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Smiths & Founders
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« Mar 12
Auditor's Report (Smiths & Founders) Year End : Mar '13
REPORT ON THE FINANCIAL STATEMENTS
 
 1.  We have audited the accompanying fnancial statements of Shimoga
 Technologies Limited (the Company) which comprise the Balance Sheet
 as at march 31, 2013, the Statement of Proft and Loss and Cash Flow
 Statement for the year then ended, and a summary of signifcant
 accounting policies and other explanatory information.
 
 MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
 
 2.  the Company''s management is responsible for the preparation of
 these fnancial statements that give a true and fair view of the
 fnancial position, fnancial performance and cash flows of the Company
 in accordance with the accounting Standards referred to in sub-section
 (3C) of Section 211 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
 fnancial statements that give a true and fair view and are free from
 material misstatement, whether due to fraud or error.
 
 AUDITORS'' RESPONSIBILITY
 
 3.  Our responsibility is to express an opinion on these fnancial
 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 fnancial statements are free
 from material misstatement.
 
 4.  an audit involves performing procedures to obtain audit evidence
 about the amounts and disclosures in the fnancial statements. The
 procedures selected depend on the auditor''s judgment, including the
 assessment of the risks of material misstatement of the fnancial
 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 fnancial 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 fnancial statements.
 
 5.  We believe that the audit evidence we have obtained is suffcient
 and appropriate to provide a basis for our audit opinion.
 
 OPINION
 
 6.  in our opinion and to the best of our information and according to
 the explanations given to us, the fnancial 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, 2013;
 
 b) in the case of the Statement of Proft and Loss account, of the loss
 for the year ended on that date; and
 
 c) in the case of the Cash Flow Statement, of the cash fows for the
 year ended on that date.
 
 7.  attention is invited to Point no.8 in Part i of note 2 regarding
 preparation of accounts on Going Concern basis although the networth of
 the company has eroded and the Company has been declared as sick
 industrial company within the meaning of clause (o) of sub section (1)
 of Section 3 of the Sick industrial Companies act, 1985.
 
 REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
 
 8.  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 specifed in paragraphs 4 and 5 of the Order.
 
 9.  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 appears from our examination of those
 books
 
 c) the Balance Sheet, Statement of Proft and Loss, and Cash Flow
 Statement dealt with by this report are in agreement with the books of
 account.
 
 d) in our opinion, the Balance Sheet, Statement of Proft and Loss and
 Cash Flow Statement comply with the accounting Standards referred to in
 subsection (3C) of Section 211 of the Companies act, 1956;
 
 e) on the basis of written representations received from the directors
 as on march 31, 2013, and taken on record by the Board of directors,
 none of the directors is disqualifed as on March 31, 2013, 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
 
 (as referred in paragraph 8 under ''report on Other Legal and regulatory
 requirements'' section of our report of even date)
 
 i) (a) the Company has maintained proper records showing full
 particulars, including quantitative details and situation of fxed
 assets;
 
 (b) the Company has a regular programme for physical verifcation of its
 fxed assets by which fxed assets are verifed in a phased manner. In
 accordance with this programme, certain fxed assets were verifed during
 the year and no material discrepancies were noticed on such
 verifcation. In our opinion, this periodicity of physical verifcation
 is reasonable having regard to the size of the Company and the nature
 of its assets;
 
 (c) during the year, the company has not disposed off substantial/
 major part of fxed assets.
 
 ii) the company did not have inventories at any time during the year.
 Consequently,the requirements regarding physical verifcation of
 inventories,maintenance of records of inventory and discrepancies
 between physical stocks and book records are not applicable to the
 company for the year.
 
 iii) (a) the Company has not granted any loans, secured or unsecured,
 to companies, frms or other parties listed in the register maintained
 under Section 301 of the Companies act, 1956, during the period. as the
 Company has not granted any loans, secured or unsecured, to parties
 listed in the register maintained under Section 301 of the Companies
 act, 1956, clauses iii(b), iii(c), and iii(d) of the paragraph 4 of the
 Order, are not applicable;
 
 (b) the Company has not taken any loans, secured or unsecured, from
 companies, frms or other parties listed in the register maintained
 under Section 301 of the Companies act, 1956, during the period. as the
 Company has not taken any loans, secured or unsecured, from parties
 listed in the register maintained under Section 301 of the Companies
 act, 1956, clauses iii(f) and iii(g) of the paragraph 4 of the Order,
 are not applicable;
 
 iv) in our opinion and according to the information and explanations
 given to us, there is an internal control system commensurate with the
 size of the Company and the nature of its business with regards to the
 purchase of fxed assets and leasing service. During the course of our
 audit no major weakness has been noticed in respect of these areas;
 
 v) Based on the audit procedures applied by us and according to the
 information and explanations provided by the management, we are of the
 opinion that all transactions that need to be entered into the register
 in pursuance of Section 301 of the act have been so entered;
 
 vi) the Company has not accepted any deposits from the public within
 the meaning of sections 58a and 58aa of the Companies act, 1956 and the
 rules framed thereunder;
 
 vii) the company has an internal audit system, which in our opinion
 needs to be strengthened;
 
 viii) According to the information and explanation given to us,the
 Central Government has not prescribed the maintenance of cost records
 under Section 209(1)(d) of the Companies act, 1956;
 
 ix) (a) According to the records of the Company and information and
 explanations given to us, the Company has been regular in depositing
 undisputed statutory dues including tax deducted at source, value added
 tax and other statutory dues with the appropriate authorities during
 the year;
 
 (b) According to the information and explanation given to us,and on the
 basis of our examination of the books of account, there is no
 undisputed dues in respect of income tax, wealth tax, sales tax,
 customs duty and excise duty outstanding, as at the last day of the
 fnancial year, for a period of more than six months since they became
 payable;
 
 (c) as at march 31, 2013, according to the records of the Company,
 there are no dues outstanding on sales-tax, income-tax, custom duty,
 wealth- tax, excise duty, cess and Investor education and protection
 fund, on account of any dispute.
 
 x) In our opinion, the accumulated losses of the company at the end of
 the fnancial year is greater than ffty percent of its networth as at
 the last day of the fnancial period and has incurred cash loss during
 the fnancial year ended on that date;
 
 xi) according to the information and explanation given to us and based
 on our audit procedures, we are of the opinion that the Company, has
 not defaulted in repayment of its dues to any fnancial institution,
 bank or to debenture holder during the period;
 
 xii) the Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities;
 
 xiii) in our opinion, the Company is not a chit fund or a nidhi/ mutual
 beneft fund/ society. Therefore, clause (xiii) of the Order is not
 applicable to the Company;
 
 xiv) in our opinion and according to information and explanations given
 to us, the Company is not a dealer or trader in securities;
 
 xv) according to the information and explanations given to us and the
 records examined by us, the Company has not given any guarantees for
 loans taken by others from banks or fnancial institutions;
 
 xvi) according to the information and explanations given to us, no term
 loan has been borrowed by the company;
 
 xvii) based on the information and explanations given to us and on an
 overall examination of the balance sheet of the Company, in our
 opinion, there are no funds raised on short term basis which have been
 used for long-term investment;
 
 xviii) the Company has not made any preferential allotment of shares to
 parties and the companies covered in the register maintained under
 Section 301 of the Companies act, 1956;
 
 xix) the Company has not issued any debentures during the year;
 
 xx) the Company has not raised any money by public issue during the
 period , accordingly clause 4(xx) of the order is not applicable;
 
 xxi) During the course of examination of the books and records of the
 company, carried out in accordance with the auditing practices
 generally accepted 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 for the year, nor have we been informed of
 such case by management;
 
                                        For Naik & Shah,
 
                                        Chartered Accountants
 
                                        Frn010270S
 
 Place : Bangalore                      T. RAGHAVENDRA NAIK
 
 date : 13.04.2013                      Partner
 
                                        membership number : 210228
Source : Dion Global Solutions Limited
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