1. We have audited the attached Balance Sheet of M/s SWADESHI
INDUSTRIES AND LEASING LIMITED as at 31s1 March, 2010, the Profit and
Loss Accounts and the Cash Flow Statement of the Company for the year
ended on that date, both annexed thereto. These financial statements
are the responsibility of the Companys management. Our responsibility
is to express an opinion on these financial statements based on our
2. We conducted our audit in accordance with auditing standards
generally accepted in India. These Standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatements. 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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
3. As required by the Companies (Auditors Report) Order, 2003, issued
by the Central Government in terms of Section 227(4A) of the Companies
Act, 1956, we enclose in the Annexure, a statement on the matters
specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to in paragraph 3
above, we report as follows:
a. We have obtained all the information and explanation, which to the
best of our knowledge and belief were necessary for the purposes of our
b. In our opinion, proper books of account as required by law have
been kept by the company as far as appears from our examination of
c. The Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
d. In our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report are in compliance
with the accounting standards referred to in sub-section (3c) of
section 211 of the Companies Act, 1956;
e. In our opinion and to the best of our information and according to
the explanation given to us, the said accounts give the information
required by the Companies Act, 1956, in the manner so required and give
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 the affairs of the
Company as at 31st March 2010 and
ii) In the case of the Profit & Loss Account, of the Profit/Loss of the
Company for the year ended on that date and
iii) In the case of the Cash Flow Statement, of the Cash Flow of the
Company for the year ended on that date.
f. On the basis of written representations received from the
directors, taken on record by the Board of Directors, none of the
directors is disqualified as on 31s1 March 2010. from being appointed
as a director in terms of section 274 (1)(g)ofthe Companies Act, 1956;
Annexure to the Auditors Report of SWADESHI INDUSTRIES AND LEASING
Referred to in paragraph 3 of our report of even date I) In respect of
its fixed assets:
a. The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
b. All the assets have not been physically verified by the management
during the year but there is a regular programme of verification which,
in our opinion, is reasonable having regard to the size of the company
and the nature of its assets. No material discrepancies were noticed on
c. During the year, no substantial or other part of the fixed assets
of the unit of the company was disposed off.
ii) In respect of inventory of raw material, stores and operating
a. The inventory has been physically verified during the year by the
management. In our opinion, the frequency of verification is
b. The procedure of the 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 is maintaining proper records of inventory. The
discrepancies noticed on verification between the physical stock and
the book records have been appropriately dealt with in the books of
iii) The company has not granted any loan, secured or unsecured, to
companies, firms or other parties covered in the register maintained
u/s 301 of the Companies Act, 1956.
iv) In respect of the loans, secured or unsecured, taken by the Company
from companies, firms or other parties covered in the register
maintained u/s 301 of the Companies Act, 1956
a) At the year-end, the outstanding balance of such loans is NIL. The
company having repaid all its previous dues as per the terms specified
during the previous year.
b) There are no overdue amounts outstanding at the year-end.
v) 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 with regard to purchase of inventory, fixed assets and with
regards to the sale of goods. During the course of our audit, we have
not observed any continuing failure to correct major weakness in
vi) We are informed that there is no company, firm or party to be
listed in the register referred to the section 301 of the Companies
Act, 1956 and hence we have no comments to offer in respect of clauses
4 (v) (a) of the Companies (Auditors Report) Order, 2003.
vii) In our opinion and according to the information and explanations
given to us, the Company has complied with the provision of section 58A
and 58AA of the Companies Act, 1956 and the Rules framed there under,
with respect to the deposits accepted from the public.
viii) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
ix) We have broadly reviewed the books of account maintained by the
company pursuant to the rules made by Central Government for the
maintenance of cost records under section 209 (1) (d) of the Companies
Act, 1956 and we are of the opinion that prima facie prescribed
accounts and records have been made and maintained.
x) The company is regular in depositing with appropriate authorities
undisputed statutory dues including provident fund, income tax, sales
tax, wealth tax, custom duty, excise duty, cess and other material
statutory dues applicable to it.
xi) In our opinion and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to a
financial institution, bank or debenture holders.
xii) According to the information and explanations given to us, the
company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
xiii) In our opinion, the company is not a Chit fund or a Nidhi mutual
benefit fund/society. Therefore the provisions of clause 4(xiii) of the
Companies (Audit Report) order, 2003 are not applicable to the company.
xiv) In our opinion, the company is not dealing in or trading shares,
securities, debentures and other investments. Accordingly, the
provision of clause 4(xiv) of the Companies (Audit Report) order, 2003
are not applicable to the company.
xv) In our opinion and according to the information and explanations
given to us, the company has not given any guarantees for loans taken
by others from banks or financial institutions and hence we have no
comments to offer in respect of clause 4(xv) of the Companies (Audit
Report) order, 2003.
xvi) In our opinion, company has not taken any term loan during the
year under review.
xvii) According to the information and explanations given to us, and 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
investment. No long term funds have been used to finance short term
assets excepts permanent working capital.
xviii) The company has not issued shares during the year and hence we
have no comments to offer in respect of clause 4(xviii) of the
Companies (Audit Report) order, 2003.
xix) The company has not issued any debentures during the year nor
there is any outstanding as on 31s March 2010.
xx) According to the information and explanations given to us, no fraud
on or by company has been noticed or reported during the course of our
Place :Mumbai For MOTILAL & ASSOCIATES,
Dated :28th June, 2010 Chartered Accountants.
M. L. JAIN