INDEPENDENT AUDITORS REPORT
The Members of VMS INDUSTRIES LTD
1. We have audited the accompanying financial statement of VMS INDUSTRIES LTD,
which comprise the Balance Sheet as at March 31st, 2013, and the statement of
Profit & Loss and Cash Flow Statement for the year ended, and a summary of significant
accounting policies and other explanatory information.
2. Management is responsible for the preparation of these financial statement that give
a true and fair view of the financial position, financial performance and cash flow of the
Company in accordance with the Accounting Standard referred to in sub-section (3C) of
section 211 of Companies Act, 1956. This responsibility includes the design,
implementation and maintenance of internal control relevant to the preparation and
presentation of the financial statement that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
3. Our responsibility to express an opinion on these financial statements based on our
audit. We conducted our audit in accordance with the Standards on Auditing issued by the
Institute of Chartered Accountants of India. Those Standards require that we comply with
ethical requirements are free from material misstatement.
4. An audit involves performing procedures to obtain audit evidence about the amounts
and disclosures in the financial statements. The procedures selected depend on the
auditors judgment, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk assessments,
auditor considers internal control relevant to the Companys preparation and fair
presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
In our opinion and to the best of our information and according to the explanations
given to us, the 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:
a) In the case of the Balance Sheet, of the state of affairs of the Company as at March
b) In the case of the Profit and Loss Account, of the Profit/loss for the year ended on
that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the year ended on that
Further to our comments in the Annexure referred to above paragraph
1. As required by the Companies (Auditors Report) order, 2003 issued by the
Central Government of India in terms of sub-section (4A) of section 227 of the Act, we
give in Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by the section 227(3) of the Act, 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 audit:
b) In our opinion proper book of account as required by law have been kept by the
Company so far as appears from our examination of those books.
c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with
by this Report are in agreement with the books of account.
d) In our opinion, the Balance sheet, Statement of Profit and Loss and Cash Flow
Statement comply with the Accounting Standards
referred to in sub-section (3C) of section 211 of the Companies Act, 1956;
e) On the basis of written representation received from the directors as on March 31,
2013, and taken on record by the Board of Directors, none of the directors is disqualified
as on March 31, 2013, from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of Companies Act, 1956.
||For K. Solanki & Co.
|Place : Ahmedabad
||Firm Regn. No. 114694W
|Date : 30th May ,2013
||Membership No. 48478
Based on the audit procedures performed for the purpose of reporting a true and fair
view on the financial statements of the Company and taking into consideration the
information and explanations given to us and the books of account and other records
examined by us in the normal course of audit, we report that:-
i) In respect of fixed assets:
a) The Company has maintained proper records showing full particulars including
quantitative details and situation of its fixed assets.
b) The fixed assets have been physically verified during the year by the Management in
accordance with a regular programme of verification which, in our opinion, provides for
physical verification of all fixed assets at reasonable intervals, having regard to the
size of the Company and the nature of its assets. According to the information and
explanations given to us, no material discrepancies were noticed on such verification.
c) As per the records and information and explanation given to us, no substantial part
of fixed assets has been disposes off during the year and it had not affected the going
concern status of the Company.
ii) In respect of inventory:
a) As explanation to us, the inventories have been physically verified during the year
by the management at reasonable intervals.
b) In our opinion and according to the information 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
c) In our opinion and according to the information and explanations given to us, the
Company has maintained proper records of its inventories. The discrepancies noticed on
verification between the physical stocks and the book records were not material.
Estimation of waste is been made and considered as per the management.
iii) The Company has neither granted nor taken any loans, secured or unsecured, to /
from Companies, firms or other parties listed in the Register maintained under Section 301
of the Companies Act, 1956.
iv) In our opinion and as per the information and explanation given to us there are
adequate internal control procedures commensurate with the size of the Company and nature
of its business with regards to purchases of raw materials, stores, fixed assets and also
for sale of goods. During the course of our audit, we have not observed any continuing
failure to correct major weakness in internal control.
v) In respect of contracts or arrangements entered in the Register maintained in
pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and
belief and according to the information and explanation given to us:
a) The particulars of contracts or arrangements referred to Section 301 that needed to
be entered in the Register maintained under the said Section have been so entered.
b) In our opinion and accordance to the information and explanations given to us, the
transactions made in pursuance of such contracts or arrangements, exceeding value of
Rupees Five Lacks have been entered into during the financial year at prices which are
reasonable having regard to the prevailing market prices at the relevant time.
vi) In our opinion and according to the information and explanations given to us, the
Company has not accepted any deposit from public to which the directives issued by Reserve
Bank of India and the provisions of Sections 58A and 58AA or any other relevant provisions
of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with
regard to the deposits accepted from the public apply.
vii) The Company does not have any formal internal audit system but there are adequate
checks and controls at all levels. The management has informed us that the steps are being
taken to introduce internal audit system commensurate with the size and nature of its
viii) We have broadly reviewed the cost records maintained by the company pursuant to
the Companies (Cost Account Records) Rules, 2011 made by the Central Government of India,
the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of
Section 209 of the Act, and are of the opinion that, prima facie, the prescribed cost
records have been maintained. We have not, however, made a detailed examination of the
records with a view to determine whether they are accurate.
ix) a) The Company is generally regular in depositing undisputed statutory dues
including provident fund, investor education protection fund, employees state
insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess
and other material statutory dues with appropriate authorities, wherever applicable to it.
b) According to information and explanation given to us, there are no undisputed
amounts payable in respect of Income Tax, Sales Tax, Service Tax, Customs Duty and Excise
Duty which have remained outstanding as on 31st March, 2012 for a period of
more than six months from the date they become payable.
c) According to information and explanations given to us, there are no statutory dues
which have not been deposited on account of any dispute.
x) The Company has no accumulated losses at the end of the financial year. Further, the
Company has not incurred cash losses during the financial year under audit and during
immediately preceding financial year.
xi) In our opinion an according to the information and explanations given to us, the
Company has not defaulted in repayment of dues to financial institutions, banks.
xii) According to information and explanations given to us and based on the documents
and records produced before us, we are of the opinion that the Company has not granted
loans and advances on the basis of security by way of pledge of shares, debentures and
other securities. Therefore the provisions of clause 4(xii) of the Order are not
applicable to the Company.
xiii) In our opinion, the nature of activities of the Company does not attract any
special statute applicable to chit fund and nidhi / mutual benefit fund / societies.
Therefore the provisions of clause 4(xiii) of the Order are not applicable to the Company.
xiv) In our opinion and according to the information and explanation given to us, the
Company is not generally dealing or trading in shares, securities, debentures and other
investments. However, as and when the Company deals in shares and securities, proper
entries are made in records maintained for the purpose. The shares are held in the name of
xv) According to information and explanations given to us, the Company has given
guarantees for loans taken by Partnership Firm where the Company is Partner, from Bank or
financial institution and the terms and conditions of such guarantees are not prima facie
prejudicial to the interest of the Company.
xvi) In our opinion term loan availed by the Company during the year has been applied
for the purpose for which it was raised.
xvii) 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 no funds
raised on short term basis have been used for long term assets. No long term funds have
been used to finance short term assets.
xviii) 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.
xix) In our opinion and according to the information and explanations given to us, no
debentures have been issued by the Company during the year and clause 4 (xiv) of the Order
is not applicable to the Company.
xx) During the course of our examination of the books and records of the Company,
carried out in accordance with the generally accepted auditing practices in India, and
according to the information and explanation given to us, we have neither come across any
instance of fraud on or by the Company, noticed or reported during the year, nor have we
been informed of such case by the management.
||For K. Solanki & Co.
|Place : Ahmedabad
||Firm Regn. No. 114694W
|Date : 30th May ,2013
||Membership No. 48478