| We have audited the accompanying financial statements of M/s. SMITHS &
FOUNDERS (INDIA) LIMITED ("the Company") which comprise the Balance
Sheet as at March 31, 2015, and 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 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 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 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 adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
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 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 have taken into 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 there under.
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 control 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. An audit also includes evaluating the
appropriateness of the 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 financial
statements.
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 31, 2015;
(b) In the case of the Statement of Profit and Loss, of the 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 date
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the 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.
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 it appears from our examination of those
books;
c. The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account;
d. In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under section 133 of the Companies Act,
2013, read with the Rule 7 of the Companies (Accounts) Rules, 2014;
e. On the basis of written representations received from the directors
as on March 31,2015, taken on record by the Board of Directors, none of
the directors is disqualified as on March 31, 2015, from being
appointed as a director in terms of section 164 (2) of the Act;
f. With respect to the 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:
(i) The Company does not have any pending litigation which would impact
its financial position;
(ii) The Company did not have any long term contracts including
derivative contracts for which there were any material foreseeable
losses.
(iii) There were no amounts which were required to be transferred to
the Investor Education and Protection Fund by the Company
Annexure to the Independent Auditors' Report
(i) Fixed Assets
a) The Company has maintained proper records of fixed assets showing
full particulars, including quantitative details and situation of the
assets.
b) The Management has conducted physical verification of fixed assets
at reasonable intervals and no material discrepancies were noticed on
such verification.
(ii) Inventory
a) The inventory has been physically verified during the year by the
management. In our opinion the frequency of verification is reasonable.
b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and nature of its business.
c) The Company is maintaining proper records of inventory. There were
no material discrepancies noticed on verification between physical
stock and books of account.
(iii) Loans and Advances
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 Companies Act, 2013. Accordingly the provisions of
clause (iii) (a) & (b) of the above said order are not applicable to
the company.
(iv) Internal Control
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, with regard to
purchase of inventory, fixed assets and for sale of goods and services.
We have not noted any continuing failure to correct major weakness in
the internal controls during the course of audit.
(v) Deposits
According to the information and explanation given to us, and based our
verification, the Company has not accepted any deposits from public
during the year and the provisions of Section 73 to 76 and the
directives of Reserve Bank of India have been complied with by the
Company.
(vi) Cost records
According to information and explanation given to us, the company is
not required to maintain cost records as per section 148 of the Act,
hence no comment is required on the same.
(vii) Statutory Dues
a) According to the records of the Company, the Company is regular in
depositing with appropriate authorities undisputed statutory dues
including provident fund, employee's state insurance, income tax, sales
tax, wealth tax, service tax, duty of customs, duty of excise, value
added tax, cess and other statutory dues applicable to it.
b) According to the records of the Company, there are no dues of income
tax or sale tax or wealth tax or service tax or duty of customs or duty
of excise or value added tax or cess which have not been deposited on
account of any dispute.
c) According to the information and explanation given to us, the
company did not have amount required to be transferred to Investors
Education and Protection Fund, hence no comment is required on the
same.
(viii) Erosion of net worth
Consequent to a one-time charge of Rs.1,15,57,079/-, being the carrying
amount of Assets whose written down value has been written off since
the useful life is nil as at 01.04.2014 pursuant to the provisions of
Companies Act, 2013, to the retained earnings / accumulated losses, the
Company's accumulated losses has exceeded fifty percent of its
net-worth at the end of the financial year. The Company has incurred
cash losses of Rs. 1,41,12,954/- during the financial year covered by
our audit and Rs. 80,00,966/- in the immediately preceding financial
year.
(ix) Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that the
company has not defaulted in repayment of dues to banks. The Company has
no dues to any other financial institution or debenture holders.
(x) According to the information and explanations given to us, the
Company has not given any guarantee for the loans taken by others from
the bank or financial institutions.
(xi) According to the information and explanations given to us, the
Company has applied the term loans for the purpose for which they were
obtained.
(xii) In our opinion and to the best of our information and according
to the explanations given to us no fraud on or by the Company have been
noticed or reported during the year.
For B N Subramanya & Co.
Chartered Accountants
Firm Reg.No.004142S
DEVENDRA NAYAK
Place: Bangalore Partner
Date: 30th May, 2015 Membership No. 27449
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