| We have audited the accompanying financial statements of Vishal
Malleables Ltd ("the Company") which comprises the Balance Sheet as at
31 March 2014, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory informations.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the Accounting Principles generally accepted in India including
Accountings Standards referred to in section 211(3C) of the Companies
Act, 1956 ("the Act"). This responsibility includes the design,
implementation and maintenance of internal control relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditor's Responsibility
Our responsibility is 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 and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's 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, the auditor
considers internal control relevant to the Company's 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.
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 31 March 2014;
b) in the case of the Statement of Profit and Loss, of the loss of the
Company for the year ended on that date; and
c) in the case of the Cash Flow Statement, of the Cash Flows of the
Company for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2003 ("the
Order"), issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by 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 books of account as required by law have been
kept by the Company so far as it appears from our examination of such
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
accounts.
d) In our opinion, the Balance Sheet, Statement of Profit and Loss and
the Cash Flow Statement comply with the Accounting Standards referred
to in sub-section (3C) of Section 211 of the Companies Act, 1956; and
e) On the basis of written representations received from the Directors
as on 31st March 2014, and taken on record by the Board of Directors,
we report that none of the Directors is disqualified as on 31st March
2014, from being appointed as a Director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956.
: ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT :
Referred to in Paragraph 1 of our report of even date
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
basis of available information .how ever the company has not produced
fixed assets register for our verification.
b) As explained to us, all 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 discrepancies
were noticed on such physical verification.
c) In our opinion, the Company has not disposed off 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, the inventories of finished goods,
stock-in-process, spares, stores and raw materials have been physically
verified by the management at regular intervals during the year.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of the above
referred 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. According
to the records produced to us for our verification, discrepancies which
are noticed on physical verification of inventories referred to in 2(a)
above, as compared to the book records have been adjusted in the book
records on the basis of a year end scrutiny carried out by the Company.
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 had taken loans from seven parties, including one
company. The maximum amount involved during the year was Rs.177.35
lakhs and the year end balance of loan taken from such parties was
Rs.257.62 lakhs. The Company had given loans to six parties including
two Company. The maximum amount involved during the year was Rs.63.50
Lakhs and the year end balance of loan granted to such parties was
Rs.225.94 lakhs.
b) In our opinion and according to the information and explanations
given to us, the rate of interest, wherever applicable and other terms
and conditions are not prima facie prejudicial to the interest of the
Company.
c) In respect of interest free loans granted by the Company to the
parties are repayable on demand. In respect of loans taken by the
Company the interest payments are regular and the principal amount as
stipulated.
d) In respect of loans taken by the Company and loans given by the
Company are repayable as stipulated and therefore, the question of
overdue amounts does not arise.
4. In our opinion and according to 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 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) The Company has purchased goods and materials and has sold goods and
services in pursuant of contract or arrangements entered in the
register maintained under section 301 of the Companies Act, 1956
aggregating during the year to Rs. 5,00,000/- (Rupees five lakhs only)
or more in respect of one party.
6. The Company has not accepted any deposits from the public.
Therefore the provision of section 58A and section 58AA of the
Companies Act alongwith Companies (Acceptance of Deposits) Rules, 1975
are not applicable to the Company.
7. On the basis of the Internal Audit Report, we are of the opinion
that the internal audit functions carried out by a Firm of Chartered
Accountants appointed by the management is commensurate with the size
of the Company and the nature of its business.
8. We have broadly reviewed the books of accounts maintained by the
company in respect of Product where pursuant to the rules Made by
Central Government the maintenance of cost record has been Prescribes
under section 209 (1) (D) of the companies act-1956 and are of the
opinion that priimafacie, the prescribed accounts and record have been
made and maintained. We have not how ever made a detailed examination
of the records with a view to determining whether they are accurate or
complete.
9. In respect of statutory dues:
According to the records of the Company, undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employee's state Insurance, Income Tax, Sales Tax, Wealth Tax, Custom
Duty, Excise Duty, Cess and other statutory dues have not been
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 March 2014
for a period of more than six months from the date of becoming payable.
10. Accumulated losses of the Company exceeds net worth, excluding
revaluation reserve as at 31st March 2014. The Company has made cash
losses during the financial year covered by our audit.
11. Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
defaulted in repayments of dues to banks. Amounts to Rs. 3129.29/-
Lacs.
12. In our opinion and according to information and explanations 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
securities.
13. In our opinion the Company is not a chit fund or a nidhi/mutual
benefit fund/society. Therefore, 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
own name.
15. The Company has given guarantees for loans taken by others 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 interest of
the Company.
16. The term loans outstanding at the beginning of the year and raised
during the year were applied for the purposes for which they were
raised.
17. According to the information and explanations given to us and on
the overall examination of the Financial Statements, no funds raised on
short term basis have been used for long term investment and
vice-a-versa.
18. The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained U/s.301 of the
Companies Act, 1956 during the year under review.
19. The Company has not issued any debentures during the year.
20. The Company has not raised any money by way of public issue during
the year.
21. Based upon the audit procedures performed and as per the
information and explanations given to us by the management no fraud on
or by the Company has been noticed or reported during the course of our
audit.
For B.A.Pavagadhi & Co.
Chartered Accountants
(ICAI FRN-107862W)
Place: Ahmedabad (Kamal Jain)
Date: 30th June 2014 Partner
[M.No.35172] | 