We have audited the attached Balance Sheet of M/s. Vatsa Education
Limited as at 31st July, 2004 and the Profit and Loss Account 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.
1. 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 the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by the management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
2. As required by the Companies (Auditor's Report) Order, 2003 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
hereto a statement on the matters specified in paragraphs 4 and 5 of
the said order.
3. Further to our comments in the Annexure, referred to in paragraph
(2) above we report that :
a) We have obtained all the information and explanations which to the
best of our Knowledge and belief were necessary, for the purpose of our
b) In our opinion, proper books of accounts, as required by law, have
been kept by the Company, so far as, it appears from our examination of
c) The balance sheet and Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
d) In our opinion the Balance Sheet, Profit & Loss Account and Cash
Flow Statement dealt with by this report comply with the mandatory
Accounting Standard referred in sub section (3C) of section 211 of the
Companies Act, 1956.
e) We are unable to comment as we have not received written
representation, from the Directors of the company, as on 31st July,
2004, regarding disqualification as a directors of the company in terms
of clause (g) of sub-section (1) of section 274 of the Companies Act.
In our opinion and to the best of our information and according to the
explanations given to us, the said accounts read together with the
Significant Accounting Policies and other notes thereon give the
information required by the Companies Act, 1956, in the manner so
required, and present a true and fair view, in conformity with the
accounting principles generally accepted in India :
(i) in the case of the Balance Sheet, of the State of Affairs of the
Company as at 31st July, 2004 and,
(ii) in the case of the Profit & Loss Account of the Profit of the
Company for the Year ended on that date.
(iii) in the case of cash flow statement of the cash flows for the year
ended on that date.
FOR A. R. VISHWAKARMA CO.
Place : Kalyan A. R. VISHWAKARMA
Date : 24th September, 2004 Proprietor
ANNEXURE TO THE AUDITORS REPORT
1. In respect of its fixed assets :
a. The Company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets on the
bases of available information.
b. As explained to us, the fixed assets have been physically verified
by the management during the year in a phased periodical manner, which
in our opinion is reasonable, having regard to the size of the Company
and nature of its assets. No material discrepanicies were noticed on
such physical verification.
c. In our opinion, the Company has not disposed of substantial part of
fixed assets during the year and the going concern status of the
Company is not affected.
2. In respect of its inventories :
a. As explained to us, Inventories have been physically verified by the
management at regular intervals during the year.
b. In our opinion and according to the information and explanation and
explanations given to us, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of its business.
c. The Company has maintained proper records of inventories. As
explained to us, there were no material discrepancies noticed on
physical verification of inventory as compared to the book records.
3. In respect of loans, secured or unsecured, granted or taken by the
Company to/from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
a. The Company has not granted loans and has not taken loans from the
parties covered in the register maintained u/s. 301 of the Companies
b. In our opinion and according applicable and other terms and
conditions are not prima facie prejudicial to the interest of the
c. In respect of loans granted by the Company to one party, the amount
has been repaid of loans granted by the Company to one party, the
amount has been repaid during the year. In respect of the other party,
a wholly owned subsidiary of the Company, the loan is interest free and
is repayable on demand. In respect of loans taken by the Company, the
interest payments are regular and the principal amount is repayable on
d. There is no overdue amount in respect of loans taken by the Company.
In respect of loans given by the Company, these are repayable on demand
and therefore the question of overdue amounts does not arise.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business for the purchase of inventory, fixed assets and also for the
sale of goods. During the course of our audit, we have not observed any
major weaknesses in internal controls.
5. In respect of transactions covered under Section 301 of the
Companies Act, 1956.
a. In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements, that needed to be entered into in the register maintained
under Section 301 of the Companies Act, 1956 have been so entered.
b. In our opinion and according to the information and explanations
given to us, there are no transactions in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act 1956 aggregating during the year to Rs. 500000/- or
more in respect of any party.
6. The Company has not accepted any deposits from the public.
7. In our opinion, the internal audit system of the Company is
commensurate with its size and nature of its business.
8. The Central Government has prescribed maintenance of Cost Records
under Section 209(1)(d) of the Companies Act, 1956 in respect of
certain manufacturing activities of the Company. We have broadly
reviewed the accounts and records of the Company in this connection and
are of the opinion, that prima facie, the prescribed accounts and
records have been made maintained. We have not, however, made a
detailed examination of the same.
9. In respect of statutory dues :
a. According to the records of the Company, undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees' State Insurance, Income-Tax, Sales tax, Wealth Tax, Customs
Duty, Excise Duty, Cess and other statutory dues have been generally
regularly deposited with the appropriate authorities. According to the
information and explanations given to us, no undisputed amounts payable
in respect of the aforesaid dues were outstanding as at 31st July 2004
for a period of more than six months from the date of becoming payable.
b. There are no undisputed statutory dues.
10. The Company has no accumulated losses and has not incurred any cash
losses during the financial year covered by our audit or in the
immediately preceding financial year.
11. Based on our audit procedures and according to the information and
explanation given to us, we are of the opinion that the Company has not
defaulted in repayment of dues to financial institutions, banks or
12. In our opinion and according to the information and explanation
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 and other
13. In our opinion, the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Thereof, clause-4 (xiii) of the Companies
(Auditor's Report) Order 2003 is not applicable to the Company.
14. The Company has maintained proper records of transactions and
contracts in respect of trading in securities, debentures and other
investments and timely entries have been made therein. All shares,
debentures and other investments have been held by the Company in its
15. The Company has given guarantees for loans taken by other from
banks or financial institutions. According to the information and
explanations given to us, we are of the opinion that the terms and
conditions thereof are not prima-facie prejudicial to the interests of
16. The Company has not raised any new term loans during the year. The
term loans outstanding at the beginning of the year were applied for
the purposes for which they were raised.
17. According to the information and explanations given to us and on an
overall examination of the Balance Sheet of the Company, we are of the
opinion that the Company has not utilized any amount from short term
sources towards repayment of long-term borrowings and acquisition of
18. During the year, the Company has not made any preferential
allotment of shares to parties and companies covered in the Register
maintained under Section 301 of the Companies Act, 1956.
19. The Company has not issued debentures so the question of creating
securities does not arise.
20. The Company has not raised any money by way of public issue during
21. In our opinion and according to the information and explanations
given to us, no fraud on or by the Company has been noticed or reported
during the year, that causes the financial statements to be materially
FOR A. R. VISHWAKARMA CO.
A. R. VISHWAKARMA
Place : Kalyan
Date : 24th September, 2004