| We have audited the accompanying standalone financial statements of
Muller & Phipps (India) Limited ("the Company"), which comprise the
Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss
and Cash Flow Statement for the year then ended, and a summary of
significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation and presentation of these standalone 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 the
Accounting Standards specified under section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adeaquate accounting records in accordance
with the provisions of the Act for the safeguarding the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgements and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give true and fair view and free from material
misstatements, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken in to account
the provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under section 143(10) of the Act. 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 the 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 financial controls relevant
to the Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place internal financial
controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting estimates made by the Company's Directors, 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 on the standalone
financial statements.
Basis for Qualified Opinion
The financial statements have been prepared on a going concern basis by
the management although the net worth of the Company has been
completely eroded and there are no profits from operational activities,
on the basis that they have business plans for profitable operations in
the future (Refer Note No. 40). However, no such plans have been shown
or explained to us to our satisfaction and hence we are unable to form
any opinion on the going concern status of the Company.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matters
described in the Basis for Qualified Opinion paragraph above, the
aforesaid standalone 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:
i. in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2015;
ii. in the case of the Statement of Profit and Loss, of the profit for
the year ended on that date; and
iii. in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by Central Government of India in terms of sub-section
(11) of section 143 of the Act, we give in the Annexure a statement on
the matters specified in paragraphs 3 and 4 of the Order, to the extent
applicable.
2. As required by section 143(3) of the Act, we report that:
a. We have sought and 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 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 aforesaid standalone financial statements
comply with the Accounting Standards specified under section 133 of the
Act, read with rule 7 of the Companies (Accounts) Rules, 2014.
e. The going concern matter described under the Basis of Qualification
paragraph above, in our opinion, may have an adverse effect on the
functioning of the Company.
f. On the basis of written representations received from the directors
as on 31st March, 2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on 31st March, 2015, from
being appointed as a director in terms of section 164(2) of the Act.
g. With respect to other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
a. The Company has disclosed the impact of pending litigations on its
financial positions in its financial statements - Refer Note 27 to the
financial statements.
b. The Company did not have any long-term contract including
derivative contracts for which there were any material for seeable
losses.
c. There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT
To the Members of Muller & Phipps (India) Limited
As referred to in Paragraph 1 under 'Report on Other Legal and
Regulatory Requirements' in our Auditors' report of even date and as
required by the Companies (Auditor's Report) Order, 2015, issued by the
Central Government in terms of sub section (11) of section 143 of the
Act, and on the basis of such checks as we considered appropriate and
according to the information and explanations given to us during the
course of the audit, we further report that: -
1. a) The Company has not maintained proper records to show full
particulars, including quantitative details and situation of fixed
assets.
b) No physical verification of fixed assets has been conducted by the
management during the year or in the recent past. In our opinion, the
frequency of verification needs to be improved to be commensurate with
the size of the Company and the nature of its business.
2. a) The inventory has been physically verified by the management at
reasonable intervals during the year.
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 the nature of its business.
c) The Company has maintained proper records of inventory. The
discrepancies between the physical inventory and the book records
noticed on physical verification were not material and have been
properly dealt with in the books of account.
3. The Company has not granted any loans, secured or unsecured to
companies, firms or other parties covered in the register maintained
under Section 189 of the Companies Act, 2013 ('the Act').
4. In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of inventory, fixed assets and for the sale of goods and
services. During the course of our audit, we have neither been informed
nor have we observed any continuing failure to correct major weaknesses
in internal controls.
5. The Company has not accepted any deposits from the public within
the meaning of the provisions of Sections 73 to 76 or any other
relevant provisions of the Act and Rules framed thereunder.
6. The Central Government has not prescribed maintenance of cost
records under section 148(1) of the Companies Act, 2013, for any of the
products of the Company
7. a) According to the information and explanations given to us and on
the basis of the examination of the books of account carried out by us,
the Company has been generally regular in depositing undisputed
statutory dues including Provident Fund, Employees' State Insurance,
Income-tax, Sales-tax, Wealth Tax, Service Tax, Excise Duty, Cess and
other statutory dues, wherever applicable with the appropriate
authorities. There were no undisputed arrears of statutory dues
outstanding as at 31st March, 2015 for a period of more than six months
from the date they became payable.
b) According to the information and explanations given to us by
management and the records of the Company examined by us, there were no
disputed dues in respect of Sales Tax, Income Tax, Custom Duty, Wealth
Tax, Service Tax, Excise duty and Cess which have not been deposited as
on 31st March, 2015 except as stated below:
Nature of dues pending Amount Rs. Forum where
dispute is
Income Tax A.Y 2001-02 10,57,725 Commissioner of
Income-tax (Appeals)
Income Tax Penalty A.Y 2001-02 2,10,00,000 Commissioner of
Income-tax (Appeals)
Sales Tax A.Y 2004-05 2,85,000 Sales Tax Authorities
A.Y 2002-03 2,29,000 - Lucknow
Income Tax A.Y 2011-12 2,79,950 Commissioner of
Income-tax (Appeals)
c) There were no amounts which were required to be transferred to the
Investors Education and Protection Fund by the Company in accordance
with the relevant provisions of the Act and the rules made thereunder.
8. The accumulated losses of the Company as at 31st March, 2015 are
more than fifty percent of its net worth. It has not incurred cash
losses during the financial year ended on that date but has incurred
cash losses in the immediately preceding financial year.
9. In our opinion and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to
banks and financial institutions during the year. The Company has not
issued any debentures
10. According to the information given to us and as per the records
examined by us, the Company has not given any guarantee for the loans
taken by others from banks or financial institutions during the year.
11. The Company has not availed / utilized any term loan.
12. According to the information and explanations given to us, no
material fraud on or by the Company has been noticed during the course
of our audit or reported during the year.
For Ford, Rhodes, Parks & Co.
Shrikant Prabhu
Place : Mumbai Partner
Date : 28th May, 2015 Membership No. 35296
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