VMS INDUSTRIES LIMITED
ANNUAL REPORT 2011-2012
The Members of
VMS INDUSTRIES LTD
We have audited the annexed Balance Sheet of VMS INDUSTRIES LIMITED, (the
`Company`) as at 31st March 2012, the Profit & Loss Account and also the
Cash Flow Statement for the year ended on that date annexed thereto
(collectively referred as the `Financial Statements`). 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 have conducted our audit in accordance with the 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 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 presentation of the financial statements. We
believe that our audit provides a reasonable basis for our opinion.
As required by the Companies (Auditor`s Report) Order, 2003 (the `Order`)
(as amended), issued by the Central Government of India in terms of sub
section (4A) of Section 227 of the Companies Act 1956 (the `Act`), we
enclose in the Annexure a statement on the matters specified in the
paragraphs 4 and 5 of the Order.
Further to our comments in the Annexure referred to in paragraph (1) above,
we report that:-
a) We have obtained all the information and explanation which to the best
of our knowledge and belief were necessary for the purpose of our audit.
b) In our opinion proper books of accounts as required by law have been
kept by the Company so far as appears from our examination of those books.
c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt
with by this report are in agreement with the books of accounts.
d) In our opinion, these financial statements dealt with by this report
comply with the applicable accounting standards referred to in Sub Clause
[3C] of Section 211 of the Companies Act, 1956.
e) On the basis of written representations received from the Directors, as
on 31st March, 2012 and taken on record by the Board of Directors, we
report that none of the directors is disqualified as on 31st March, 2012
from being appointed as a director in terms of clause (g) of sub-section
(1) of Section 274 of the Companies Act, 1956.
f) In our opinion and to the best of our information and according to the
explanations given to us, the said accounts read with significant
accounting policies and notes thereon 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, in the case of:-
a) The Balance sheet, of the state of affairs of the Company as at March
b) The Profit and Loss Account, of the profit for the year ended on that
c) The Cash Flow Statement, of the Cash Flows for the year ended on that
For K. Solanki & Co.
Place: Bhavnagar Firm Regn. No. 48478
Date : 20th July, 2012 Membership No. 114694W
ANNEXURE TO THE AUDITORS` REPORT OF EVEN DATE TO THE MEMBERS OF VMS
INDUSTRIES LTD, ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31,
(As referred in Paragraph 3 of our report of even date)
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
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 program 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 business.
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 business.
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
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
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 the Company.
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
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
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) As informed to us, during the year, the company has raised Rs.25.75
crore (Rupees Twenty Five Crore Seventy Five Lacs Only) by public issue of
64,38,227 equity shares at Rs.40 per share including premium and
accordingly the provisions of clause 4 (xx) of the Order are applicable to
xxi) 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: Bhavnagar Firm Regn. No. 48478
Date : 20th July, 2012 Membership No. 114694W