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Auditor Report of SMIFS Capital Markets Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of SMIFS CAPITAL MARKETS LIMITED ("the Company") which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, 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 of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash fl ows of the company in accordance with accounting principles generally accepted in India, including the Accounting Standards specifi ed 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 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 preparation and presentation of the fi nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone fi nancial 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 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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal fi nancial 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 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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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, of the state of affairs of the Company as at 31st March, 2015, and its Profit and its cash fl ows for the year 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 the section 143 of the Companies Act, 2013, 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. On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2015, from being appointed as a director in terms of section 164(2) of the Companies Act, 2013.

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 or information and according to the explanations given to us :

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - refer note no. 32 to the standalone financial statements;

ii. The Company did not have any material foreseeable losses on long-term contracts including derivative contracts;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

The Annexure referred to in paragraph 1 under the heading "Report on the other legal and regulatory requirements" of our report of even date to the members of SMIFS CAPITAL MARKETS LIMITED on the standalone fi nancial statements of the Company for the year ended 31st March 2015

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

i) In respect of its fixed assets :

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets.

b) The fixed assets have been physically verified wherever practicable on a phased manner by the Management/Internal Auditors and the reconciliation of the quantities with the book records has been done on continuous basis. Further the differences, if any, arising out of such reconciliation so far has been adjusted and no serious discrepancies between book records and physical verification has been noticed.

ii) In respect of its inventories :

a) The inventory has been physically verified during the year by the Management/Internal Auditors. In our opinion, the frequency of verifi cation 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 the nature of its business.

c) On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining proper records of inventory. There was no material discrepancies noticed on physical verification of inventory as compared to the book records.

iii) The Company has not granted any loans, secured or unsecured loan to companies, firms or other parties listed in the Register maintained under section 189 of the Companies Act, 2013. As the company has not granted any loans, secured or unsecured, to parties listed in the registers maintained under section 189 of the Companies Act, 2013 paragraphs (iii)(a) and (b) of the paragraph 3 of the Order are not applicable.

iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

v) The Company has not accepted any public deposit.

vi) According to the information and explanations provided by the management, the Company is not engaged in production, processing, manufacturing or mining activities. Hence the provision of section 148(1) does not apply to the Company and in our opinion no comment on maintenance of cost records under section 148(1) is required.

vii) Statutory and other dues :

a) According to the information and explanations given to us and on the basis of our examination of the books and account, the Company has been regular in depositing 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 any other statutory dues as applicable with the appropriate authorities during the year. According to the information and explanations given, no undisputed dues as above were outstanding as at 31st March, 2015 for a period of more than six months from date they become payable.

b) According to the information and explanations given to us and the records of the Company examined by us, the following are the particulars of dues on account of 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 any other statutory dues as applicable with the appropriate authorities that have not been deposited on account of any dispute :

Name of the Statute Nature of Due Amount (Rs.) Forum where Dispute is pending

Uttar Pradesh Sales Tax Due 91,125/- Commissioner of Sale Tax Act Appeal Sales Tax

Employee State ESI 1,42,274/- Commissioner of Insurance Appeal ESI

Income Tax Act, 1961 Income Tax 30,50,623/- Commissioner of Income Tax (Appeal)

c) According to the information and explanations given to us and on the basis of our examination of the books and account, the Company has transferred the amount required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made there under has been transferred to such fund within time.

viii) The Company does not have accumulated losses at the end of the fi nancial year. The Company has not incurred any cash losses during the current financial year and in the immediately preceding financial year.

ix) As per the Books and records maintained by the company and according to the information and explanations given to us, in our opinion, the company has not defaulted in repayment of dues to Financial Institution or Bank or debenture holder during the current fi nancial year.

x) In our opinion and according to the information and explanations given to us, Company has not given any guarantee for loans taken by others from banks or financial institutions.

xi) In our opinion and according to the information and explanations given to us, the term loan obtained by the Company has been applied for the purpose, for which they were raised.

xii) 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 was noticed or reported during the year.

3A, Oriental House For J. S. VANZARA & ASSOCIATES

6C, Elgin Road Chartered Accountants

Kolkata-700 020 FRN NO : 318143E

AUROBINDA PANDA

Partner This is the 27th Day of May 2015 Membership No. 064888


Mar 31, 2014

We have audited the accompanying financial statements of M/s SMIFS CAPITAL MARKETS LIMITED ("the Company") which comprise the Balance Sheet as at March 31, 2014, 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:

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance 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") read with the general circular 15/2013 dated 13th September, 2013 of the ministry of corporate Affairs in respect of section 133 of the Companies Act, 2013. 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.

Auditors'' 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 but not for the purpose of expressing an opinion on the effectiveness of the entity’s interal control. 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.

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:

i. In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014; and

ii. In the case of the Statement of Profit and Loss, of the Profit for the year ended on that date;

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, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of the section 227 of the Act, 1956, 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 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 Balance Sheet, Statement of Profit and Loss comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 of the ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

e. On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 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.

REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON THE OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the curse of our audit, we report that:

i) In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets.

b) We did not carry out the physical verification of fixed assets. However, there exists a program of periodical verification in phased manner. No material discrepancy between book records and physical verification has been noticed.

c) Based on our scrutiny of the records of the Company, we report that the Company has not disposed off any material part of fixed assets, which would affect the going concern status of the Company.

ii) In respect of its inventories

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 the nature of its business.

c) The Company is maintaining proper records of inventory. As explained to us, there was no material discrepancies noticed on physical verification of inventory as compared to the book records.

iii) In respect of loans

a) The Company has not granted any loans, secured or unsecured loan to companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. As the company has not granted any loans, secured or unsecured, to parties listed in the registers maintained under section 301 of the Companies Act, 1956 paragraphs (iii)(b), (c) and (d) of the Order, are not applicable.

b) The Company has not taken any loans, secured or unsecured loan, from companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. As the company has not taken any loans, secured or unsecured, from parties listed in the registers maintained under section 301 of the Companies Act, 1956 paragraphs (iii)(e), (f) and (g) are not applicable.

iv) In our opinion and according to the 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 with regard to purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v) In respect of transactions entered in the register maintained in pursuance of section 301 at the Companies Act, 1956.

a) To the best of our knowledge and belief and according to the information and explanations given to us, transactions that needed to be entered into the register have been so entered.

b) According to the information and explanations given to us and the records examined by us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 (Excluding loans reported under paragraph (iii) above) is in excess of Rs. 5 Lakhs in respect of any party, the transactions have been made at price which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

vi) The Company has discontinued acceptance of public deposits w.e.f 15/07/1997. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 as applicable, with regards to the deposits accepted from public. As per the information and explanations given to us no order under the aforesaid sections has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal on the Company.

vii) In our opinion, the Company has an internal audit system to commensurate with the size and nature of its business.

viii) According to the information and explanations provided by the management, the Company is not engaged in production, processing, manufacturing or mining activities. Hence the provisions of section 209(1)(d) does not apply to the Company. Hence in our opinion no comment on maintenance of cost records under section 209(1)(d) is required.

ix) Statutory and other dues

a) According to the information and explanations given to and records examined by us, the Company has been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty and Excise Duty as applicable with the appropriate authorities during the year.

b) According to the information and explanations given, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty were outstanding, as at 31st March, 2014 for a period of more than six months from date they become payable.

c) According to the records of the Company and the information and explanations given to us, the following are the particulars of dues on account of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty and cess matters that have not been deposited on account of any dispute.

Name of the Statute Nature of Due Amount (Rs.) Forum where Dispute is pending

Uttar Pradesh Sales Tax Due 91,125 Commissioner of Sale Tax Act Appeal Sales Tax

Income Tax Act, 1961 Income Tax 30,50,623/- Commissioner of Income Tax (Appeal)

x) The Company does not have accumulated losses at the end of the financial year. The Company has not incurred any cash losses during the current financial year.

xi) As per the Books and records maintained by the company and according to the information and explanations given to us, in our opinion, the company has not defaulted in repayment of dues to Financial Institution or Bank during the year.

xii) According to the information and explanations given to us and based on the documents and records produced before us, 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.

xiii) In our opinion, and to the best of our information and according to the explanations provided by the management, we are of the opinion that the Company is neither a Chit Fund nor a Nidhi/ Mutual benefit society. Hence, in our opinion, the provisions of any special statute as specified under paragraph 4 (xiii) of the order are not applicable to the Company.

xiv) In our opinion and according to the information and explanations given to us, the company has maintained proper records of transaction and contracts regarding its investments, and timely entries have been made there; also the shares, securities, debentures and other investments, have been held by the Company in its own name except of the exemption granted under section 49 of the Companies Act, 1956 or the shares for which the company held valid transfer forms or which are in the process of transfer in its name and as stated in " Note No. 11" of the notes on financial statements.

xv) In our opinion and according to the information and explanations given to us, Company has not given any guarantee for loans taken by others.

xvi) In our opinion and according to the information and explanations given to us, the term loan obtained by the Company has been applied for the purpose, for which they were raised.

xvii) According to the information and explanations given to us and on an overall examination of Balance Sheet of the Company, in our opinion, there were no funds raised on a short term basis which were used for long term investment.

xviii) According to the 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.

xix) According to the information and explanations given to us and the records examined by us, the Company has not issued any debentures during the year.

xx) The Company has not raised any money by public issue during the year.

xxi) 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 was noticed or reported during the year.



3A, Oriental House, For J. S. VANZARA & ASSOCIATES 6C, Elgin Road, Chartered Accountants Kolkata - 700 020 FRN NO: 318143E

AUROBINDA PANDA Partner This is the 28th Day of May 2014 Membership No.064888


Mar 31, 2013

Report on the Financial Statements :

We have audited the accompanying financial statements of M/s SMIFS CAPITAL MARKET LIMITED ("the Company") which comprise the Balance Sheet as at March 31, 2013, 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 :

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' 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:

i. In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

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, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of the section 227 of the Act, 1956, 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 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 Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (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 disqualified as on 31 March 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 AUDITORS'' REPORT

REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON THE OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the curse of our audit, we report that:

i) In respect of its fixed assets :

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets.

b) We did not carry out the physical verification of fixed assets. However, there exists a program of periodical verification in phased manner. No material discrepancy between book records and physical verification has been noticed.

c) Based on our scrutiny of the records of the Company, we report that the Company has not disposed off any material part of fixed assets, which would affect the going concern status of the Company.

ii) In respect of its inventories :

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 the nature of its business.

c) The Company is maintaining proper records of inventory. As explained to us, there was no material discrepancies noticed on physical verification of inventory as compared to the book records.

iii) In respect of loans :

a) The Company has not granted any loans, secured or unsecured loan to companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. As the company has not granted any loans, secured or unsecured, to parties listed in the registers maintained under section 301 of the Companies Act, 1956 paragraphs (iii)(b), (c) and (d) of the Order, are not applicable.

b) The Company has not taken any loans, secured or unsecured loan, from companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. As the company has not taken any loans, secured or unsecured, from parties listed in the registers maintained under section 301 of the Companies Act, 1956 paragraphs (iii)(e), (f) and (g) are not applicable.

iv) In our opinion and according to the 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 with regard to purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v) a) 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 tha particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements entered in the registers maintained under section 301 and exceeding the value of rupees five lakh in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) The Company has discontinued acceptance of public deposits w.e.f 15/07/1997. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 as applicable, with regards to the deposits accepted from public. As per the information and explanations given to us no order under the aforesaid sections has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal on the Company.

vii) In our opinion, the Company has an internal audit system to commensurate with the size and nature of its business.

viii) According to the information and explanations provided by the management, the Company is not engaged in production, processing, manufacturing or mining activities. Hence the provisions of section 209(1)(d) does not apply to the Company. Hence in our opinion no comment on maintenance of cost records under section 209(1)(d) is required.

ix) Statutory and other dues :

a) According to the information and explanations given to and records examined by us, the Company has been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty and Excise Duty as applicable with the appropriate authorities during the year.

b) According to the information and explanations given, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty were outstanding, as at 31st March, 2013 for a period of more than six months from date they become payable.

c) According to the records of the Company and the information and explanations given to us, the following are the particulars of dues on account of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty and cess matters that have not been deposited on account of any dispute :

Name of the Statute Nature of Due Amount (Rs.) Forum where Dispute is pending

Uttar Pradesh Sales Tax Due 91,125 Commissioner of Sale Tax Act Appeal Sales Tax

Income Tax Act, 1961 Income Tax 30,50,623/- Commissioner of Income Tax (Appeal)

x) The Company does not have accumulated losses at the end of the financial year. The Company has not incurred any cash losses during the current financial year.

xi) As per the Books and records maintained by the company and according to the information and explanations given to us, in our opinion, the company has not defaulted in repayment of dues to Financial Institution or Bank during the year.

xii) According to the information and explanations given to us and based on the documents and records produced before us, 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.

xiii) In our opinion, and to the best of our information and according to the explanations provided by the management, we are of the opinion that the Company is neither a Chit Fund nor a Nidhi/ Mutual benefit society. Hence, in our opinion, the provisions of any special statute as specified under paragraph 4 (xiii) of the order are not applicable to the Company.

xiv) In our opinion and according to the information and explanations given to us, the company has maintained proper records of transaction and contracts regarding its investments, and timely entries have been made there; also the shares, securities, debentures and other investments, have been held by the Company in its own name except of the exemption granted under section 49 of the Companies Act, 1956 or the shares for which the company held valid transfer forms or which are in the process of transfer in its name and as stated in " Note No. 11" of the notes on financial statements.

xv) In our opinion and according to the information and explanations given to us, Company has not given any guarantee for loans taken by others.

xvi) In our opinion and according to the information and explanations given to us, the term loan obtained by the Company has been applied for the purpose, for which they were raised.

xvii) According to the information and explanations given to us and on an overall examination of Balance Sheet of the Company, in our opinion, there were no funds raised on a short term basis which were used for long term investment.

xviii) According to the 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.

xix) According to the information and explanations given to us and the records examined by us, the Company has not issued any debentures during the year.

xx) The Company has not raised any money by public issue during the year.

xxi) 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 was noticed or reported during the year.

3A, Oriental House, For J. S. VANZARA & ASSOCIATES

6C, Elgin Road, Chartered Accountants

Kolkata - 700 029 FRN NO: 318143E

AUROBINDA PANDA

Partner

This is the 24th Day of May 2013 Membership No.064888


Mar 31, 2012

We have audited the attached Balance Sheet of SMIFS Capital Markets Limited, as at 31st March 2012 and also the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial Statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We have conducted our 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 of material 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.

As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. Further to our comments in the Annexure referred to above, we report that: i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii) 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 and proper returns adequate for the purpose of our audit have been received from the branches not visited by us;

iii) 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;

iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

v) On the basis of the written representations received from the directors, as on 31st March 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2012, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1 956, 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 2012;

b) in the case of the Statement of Profit and Loss , of the Profit for the year ended on that date; and

c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT (Referred to in paragraph 3 thereof)

i) In respect of its fixed assets:

a) The Company is generally maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

b) As explained to us, some of the fixed assets have been physically verified during the year by the management in accordance with a phase programme of verification adopted by the Company. In our opinion, the period of verification is reasonable having regard to the size of the Company and nature of its business. No material discrepancies were noticed on such verification.

c) Based on our scrutiny of the records of the Company, we report that the Company has disposed off some fixed assets during the year. Based on the information and explanations given by the management and on the basis of audit procedures performed by us, we are of the opinion that the sale of the said fixed assets has not affected the going concern.

ii) As the Company provides Investment Banking Service and deals in share and securities which do not fall under the definition of inventory as clarified by The Institute of Chartered Accountants of India in its Statement on CARO 2003, the requirements of reporting on physical verification of stock or maintenance of inventory records in our opinion are not applicable.

iii) a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. As the Company has not granted any loans, secured or unsecured, to parties listed in the registers maintained under section 301 of the Companies Act, 1956 paragraphs (iii)(b), (c) and (d) of the Order, are not applicable. J

b) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. As the Company has not taken any loans, secured or unsecured, from parties listed in the registers maintained under section 301 of the Companies Act, 1956 paragraphs (iii)(e), (f) and (g) of the Order, are not applicable.

iv) Having regard to the nature of the Company's business and based on our scrutiny of the Company's records and according to the information and explanations given to us, we report that the Company's activities do not include purchase of inventory and sale of goods. In our opinion and according to the information and explanation received by us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of fixed assets and sale of services. Further, on the basis of our examination, and according to the information and explanations given to us, we have neither come across nor have we been informed of any instance of major weaknesses in the aforesaid internal control system.

v) a) 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 the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section. b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements entered in the registers maintained under section 301 and exceeding the value of rupees five lakh in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) The Company has discontinued acceptance of public deposits w.e.f. 15.07.1997. In our opinion and according to the information and explanations given to us, the Company has complied with the provision of sections 58A and 58AA of the Companies Act, 1956, and the Companies (Acceptance of Deposits) Rules, 1975 as applicable, with regards to the deposits accepted from the public. As per information and explanations given to us no order under the aforesaid sections has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company.

vii) In our opinion, the Company has internal audit system commensurate with its size and nature of its business.

viii) According to the information and explanations provided by the management, the Company is not engaged in production, processing, manufacturing or mining activities. Hence the provision of section 209(1 )(d) does not apply to the Company. Hence, in our opinion, no comment on maintenance of cost records under section 209(1 )(d) is required.

ix) Statutory and other dues:

a) According to the information and explanations given to us, the Company has been regularly depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax Wealth Tax, Service Tax, Customs Duty and Excise Duty as applicable with the appropriate authorities during the year.

b) According to the information and explanations given, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty were outstanding, as at 31* March, 2012 for a period of more than six months from the date they become payable.

c) According to the records of the Company and the information and explanations given to us, the following are the particulars of dues on account of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess matters that have not been deposited on account of any dispute:

Name of the Statute Nature of Due Amount (Rs.) Forum where Dispute is pending

Uttar Pradesh Sales Tax Due 91,125 Commissioner of Sale Tax Act Appeal Sales Tax

x) The company doesn't have any accumulated losses at the end of the financial year. The Company has not incurred any cash losses during the current financial year but has incurred cash losses of Rs. 43,05,390/- during the immediately preceding financial year

xi) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank during the year.

xii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares during the year, so the requirement of maintenance of adequate documents and records is not applicable.

xiii) In our opinion, and to the best of our information and according to the explanations provided by the management, we are of the opinion that the Company is neither a Chit Fund nor a Nidhi / Mutual benefit society. Hence, in our opinion, the provisions of any special statute as specified under paragraph 4 (xiii) of the Order are not applicable to the Company.

xiv) In our opinion and according to the information and explanation given to us, the Company has maintained proper records of transaction and contracts regarding its dealing as trading in shares, securities, debentures and other investments, and timely entries have been made therein; also the shares, securities, debentures and other investments, have been held by the Company in its own name except of the exemption granted under section 49 of the Companies Act, 1956 or the shares for which the Company held valid transfer forms or which are in the process of transfer in its name and as stated in "note No 10" of the notes on financial statements.

xv) The Company has given guarantees in connection with loan taken by others from banks or financial institutions. In our opinion, the terms and conditions of the guarantees given are not prejudicial to the interest of the Company.

xvi) In our opinion and according to the information and explanation given to us, the term loan obtained by the Company has been applied for the purpose for which it was obtained.

xvii) Based on the information and explanations given to us and an overall examination of balance sheet of the Company, in our opinion, there are no funds raised on a short term basis which have been used for long term investment.

xviii) According to the 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.

xix) According to the information and explanations given to us and the records examined by us, the Company has not issued any debentures during the year.

xx) The Company has not raised any money by public issues during the year.

xxi) 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 year.

ORIENTAL HOUSE For J. S. VANZARA & ASSOCIATES

Suite # 3A, 6C, Elgin Road, 3rdFloor Chartered Accountants

Kolkata - 700 020 FRN.318143E

(CA. Aurobinda Panda)

Partner

Date: 20yhday of July, 2012 Membership No-064888

 
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