We have audited the attached Balance Sheet of VASWANI INDUSTRIES LTD.
(''The Company''), as at 31st March 2012 and also the Profit & Loss
Account and the Cash Flow Statement for the year ended on that date
annexed thereto. These financial statements are the responsibility of
the Company''s Management. Our responsibility Is to express an opinion
on these financial statements based on our audit.
We conducted our audit In accordance with auditing standards generally
accepted In India. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit Includes
examining, on a test basis, evidence supporting that amounts and
disclosures In the financial statements. An audit also Includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
As required by the Companies (Auditor''s Report) order, 2003 Including
companies (Auditors Report) (Amendment) order 2004 Issued by the
Central Government of India In terms of Sub-section (4A) of section 227
of the companies Act, 1956, we enclose In the Annexure a Statement on
the matters specified In paragraphs 4 & 5 of the said order.
Further to our comments In the Annexure referred to above, we report
1. We have obtained all the Information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
2. In our opinion, proper books of account as required by law have
been kept by the company so far as appears from our examination of
3. The Balance sheet. Profit & loss Account and Cash Flow Statement
dealt with this report are In agreement with the books of account.
4. In our opinion, subject to point no. 6 given below the Balance
Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this
report comply with the accounting standards referred to In sub-section
(3C) of section 211of the companies Act, 1956.
5. Based on the written representations made by all the Directors and
taken on records by the Board, Director of the company do not prlma
fade have any disqualification as referred to In clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956.
6. Attention of the members Is drawn to the following Notes:-
Note No.31 of Notes on financial statements regarding certain
disclosure relating to Micro / Small / Medium Enterprises.
Note No.32 of Notes on financial statements regarding gratuity
7. In our opinion subject to point no. 6 and to the best of our
Information and according to the explanations given to us, and the
books and records examined by us In the normal course of audit, the
said accounts, read together with notes on financial statements and
Significant Accounting Policies appearing In Annexure -1 give a true
and fair view In conformity with the accounting principles generally
accepted In India.
I. In case of Balance Sheet, of the state of affairs of the company as
at 31st March1 2012
II. In case of Profit & Loss Account, of the Profit of the company for
the year ended on that date.
III. In case of Cash Flow Statement, of the Cash Flow of the company
for the year ended on that date.
ANNEXURE TO THE AUDITORS'' REPORT
I. a.) The company has maintained proper records showing full
particulars Including quantitative details and situation of Its fixed
b.) As explained to us, the fixed assets have been physical verified by
the management with a phased program over a period of three year, which
In our opinion. Is reasonable having regard to the size of the company
and the nature of Its assets. No serious discrepancies were noticed on
such verification conducted during the year as compared with the books
c.) Fixed assets disposed off during the year were not substantial to
affect Going Concern assumption of the Company.
II. a.) As explained to us, the Inventory has been physically verified
during the year by the management. In our opinion, the frequency of
verification Is reasonable.
b.) The procedure of physical verification of Inventories followed by
the management are reasonable, so as to cover all Inventories In a
phased manner during the year, and adequate In relation to the size of
the company and nature of Its business.
c.) The company Is maintaining proper records of Inventory. No material
discrepancy was found during the course of physical verification.
III. a) The Company has granted unsecured loans to companies, firms or
other parties listed In the Registers maintained U/S 301 of the
Companies Act 1956 The total no. of Party are 6 and maximum amount
outstanding during the year aggregates to 655.82 lakhs and year end
balances In those accounts together was 4.75 lakhs.
b) In our opinion & according to the Information given to us the rate
of Interest & terms & condition of the loan given by the company are
not prejudicial to the Interest of the company.
c) As explained to us there Is no Irregularity In the receipt of the
principal amount & Interest thereon.
d) There Is no overdue amount of loan granted to parties covered In the
register maintained U/S 301 of Companies Act 1956,so the question of
overdue amount more than Rs. 1 lakh does not arise.
e) Company has accepted unsecured loans from the parties covered In the
Register maintained U/s 301 of the companies Act, 1956.The total no. of
party are 2 and maximum amount outstanding during the year aggregates
to 85.00 Lacs and year end balance In those accounts together was NIL.
f) In our opinion & according to the Information given to us the rate
of Interest & terms & condition of the loan taken by the company are
not prejudicial to the Interest of the company.
g) As explained to us there Is no such stipulation upon the company
regarding the payment of the loan taken by the above party So the
question relating to the regularity In payment of principle will not
h) As stated above there Is no stipulation upon the company to repay
the loan hence the question of overdue amount does not arise at all.
IV. In our opinion and according to the Information and explanation
give to us, there are adequate Internal control procedures commensurate
with the size of the company and nature of Its business with regard to
purchase of Inventory, fixed assets and with regard to sale of goods.
During the course of our audit, we have not observed any major weakness
In Internal control system.
V. a. According to the Information and explanation given to us, we
are of the opinion that the transaction that needs to be entered Into
the register maintained U/s 301 of the companies Act, 1956 has been so
b. In our opinion and accordingly to the Information and explanation
give to us, the transactions made In pursuance of contracts or
arrangements entered In the register maintained U/s 301 of the
Companies Act, 1956 and exceeding the value of 5.00 Lacs (Rupees Five
Lacs) In respect of any party during the year have been made at price,
which are reasonable having regard to prevailing market price at the
relevant point of time.
VI. Based on our scrutiny of the company''s records and according to
the Information and explanation provided by the management. In our
opinion, the company has not accepted any loans or deposits which are
''deposits'' within the meaning of Rule 2 (b) of the Companies
(Acceptance of Deposit''s) Rules, 1975.
VII . In our opinion, the company has an Internal audit system
commensurate with the size and nature of Its business.
VIII. According to the Information and explanation given to us
maintenance of cost records has been prescribed by the Central
Government under clause (d) of sub-section (1) of section 209 of the
Act, such accounts and records has been made and maintained by the
company. We have not, however, made a detailed examination of the
records with a view to determine whether they are accurate or complete.
IX. a.) On the basis of our examination of records and according to
the Information and explanation given to us, the company Is regular In
depositing with appropriate authorities undisputed statutory dues
Including provident fund. Investor education & protection fund,
employees state Insurance, Income tax, sales tax, wealth tax, custom
duty, excise duty, cess and other statutory dues applicable to It and
there are no undisputed statutory dues as above which are outstanding
as at the last day of the financial year concerned for a period of six
months from the date they become payable.
b.) As at 31st March 2012, according to the records of the Company and
the Information and explanations given to us, the following are the
statutory dues which have not been deposited with the concerned
authorities on account of dispute are given below
Period to which
Name of the
statute Nature of the Amount
Lacs) the amounts Forum where
Excise Laws Excise Duty 44.16 2005-06 & 06-07 Additional
Excise Laws Excise Duty 139.64 2005-06 & 06-07 dt-04.04.2012)
and yet to be
Excise Laws Excise Duty 49.72 2004-09 Stay In CESTAT
Excise Laws Excise Duty 3.17 2005-08 Stay In CESTAT
Excise Laws Excise Duty 2.58 2008-09 & 09-10 Stay in CESTAT
Income Tax Penalty 1.01 2005-06 Commissioner
Sales tax Entry tax, 0.57
CST, & VAT 42.72 2007-08 Appeal is sales
x. The company has no accumulated losses and has not Incurred any cash
losses during the financial year covered by our audit.
xi. In our opinion and according to the Information and explanations
given to us, the company has not defaulted In repayment of the dues to
a financial Institution, banks.
xii. In our opinion and according to the Information and explanations
given to us, no loans and advances have been granted by the company on
the basis of security by way of pledge of shares, debentures & other
xiii. The company is not a Chit Fund or a Nidhi / Mutal benefit fund /
Society. Therefore, the provision of clause 4 (xiii) of the companies
(Auditors Report) Order 2003 are not applicable to the company.
xiv. In our opinion, the company Is not dealing In or trading In
shares, securities, debentures and other Investments. Accordingly, the
provision of clause 4 (xlv) of the companies (Auditors Report) Order
2003 are not applicable to the company.
xv. As explained to us the company has not given guarantees for loan
taken by other from bank or financial Institutions.
xvi. According to the Information and explanation given to us, the
company has availed / utilized term loan during the year and had
applied for the purpose for which the loan was obtained.
xvii. According to the Information and explanation given to us and on
an overall examination of the balance sheet of the company, we report
that no funds raised on short term basis have been used for long term
xviii. According to the information and explanation given to us, the
company has not made any preferential allotment of shares to parties
covered In the register maintained U/s 301 of the Act.
xix. The company does not have any issued debentures.
xx. Based on our audit procedures and on the information and
explanations given to us, the management has disclosed on the end use
of money raised by public Issue and the same has been duly verified.
xxi. According to the Information & explanation given to us, no frauds
on or by the company has been noticed or reported during the course of
For SUNIL JOHRI & ASSOCIATES
FIRM REG. NO. 005960C
26th MAY 2012 Mem. No.74654