financial statements that,
individually or in aggregate, makes it probable that the economic decisions of a reasonably
knowledgeable user of the consolidated financial statements may be influenced. We consider
quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in
evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in
the consolidated financial statements.
We communicate with those charged with governance of the Parent, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, and
where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the consolidated financial statements of the current
period and are therefore the key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
|
Deloitte Haskins & Sells LLP
Other Matters
We did not audit the financial statements of four subsidiaries, whose financial statements reflect total
assets of Rs. 724.95 crores as at March 31, 2019, total revenues of Rs. 671.37 crores and net cash
outflows amounting to Rs. 2.76 crores for the year ended on that date, as considered in the
consolidated financial statements. The consolidated financial statements also include the Group’s
share of net profit of Rs. 15.96 crores for the year ended March 31, 2019, as considered in the
consolidated financial statements, in respect of three associates and joint venture, whose financial
statements/information have not been audited by us. These financial statements/information have
been audited by other auditors whose reports have been furnished to us by the Management and our
opinion on the consolidated financial statements, in so far as it relates to the amounts and
disclosures included in respect of these subsidiaries, associates and joint venture, and our
report in terms of subsection (3) of Section 143 of the Act, in so far as it relates to the aforesaid
subsidiaries, associates and joint venture is based solely on the reports of the other auditors.
Our opinion on the consolidated financial statements above and our report on Other Legal and
Regulatory Requirements below, is not modified in respect of the above matter with respect to
our reliance on the work done and the reports of the other auditors.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on our audit and on the consideration of the
reports of the other auditors on the separate financial statements of the subsidiaries, associates
and joint venture referred to in the Other Matters section above we report, to the extent
applicable 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 of the aforesaid
consolidated financial statements.
b) In our opinion, proper books of account as required by law relating to preparation of the
aforesaid consolidated financial statements have been kept so far as it appears from our
examination of those books and the reports of the other auditors.
c) The Consolidated Balance Sheet, the Consolidated Statement of Profit and Loss including
Other Comprehensive Income, the Consolidated Cash Flow Statement and the Consolidated
Statement of Changes in Equity dealt with by this Report are in agreement with the relevant
books of account maintained for the purpose of preparation of the consolidated financial
statements.
d) In our opinion, the aforesaid consolidated financial statements comply with the Ind
AS specified under Section 133 of the Act.
e) On the basis of the written representations received from the directors of the Parent as on
March 31, 2019 taken on record by the Board of Directors of the Company and the reports
of the statutory auditors of its subsidiary companies, associate companies and joint venture
company incorporated in India, none of the directors of the Group companies, its associate
companies and joint venture company incorporated in India is disqualified as on March 31,
2019 from being appointed as a director in terms of Section 164(2) of the Act.
Deloitte Haskins & Sells LLP
f)
9)
h)
GURUGRAM, MAY 9, 2019
With respect to the adequacy of the internal financial controls over financial reporting and
the operating effectiveness of such controls, refer to our separate Report in “Annexure
A” which is based on the auditors’ reports of the Parent, subsidiary companies, associate
companies and joint venture company incorporated in India. Our report expresses an
unmodified opinion on the adequacy and operating effectiveness of internal financial
controls over financial reporting of those companies.
With respect to the other matters to be included in the Auditor’s Report in accordance with
the requirements of section 197(16) of the Act, as amended,
In our opinion and to the best of our information and according to the explanations given
to us, the remuneration paid by the Parent to its directors during the year is in accordance
with the provisions of section 197 of the Act.
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, as amended in our opinion and
to the best of our information and according to the explanations given to us:
i) The consolidated financial statements disclose the impact of pending litigations on the consolidated financial position of the Group, its associates and joint venture ~ Refer to Note 38(a) to the consolidated Ind AS financial statements;
ii) The Group, its associates and joint venture did not have any material foreseeable losses on long-term contracts including derivative contracts - Refer to Note 38(f) to the consolidated Ind AS financial statements;
iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Parent and its subsidiary companies, associate companies and joint venture company incorporated in India.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm’s Registration No. 11736 W-100018)
Rajesh Kumar Agarwal
Partner
(Membership No. 105546)
Deloitte Haskins & Sells LLP
ANNEXURE “A” TO THE INDEPENDENT AUDITOR’S REPORT OF VARDHMAN TEXTILES
LIMITED (Referred to in paragraph (f) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub- section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
In conjunction with our audit of the consolidated Ind AS financial statements of the Company as of and for the year ended March 31, 2019, we have audited the internal financial controls over financial reporting of Vardhman Textiles Limited (hereinafter referred to as “Parent”) and its subsidiary companies, its associate companies and joint venture company, which are companies incorporated in India, as of that date.
Management’s Responsibility for Internal Financial Controls
The respective Board of Directors of the Parent, its subsidiary companies and its associate companies and joint venture, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the respective Companies considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued
- by the Institute of Chartered Accountants of India (ICAI)”. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the respective company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the internal financial controls over financial reporting of the Parent, its subsidiary companies, its associate companies and joint venture company, which are companies incorporated in India, based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India and the Standards on Auditing, prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if
such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained and other auditors of the subsidiary companies, associate companies and joint venture company, which are companies incorporated in India, in terms of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting of the Parent, its subsidiary companies, its associate companies and joint venture company, which are companies incorporated in India.
Deloitte Haskins & Sells LLP
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material
effect on the financial statements. ,
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the 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 given to us and based on the consideration of the other auditors referred to in the Other Matters paragraph below, the Parent, its subsidiary companies, its associate companies and joint venture company, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2019, based on the criteria for internal financial control over financial reporting established by the respective companies considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Other Matters
Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness . of the internal financial controls over financial reporting insofar as it relates to four subsidiary companies, three associate companies and joint venture company, which are companies incorporated in India, is based solely on the corresponding reports of the auditors of such companies
incorporated in India.
Our opinion is not modified in respect of the above matter.
For DELOITTE HASKINS & SELLS LLP
Chartered Accountants
(Firm’s Registration No. 117366W/W-100018)
Rajesh Kiimah Agarwal
Partner
(Membership No. 105546)
GURUGRAM, MAY 9, 2019
\-
VARDHMAN TEXTILES LIMITED
Consolidated Balance Sheet as at March 31, 2019 (All amounts in Rs. crores, unless otherwise stated)
Particulars
ASSETS
Non-current assets
{a) Property, plant and equipment
(b) Capital work-in-progress
(c) Other intangible assets
(d) Goodwill (e) Financial assets
{i) Investment in associates and joint venture
(ii) Investments (iii) Loans
{iv} Others financial assets
(f} Other non-current assets
Total Non-current assets
Current assets
(a) Inventories
(b) Financial assets
(i) Investments
(i)Trade receivables
(iit) Cash and cash equivalents
{iv) Bank balances other than above
(v) Loans
(vi) Other financial assets
(c) Current tax assets(net)
(d) Other current assets
Total Current assets
TOTAL ASSETS
Equity and Liabilities
Equity
(a) Equity share capitai
(b) Other equity
Equity attributable to the owners of the Company
(c) Non-controlling interests
Total Equity
Liabilities
Non-current liabilities
(a) Financial liabilities
(i) Borrowings
(ii) Other financial liabilities
(b) Provisions (c) Deferred tax liabilities (Net)
(d) Other non-current liabilities
Total Non-current liabilities
Current liabilities
(a) Financial liabilities
(i) Borrowings
Gi) Trade payables
{a} total outstanding dues of micro
anterprises and small enterprise
(b) total outstanding dues of creditors other than micro enterprises and small
enterprises
(iii) Other financial liabilities
(b) Provisions
(c) Current tax liabilities (net)
(d) Other current liabilities
Total Current liabilities
TOTAL EQUITY AND LIABILITIES
See accompanying notes to the consolidated financial statements
In terms of our report attached
For Deloitte Haskins & Selis LLP
Charte; Accountants
Rajesh Kuma? Agarwal
Partner
Place : Gurugram
Date: May 2019
Note No.
3A
3A
3B
16
17
18
19
20
22
23 24
25
26 14
27
1-49
\ Sanjay Gupta
Company Secretary Membership No:-4935
Place ; Ludhiana
Date:May 09, 2019
As at March 31, 2019 As at March 31, 2018
3,186.24 2,614.59
273.68 105.71
2.35 3.81
12,50 12,50
107.84 106,00
645.52 748,58
0.73 0.59
9.39 9.40
96.98 97.31 4,335.23 3,698.49
2,610.25 2,256.64
592.37 979.09
803.08 757.53
40.05 70.38
3.80 3.38
17.69 29,80
68.90 18.35
102.25 78.41
442.60 352.02
4,680.99 4,545.60
9,016.22 8,244.09
56,48 56.43
5,535.00 4,897.27
5,591.48 4,953.70
113.07 108.78 5,704.55 5,062.48
1,088.79 1,209.77
4.48 0.65
12.36 7.69
323.31 255.62
20.67 22.18 1,449.61 1,495.91
886.42 821,19
4.38 -
311,19 290.60
550.15 438.52
2.95 8.47
30.66 10.93
76,31 118.99 1,862.06 1,685.70
9,016.22 8,244.09
For and on behalf of the Board of Directors
ly rb Rajeev Thapar
Vice Chairman and Joint Managing Director
DIN:00746471
Chief Financial
Officer
*
ir bf S.P, Oswal
Chairman and Managing
Director
DIN: 00121737
VARDHMAN TEXTILES LIMITED
Consolidated Statement of profit and loss for the year ended March 31, 2019
(All amounts in Rs. crores, unless otherwise stated)
. Note For the year ended For the year ended
Particulars No. March 31, 2019 March 31, 2018
I Revenue from operations 28 6,877.92 6,248.27
II Other income 29 222.72 197.35 III Total Income (1+11) 7,100.64 6,445.62
IV Expenses:
Cost of materials consumed 30 3,573.75 3,438.28 Purchases of stock-in-trade 31 12.92 4.15 Changes in inventories of finished 32 9.06 (37.87)
goods, work-in-progress and stock-in
-trade
Employee benefits expense 33 550.23 506.26
Finance costs 34 119.65 118.19
Depreciation and amortization 3A & 3B 254.02 240.00
Other expenses 35 1,538.20 1,434.49
Total Expenses 6,057.83 5,703.50
V Profit before tax (III-IV) 1,042.81 742.12
VI Share of profit of associates/ joint ventures 15.93 17.51
VII Profit before tax (V+VI) 1,058.74 759.63
VIII Tax expense: 36
Current tax 264.01 165.01
Deferred tax 54.18 2.18
IX Profit for the year (VII-VIII) 740.55 592.44
X Other Comprehensive Income 17
Items that will not be reclassified to profit or loss
(i) Remeasurements of the defined benefits plans 0.31 2.47
(ii) Incorne tax relating to items that will not be reclassified to profit or loss (0.09) (0.86)
(i) Equity instruments through other comprehensive income (1.17) (0.01)
(ii) Income tax relating to items that will not be reclassified to 0.39 -
profit or loss
Share of other comprehensive income from associates/joint ~ -
venture
XI Total other comprehensive income (0.56) 1.60
XII Total comprehensive income for the year (IX+XI) 739.99 594.04
Profit attributable to:
- Owners of the Company 730.72 581.19
~ Non-controlling interests 9.84 11.25
740.55 592.44 Other Comprehensive Income attributable to:
- Owners of the Company (0.56) 1.57
~ Non-controlling interests 0.00 0.03
(0.56) 1.60 Total Comprehensive Income attributable to:
- Owners of the Company 730.15 582.76
- Non-controlling interests 9.84 11.28
740.00 594.04
Earnings per equity share (amount in Rs.) 41
(1) Basic 129.45 106.56 (2) Diluted 128.19 105.48
See accompanying notes to the consolidated financial
statements 1-49
In terms of our report attached For and on behalf of the Board of Directors
For Deloitte Haskins & Sells LLP
uchita Jain S.P. Oswal
Vice Chairman and Joint Chairman and Managing
Managing Director Director
DIN:00746471 DIN: 00121737
\ L (pur Sanjay Gupta Rajeev Thapar
Company Secretary Chief Financial
Membership No:-4935 = Officer
Place : Ludhiana .
Date:May 09, 2019 *
Place : Gurugram
oF
VARDHMAN TEXTILES LIMITED
Consolidated Cash Flow Statement for the year ended March 31, 2019
(All amounts in Rs. Crores, unless otherwise stated)
Particulars
A CASH FLOW FROM OPERATING ACTIVITIES
Profit before tax
Adjustments for:
Share of profit of associates
Finance costs
Fair valuation gain on investment
Subsidy income
Prepayments of Leasehold land
Interest income
Dividend on current investments
Net gain on sale / discarding of property, plant and equipment
(Profit)/Loss on sale of Investments (Net)
Provision no longer required written back(Net)
Amortisation of processing charges
Asset written off
Bad debt written off
Allowances for doubtful trade receivables and advances
Depreciation and amortisation expense
Share options outstanding account
Changes in working capital:
Adjustments for (increase) / decrease in operating assets :-
Trade receivables
Inventories
Loans (Current)
Loans (Non-current)
Other assets (Current)
Other assets (Non-current)
Others financial assets (Current)
Others financial assets (Non Current)
Adjustments for increase / (decrease) in operating liabilities :-
Trade payables and other liabilities
Provisions (Non Current)
Provisions (Current)
Others financial liabilities (Current)
Others financial liabilities (Non-Current)
Other liabilities (Non-current)
Other liabilities (Current)
Cash generated from operations
Income taxes paid
Net cash generated by operating activities
B CASH FLOW FROM INVESTING ACTIVITIES
Purchase of investments
Proceeds from sale of investments
Interest received
Payment for purchase of property, plant and
equipment, capital work in progress and other
intangible assets
Bank balances not considered as cash and cash equivalents
Proceeds from disposal of property, plant and equipment
Dividend on associates, other investments
Net cash used in investing activities
Year ended March 31, 2019
1,058.74
(15.93) 108.77 (60.75) (2.43)
0.24 (11.18) (16.47) (17.49) (29.32) (20.90)
0.38 0.52
1.14
(0.29)
254.02
6.32
(46.40) (353.61)
12.11 (0.14)
(90.59) (2.21)
(51.22) 0.13
45.87 4.67
5.47
19.08
3.83 0.10
(46.20)
756.26
(257.28)
498.98
(334.55) 911.77 12.66
(908.18)
(0.42)
24.74 16.47
(277.51)
Year ended March 31, 2018
759.63
(17.51) 106.86 (86.84) (1.83)
0.24 (19.01) (7.29) (4.81)
(34.96) (8.38)
0.64 3.39
0.46
240.00 10.57
(24.49) (503.84)
(0.09) 0.02
(56.37) (5.38)
0.57 0.81
3.09 (2.00)
0.82 (5.74)
0.16 (1.13)
(32.18)
315.41
(212.09) 103.32
(1,068.02) 1,224.47
26.39
(366.73)
(1.02)
10.31
7.29
(167.31)
VARDHMAN TEXTILES LIMITED
Consolidated Cash Flow Statement for the year ended March 31, 2019
(All amounts in Rs. Crores, unless otherwise stated)
Particulars
C CASH FLOW FROM FINANCING ACTIVITIES
Proceeds/ (Repayment) from Equity Share capital
Proceeds from issue of treasury shares
Proceeds from borrowings (non-current)
Repayment from borrowings (non-current)
Repayment of borrowings (current)
Proceeds from borrowings (current) (net)
Corporate dividend tax paid
Dividends on equity share capital paid
Capital Subsidy received
Finance costs paid
Net cash generated / (used) in financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
* There are no non cash changes arising from financing activities
See accompanying notes to the consolidated financial statements
XVIIL|Debt Service Coverage Ratio**** 2.00 3,28 2,66
XIX, | Interest Service Coverage Ratio* **** 6,95 9.05 9,39
* Paid up Debt Capital comprises of listed debentures only,
** Net Worth = Equity share capital + other equity
*** Debt equity ratio = Total Debt/Net Worth **4* Debt service coverage ratio (DSCR) = (EBDIT-Current Tax)/(Gross Interest+Scheduled principal repayment of Long term Debts) +*4** Interest service coverage ratio (ISCR) = (EBDIT-Current Tax)/Gross Interest
(
VARDHMAN TEXTILES LIMITED
Regd. Office : Chandigarh Road, Ludhiana-141010
Unaudited Balance Sheet as at September 30, 2019
(Rs. In Crores)
Unaudited Audited
at Os Rarensers September 30 ,2019 March 31 ,2019
ASSETS
1 Non-current assets
(a) Property, plant and equipment 3,324.53 3,057.24
The Company is primarily in the business of manufacturing and sales of textile products (i.e,, Yarns and Fabrics). The Chief Operating Decision Maker (CODM), The
Chairman & Managing Director, performs a detailed review of the operating results, makes decisions about the allocation of resources based on the analysis of the
various performance indicators of the Company as a whole. Therefore, there is only one operating segment namely, “Textiles”,
Effective April 1, 2019, the Company has adopted Ind AS 116 "Leases", applied to all lease contracts existing on April 1, 2019 using the modified retrospective
method along with the transition option to recognise Right-of-Use asset (ROU) at an amount equal to the lease liability, Accordingly, comparatives for the quarters
ended June 30, 2018 and March 31, 2019 and year ended March 31, 2019 have not been retrospectively adjusted. On transition, "Right of use asset" of Rs, 0.15
crore and a corresponding "Lease Liabilities" of Rs. 0.15 crore has been recognised as at April 1, 2019. Further, in respect of leases which were classified as
operating leases, applying Ind AS 17, Rs. 8.45 crores has been reclassifed from "Other Assets" to "Right of Use Asset’. The effect of this adoption is not material on
the profit for the period and earnings per share,
The Board of Directors, in its meeting held on August 13, 2019 has approved a Scheme of Amalgamation (the “Scheme”) under Sections 230 to 232 of the
Companies Act, 2013 (‘the 2013 Act’) and other applicable provisions of the 2013 Act, as per pooling of interest method, between the Company and its subsidiaries,
by the name of Vardhman Acrylics Limited, VMT Spinning Company Limited, VTL Investments Limited, and Vardhman Nisshinbo Garments Company Limited. The
amalgamation will be from April 1, 2020 being the appointed date and is subject to shareholders’ and other statutory approvals,
These results have been prepared in accordance with the Indian Accounting Standards (referred to as "Ind AS") 34 Interim Financial Reporting prescribed under
Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules as amended from time to time,
The Company has issued secured, rated listed Redeemable Non-convertible Debentures (NCDs) aggregating to Rs, 499,80 crores for cash at par on private
placement basis on September 8, 2017, The NCDs are listed at the Bombay Stock Exchange of India (BSE) and comprise of three series repayable in third, fourth
and fifth years and have an overall yield of 7.69% per annum,
CRISIL has assigned a rating of AA+ with Stable outlook to the said NCDs of the Company on December 28,2018, These NCDs are secured by way of a first pari
passu charge over the immovable and movable fixed assets of the Company and it should have fixed asset cover of more than 1.05 times of outstanding amount of
NCDs, The Fixed Asset coverage ratio as on September 30, 2019 is 2.26 times
During the Half year ended September 30, 2019, the Company has issued 20,000 equity shares under Employee Stock Options Scheme at Rs. 815 per share. As a
result of above, the paid up equity share capital of the Company has increased from Rs, 57.48 crores to Rs, 57.50 crores,
Financial Results has been reviewed by the Audit Committee at its meeting held on November 07, 2019 and approved by the Board of Directors at its meeting held
on November 08, 2019, The limited review as required under Regulation 33 of SEBI ( Listing Obligation and Disclosure Requirements) Regulations, 2015, has been
completed by the Statutory Auditors,
On September 20, 2019, the Government of India, vide the Taxation Laws (Amendment) Ordinance 2019, inserted Section 115BAA in the Income Tax Act, 1961,
which provides domestic companies an option to pay corporate tax at reduced rate effective April 01, 2019, subject to certain conditions, The Company is currently
in the process of evaluating this option,
For Vardhman Textiles Limited
Place : Ludhiana \ (\t NA} WA, Date : November 08, 2019 Chairman & Managing Director
Consolidated Unaudited Financial Results for the quarter and half year ended September 30, 2019 Corporate Identity Number (CIN); L17111PB1973PLC003345, PAN; AABCM4692E
XV, |Paid up equity share capital (face value per share Rs, 10) 56.50 56.49 36.44 56,50 56,44 56,48
XVI, }Paid up Debt Capital* 499.80 499.80 499,80
XVII, |Other equity 5,535.00
XVIII. |Capital Redemption Reserve 40,43 40,43 40,43
XIX. |Debenture Redemption Reserve 57,62 33,79 49,67
XX, |Net Worth** 5,706.29 5,205.07 5,591.48
XXI, |Debt Equity Ratio*** 0,32 0,31 0.41
XXII, |Debt Service Coverage Ratio**** 2,05 4,03 2.77
XXIII, | Interest Service Coverage Ratio***** 7,17 9,36 9,77
* Paid up Debt Capital comprises of listed debentures only/-
** Net Worth = Equity share capital + Reserves attributable to owners of equity *** Debt equity ratio = Total Debt/Equity **#* Debt service coverage ratio (DSCR) = (EBDIT-Current Tax)/(Gross Interest + Scheduled principal repayment of Long term Debts) x Interest service coverage ratio (ISCR) = (EBDIT-Current Tax)/Gross Interest L/
ENN
VARDHMAN TEXTILES LIMITED
Unaudited Consolidated Balance Sheet as at September 30, 2019 (Rs. In Crores)
Unaudited Audited
ae ere September 30 ,2019 March 31 ,2019
ASSETS
1]Non-current assets
(a) Property, Plant and Equipment 3,446.51 3,186.24 (b) Capital work-in-progress 245.57 273.68 (c) Right to Use Asset (Refer Note no.2) 19.94 -
1, The consolidated financial results includes result of all its - (i) Subsidiaries - viz Vardhman Acrylics Limited, VMT Spinning Company Limited, VTL Investments Limited, and Vardhman Nisshinbo Garments Company Limited (Joint Venture upto January 22, 2019) and (ii) Associates - viz Vardhman Yarns and Threads Limited, Vardhman Special Steels Limited and Vardhman Spinning and General Mills Limited,
2 Effective April 1, 2019, the Group has adopted Ind AS 116 "Leases", applied to all lease contracts existing on April 1, 2019 using the modified retrospective method along with the transition option to
recognise Right of Use asset (ROU) at an amount equal to the lease liability, Accordingly, comparatives for the quarters and half year ended September 30, 2018 and year ended March 31, 2019 have not been
retrospectively adjusted, On transition, "Right of use asset" of Rs, 0.15 crore and a corresponding "Lease Liabilities" of Rs. 0.15 crore has been recognised as at April 1, 2019, Further, in respect of leases which
were classified as operating leases, applying Ind AS 17, Rs. 20.23 crores has been reclassifed from "Other Assets" to "Right of Use Asset", The effect of this adoption is not material on the profit for the period
and earnings per share.
3 The Board of Directors, in its meeting held on August 13, 2019 has approved a Scheme of Amalgamation (the "Scheme") under Sections 230 to 232 of the Companies Act, 2013 (‘the 2013 Act’) and other
applicable provisions of the 2013 Act, as per pooling of interest method, between the Company and its subsidiaries, by the name of Vardhman Acrylics Limited, VMT Spinning Company Limited, VTL
Investments Limited, and Vardhman Nisshinbo Garments Company Limited, The amalgamation will be from April 1, 2020 being the appointed date and is subject to shareholders’ and other statutory approvals,
4, These results have been prepared in accordance with the Indian Accounting Standards (referred to as "Ind AS') 34 Interim Financial Reporting prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules as amended from time to time,
5.The Company has issued secured, rated listed Redeemable Non-convertible Debentures (NCDs) aggregating to Rs. 499,80 crores for cash at par on private placement basis on September 8 2017, The NCDs are listed at the Bombay Stock Exchange of India (BSE) and comprise of three series repayable in third, fourth and fifth years and have an overall yield of 7.69% per annum,
CRISIL has assigned a rating of AA+ with Stable outlook to the said NCDs of the Company on December 28,2018, These NCDs are secured by way of a first pari passu charge over the immovable and movable fixed assets of the Company and it should have fixed asset cover of more than 1.05 times of outstanding amount of NCDs.The Fixed Asset coverage ratio as on September 30, 2019 is 2.26 times,
6.During the half year ended September 30, 2019, the Company has issued 20,000 equity shares under Employee Stock Options Scheme at Rs. 815 per share, As a result of above, the paid up equity share capital of the Company has increased from Rs, 57,48 crores to Rs, 57.50 crores,
7 Financial Results has been reviewed by the Audit Committee at its meeting held on November 07, 2019 and approved by the Board of Directors at its meeting held on November 08, 2019. The limited review as required under Regulation 33 of SEBI ( Listing Obligation and Disclosure Requirements) Regulations, 2015, has been completed by the Statutory Auditors,
8,0n September 20, 2019, the Government of India, vide the Taxation Laws (Amendment) Ordinance 2019, inserted Section L15BAA in the Income Tax Act, 1961, which provides domestic companies an option
to pay corporate tax at reduced rate effective April 01, 2019, subject to certain conditions. The Group is currently in the process of evaluating this option,
For Vardhman Textiles Limited
§.P Oswal
Chairman and Managaing Director Place : Ludhiana
Date : November 08, 2019
Chartered A tant: Deloitte 7" Floor, Building 10, Tower B - DLF Cyber City Complex
DLF City Ph -H Haskins & Sells LLP DLE City Phase tt : Haryana, India
Tel: +91 124 679 2000 Fax: +91 124 679 2012
INDEPENDENT AUDITOR’S REVIEW REPORT ON REVIEW OF INTERIM CONSOLIDATED FINANCIAL RESULTS |
TO THE BOARD OF DIRECTORS OF VARDHMAN TEXTILES LIMITED
1. We have reviewed the accompanying Statement of Consolidated Unaudited Financial Results of VARDHMAN TEXTILES LIMITED (“the Parent”) and its subsidiaries (the Parent and its subsidiaries together referred to as “the Group”), and its share of the net profit after tax and total comprehensive income of its associates for the quarter and half year ended September 30, 2019 (“the Statement”) being submitted by the Parent pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended.
2. This Statement, which is the responsibility of the Parent’s Management and approved by the Parent’s Board of Directors, has been prepared in accordance with the recognition and measurement principles laid down in the Indian Accounting Standard 34 “Interim Financial Reporting” (“Ind AS 34”), prescribed under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder and other accounting principles generally accepted in India. Our responsibility is to express a conclusion on the Statement based on our review.
3. We conducted our review of the Statement in accordance with the Standard on Review Engagements (SRE) 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity”, issued by the Institute of Chartered Accountants of India (ICAI). A review of interim financial information consists of making inquiries, primarily of Parent’s personnel responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing specified under Section 143(10) of the Companies Act, 2013 and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
We also performed procedures in accordance with the circular issued by the SEBI under Regulation 33(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, to the extent applicable.
4. The Statement includes the results of the following entities:
Name of the Entity Relationship Vardhman Acrylics Limited Subsidiary company VMT Spinning Company Limited Wholly owned subsidiary
company VTL Investments Limited Wholly owned = subsidiary
company Vardhman Nisshinbo Garments Company Limited Wholly owned = subsidiary
company Vardhman Yarn and Threads Limited Associate company Vardhman Special Steels Limited Associate company Vardhman Spinning and General Mills Limited Associate company
5. Based on our review conducted and procedures performed as stated in Paragraph 3 above and based on the consideration of the review reports of the other auditors referred to in Paragraph 6 below, nothing has come to our attention that causes us to believe that the accompanying Statement, prepared in accordance with the recognition and measurement principles. laid down in the aforesaid Indian Accounting Standard and other accounting principles generally accepted in India, has not disclosed the information required to be disclosed in terms of Regulation 33 of the SEBI (Listing Obligations and
~ Disclosure Requirements) Regulations, 2015, as amended, including the manner in which it is to be «\ disclosed, or that it contains any material misstatement.
6. We did not review the interim financial results of one subsidiary included in the consolidated unaudited financial results, whose interim financial results reflect total assets of Rs. 470.55 crores as at September 30, 2019, total revenues of Rs. 89.47 crores and Rs 180.44 crores for the quarter and half year ended September 30, 2019 respectively, total net profit after tax of Rs. 10.67 crores and Rs. 27.46 crores for the quarter and half year ended September 30, 2019 and total comprehensive income of Rs. 10.67 comprehensive loss of Rs. 0.87 crore and Rs. 0.58 crore for the quarter and half year ended September 30, 2019 respectively, as considered in the Statement, in respect of one associate, whose interim financial results have not been reviewed by us. These interim financial results have been reviewed by other auditors whose reports have been furnished to us by the Management and our conclusion on the Statement, in so far as it relates to the amounts and disclosures included in respect of these subsidiary and associate, is based solely on the reports of the other auditors and the procedures performed by us as stated in paragraph 3 above.
.
| Our conclusion on the Statement iS not modified in respect of these matters.
| 7. The consolidated unaudited financial results includes the interim financial results of three subsidiaries which have not been reviewed by their auditors, whose interim financial results reflect total assets of Rs.
September 30, 2019 respectively and net cash inflow of Rs. 1.25 crores for the half year ended September 30, 2019, as considered in the Statement. The consolidated unaudited financial} results also half year ended September 30, 2019 respectively and total comprehensive income of Rs. 2.80 crores and Rs. 5.03 crores for the quarter and half year ended September 30, 2019 respectively, as considered in the Statement, in respect of two associates, based on their interim financial information which have not been reviewed by their auditors. According to the information and explanations given to us by the Management, these interim financial information are not material to the Group.
Our Conclusion on the Statement is not modified in respect of our reliance on the interim financial results certified by the Management.
For DELOITTE HASKINS & SELLS LLP Chartered Accountants
Ref.no.2.303 /SBICTCL/DT/2019-20 Date: 08'" November 2019
To,
VARDHMAN TEXTILES LIMITED
Vardhman Premises,
Chandigarh Road, Ludhiana
Kind Attention: Mr. Akshay Jain
Sub:-Certificate u/r_ 52(5) of SEBI (Listing Obligations & Disclosure Requirements)
Regulations, 2015, for NCDs aggregating to Rs 499.80 Crores by Vardhman Textiles
Ltd (“Issuer”), for the half year ended 30% September 2019.
Dear Sir/ Madam,
We are acting as Debenture Trustee for the captioned Debenture Issues. Pursuant to Regulation 52(4) read with Regulation 52(5) of SEBI (Listing Obligations & Disclosure
Requirements) Regulations, 2015, the issuer is required to submit its half yearly financial results with a certificate of Debenture Trustee, that the Debenture Trustee has noted the
contents furnished by the issuer as per the Regulation 52(4).
In pursuance thereof we hereby confirm that we have received the said information vide your
email dated November 8, 2019 along with the relevant/ necessary supporting and we have noted the contents of the financial results furnished by the issuer as per the Regulation 52(4) of the Regulations.
Yours faithfully, For SBICAP Trustee Company Limited