| 1. We have audited the attached Balance Sheet of M/s Vaishnavi Gold
Limited, Hyderabad as at 31 st March, 2010 and the annexed Profit &
Loss Account for the year ended on that date and report that. These
financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
financial statements based on our audit.
2. We have conducted 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 from 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 management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
3. As required by the Companies (Auditors Report) Order, 2003, issued
by the Company Law Board in terms of Section 227(4A) of the Companies
Act, 1956, We annex a Statement on the matters specified in Paragraphs
4 and 5 of the said Order.
4. Further to our comments above:
(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 books of accounts, as required by law, have
been kept by the company so far as it appears from our examination of
those books;
(c) the said Balance Sheet and Profit and Loss Account are in agreement
with the books of accounts;
(d) in our opinion the Balance Sheet and the Profit and Loss Account
subject to Note No. 1 of Schedule 11 comply with the Accounting
Standards referred to in Sub-section 3(C) of Section 211 of the
Companies Act, 1956;
(e) on the basis of written representation received from the directors
and taken on record by the board of directors, we report that none of
the directors is disqualified as at 31st March, 2010 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 together with the
notes thereon, give the information required by the Companies Act, 1956
in the manner so required and give a true and fair view:
(i) in the case of the Balance Sheet, of the State of Affairs of the
Company as on 31st March, 2010; and
(ii) in the case of Profit and 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 for the year
ended on that date;
ANNEXURE TO THE AUDITORS REPORT (Referred to in Paragraph (3) of our
Report of even date to the members of Vaishnavi Gold Limited)
1) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of all fixed
assets.
b) Physical verification of major assets was conducted by the
management during the year, which in our opinion is reasonable having
regard to the size of the company and nature of its assets .No material
discrepancies were noticed on such verification as compared with book
records.
c) During the year, the company has not disposed off any substantial
part of its fixed assets.
2) a) The inventory of stocks, stores and spare parts has been
physically verified during the year by the management. In our opinion,
the frequency of verification is reasonable.
b) In our opinion, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the company and nature of its business.
c) In our opinion the company is maintaining the proper records of
inventory. The discrepancies noticed on physical verification of
inventory as compared to the book records were not material.
3) The company has neither granted nor taken any loans, secured or
unsecured, from companies, firms or other parties listed in the
register maintained u/s.301 of the Companies Act, 1956.
Since the company has not granted or taken any loans from parties
listed in the register maintained u/s.301, clauses 3(b), 3(c) and 3(d)
are not applicable.
4) In our opinion and according to the information and explanations
given to us, there exist an adequate internal control system
commensurate with the size of the company and the nature of its
business with regard to the purchase of inventories, fixed assets and
for the sale of goods. During the course of our audit, we have not
observed any continuing failure to correct major weakness in internal
controls.
5) To the best of our knowledge and belief and according to the
information and explanations given to us, we are of the opinion that
there were no contracts or arrangements that need to be entered in the
register maintained under section 301 of the Companies Act,
1956.Consiquently, requirement of clauses (5A) and (5B) of paragraph 4
of the order are not applicable.
6) The Company has not accepted any deposits from public within the
meaning of Section 58Aand 58AAof the Companies Act, 1956 and Companies
(Acceptance of Deposits) Rules 1975 with regard to the deposits
accepted form public during the current financial year.
7) The Company has an internal audit system, which in our opinion is
commensurate with the size of the company and the nature of its
business.
8) According to the information given to us the Central Government has
not prescribed maintenance of cost records u/s.209(1)(d) of the
Companies Act in respect of the business of the company.
9) a) The company is regular in depositing undisputed statutory dues
with appropriate authorities including provident fund, Employees State
insurance, Income Tax, Sales tax, Wealth Tax, Service tax, Custom duty,
Excise duty,cess and other material dues applicable to it.
b) There are no undisputed statutory dues outstanding as on 31 st March
2010 for a period of more than six months from the date they become
payable.
10) The Company does not have its accumulated losses as on 31 st March
2010 exceeding 50% of its networth. The Company has not incurred cash
losses in the current and immediately preceding financial year.
11) In our opinion and according to the information and explanations
given to us, the company has not defaulted in the repayment of dues to
any financial institutions or bank or debenture holders, as at the
balance sheet date.
12) In our opinion the Company has not granted any loans and advances
on the basis of security by way of pledge of shares, debentures and
other securities.
13) The Company is not a chit fund, nidhi/mututal benefit fund/ society
and therefore the provisions of clause 4(xiii) of the Companies
(Auditors Report) Order, 2003 are not applicable to the Company.
14) The Company is not dealing or trading in shares, Securities,
Debentures or other Investments and hence the requirement of Para 4
(XIV) of the Companies (Auditors Report) Order 2003 is not applicable
to the Company.
15) In our opinion and according to the information and explanations
given to us, the Company has not given guarantees for loans taken by
other from banks or financial institutions.
16) In our opinion and according to the information and explanations
given to us, terms loans were applied for the purposes for which it is
raised by the Company.
17) In our opinion and according to the information and explanations
given to us, the funds raised on short term basis were not utilized for
long term investment purpose.
18) According to information and explanations given to us, 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 during the year.
19) In our opinion and according to information and explanations given
to us, the Company has not issued any secured debentures during the
period covered by the report. Accordingly, Clause 19 of the Companies
(Auditors Report) Order, 2003 is not applicable to the Company.
20) During the period covered by our audit report, the Company has not
raised any money by public issues.
21) To the best of our knowledge and belief and according to the
information and explanations given to us, no fraud on or by the Company
has been noticed or reported during the course of our audit for the
year ended on 31st March, 2010.
For P. S. NAGARAJU & CO.,
Chartered Accountants,
(Firm Registration No: 011447S)
Sd/
CA P. S. Nagaraju
Partner
(Membership No: 210268)
Place: Hyderabad,
DATE: 4th December,2010.
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