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Auditor Report of Sterling Guaranty & Finance Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of Sterling Guaranty & Finance Limited, 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:

The Company''s 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 Standards notified under 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 133of the Companies Act, 2013 ("the Act") and In accordance with accounting principles generally accepted In India. 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, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal 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.

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 aforesaid 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, 2014;

b) In the case of the Profit and Loss Account, of the profit/ 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, 2003 (the Order) Issued by the Central Government of India In terms of sub-section (4A) of section 227 (4A) 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 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 notified under 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;

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 March 31, 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 AUDITORS'' REPORT

Referred to in paragraph 3 of our report of even date,

(i) (a)The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. All the fixed Assets are written off / fully provided for and hence eliminated from the Books of Accounts.

(b) All the assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off substantial part of the plant and machinery.

(ii) (a) The company does not have any inventory at the year end. However, 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) The Company has neither granted or taken any loans to & from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

Therefore the provisions of clause 4 (iii) (b) to (g) of the Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

(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 purchases of inventory, fixed assets and with regard to the sale of goods & services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 during the year have been made at prices which are reasonable having regard to prevailing market prices, wherever possible and made available for verification, at the relevant time.

(vi) The Company has not accepted any deposits from the public. No order 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.

(vii) The Company has no formal Internal Audit System.

(viii) The Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for any of the products of the Company.

(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31st March 2014 for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us, there are no dues of sale tax, income tax, customs duty, wealth tax, service tax, excise duty and cess which have not been deposited on account of any dispute except the following disputed amounts in respect of income tax.

Statement of Disputed Dues

Name of the Nature of Amount Period to which Forum where Statue Dues the amount dispute is relates pending

Income Tax Act, 1961 Income Tax 2,781/- A.Y. 2000-01 Rectification pending with Assessing Officer

(x) In our opinion, the accumulated losses of the company are more than fifty percent of its net worth. The company has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, during the year under report the Company has not defaulted in repayment of dues to bank as per settlement arrived with the banks. The Company does not have borrowings by way of Debentures.

(xii) According to the information and explanations given to us and records produced before us, the Company has not granted 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 benefit fund /society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xiv) The Company has maintained proper records of transactions & contracts in respect of trading in Shares, Securities, Debentures & other Investments and timely entries have been made. All the shares, securities, debentures & other investments have been held by the Company in its own name except to the extent of the exemptions granted under section 49 of the Companies Act, 1956.

(xv) According to the information and explanation given to us & records produced before us, the company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) During the year under review, the Company has not taken any term loan.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company and after placing reliance on the assumptions made by the company, we are of the opinion that, prima facie, the funds raised on short-term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, during the year under report, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the company had not issued any debentures and hence the question of creating securities or charge in respect thereof does not arise.

(xx) The Company has not raised any money by way of public Issue during the year under review.

(xxi) Based on the audit procedures performed and on the basis of the Information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Vinod S. Mehta& Co. Place: Mumbai Chartered Accounts Date : 30th May 2014 (Firm Reg. No. 111524W) Girish L. Shethia Partner Membership No: 44607


Mar 31, 2013

We have audited the accompanying financial statements of Sterling Guaranty & Finance Limited, 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:

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 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.

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 March 31, 2013;

b) in the case of the Profit and Loss Account, of the profit/ 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.

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 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 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 sthepditectors is disqualified 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 AUDITORS'' REPORT

Re: STERLING GUARANTY & FINANCE LIMITED Year Ended 31st March 2013

Referred to in paragraph 3 of our report of even date,

(i) (a)The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. All the fixed Assets are written off/ fully provided for and hence eliminated from the Books of Accounts.

(b) All the assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off substantial part of the plant and machinery.

(ii) (a) The company does not have any inventory at the year end. However, 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) The Company has neither granted or taken any loans to & from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

Therefore the provisions of clause 4 (iii) (b) to (g) of the Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

(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 purchases of inventory, fixed assets and with regard to the sale of goods & services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

( b ) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 during the year have been made at prices which are reasonable having regard to prevailing market prices, wherever possible and made available for verification, at the relevant time.

(vi) The Company has not accepted any deposits from the public. No order 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.

(vii) The Company has no formal Internal Audit System.

(viii) The Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for any of the products of the Company.

(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31st March 2013 for a period of more than six months from the datethey became payable.

(c) According to the information and explanation given to us, there are no dues of sale tax, income tax, customs duty, wealth tax, service tax, excise duty and cess which have not been deposited on account of any dispute except the following disputed amounts in respect of income tax. Statement of Disputed Dues

Name of Nature of Amount Period to which Forum whercdispute the Dues the amount is pending relates Statue

Income Tax Income 2,781/- A.Y. 2000-01 Rectification pending Act, 1961 Tax with Assessing Officer

(x) In our opinion, the accumulated losses of the company are more than fifty percent of its net worth. The company has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, during the year under report the Company has not defaulted in repayment of dues to bank as per settlement arrived with the banks. The Company does not have borrowings by way of Debentures.

(xii) According to the information and explanations given to us and records produced before us, the Company has not granted 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 benefit fund /society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xiv) The Company has maintained proper records of transactions & contracts in respect of trading in Shares, Securities, Debentures & other Investments and timely entries have been made. All the shares, securities, debentures & other investments have been held by the Company in its own name except to the extent of the exemptions granted under section 49 of the Companies Act,

(xv) According to the information and explanation given to us & records produced before us, the company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) During the year under review, the Company has not taken any term loan.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company and after placing reliance on the assumptions made by the company, we are of the opinion that, prima facie, the funds raised on short-term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, during the year under report, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the company had not issued any debentures and hence the question of creating securities or charge in respect thereof does not arise.

(xx) The Company has not raised any money by way of public issue during the year under review.

(xxi) Based on the audit procedures performed and on the basis of the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Vinod S. Mehta &

Chartered Accouarants

Place: Mumbai

Date: 30.05.2013 Girish L. Shethiafe

Partner

Membership No: 36865


Mar 31, 2012

1. We have audited the attached Balance Sheet of STERLING GUARANTY & FINANCE LIMITED as at 31st March 2012 the Profit and Loss Account and also 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.

2. We conducted our audit in accordance with the 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.

3. 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 enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. 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;

(iii) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account ;

(iv) In our opinion, the balance sheet, profit and loss account 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 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, 1956, 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 31st March 2012;

(b) in the case of the profit 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 flows for the year ended on that date.

ANNEXURE TO AUDITORS'' REPORT

Re: STERLING GUARANTY & FINANCE LIMITED Year Ended 31st March 2012

Referred to in paragraph 3 of our report of even date,

(i) (a)The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. All the fixed Assets are written off / fully provided for and hence eliminated from the Books of Accounts.

(b) All the assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off substantial part of the plant and machinery.

(ii) (a) The company does not have any inventory at the year end. However, 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) The Company has neither granted or taken any loans to & from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

Therefore the provisions of clause 4 (iii) (b) to (g) of the Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

(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 purchases of inventory, fixed assets and with regard to the sale of goods & services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

( b ) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 during the year have been made at prices which are reasonable having regard to prevailing market prices, wherever possible and made available for verification, at the relevant time.

(vi) The Company has not accepted any deposits from the public. No order 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.

(vii) The Company has no formal Internal Audit System.

(viii) The Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for any of the products of the Company.

(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31st March 2012 for a period of more than six months from the date they became payable.

(x) In our opinion, the accumulated losses of the company are more than fifty percent of its net worth. The company has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, during the year under report the Company has not defaulted in repayment of dues to bank as per settlement arrived with the banks. The Company does not have borrowings by way of Debentures.

(xii) According to the information and explanations given to us and records produced before us, the Company has not granted 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 benefit fund /society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xiv) The Company has maintained proper records of transactions & contracts in respect of trading in Shares, Securities, Debentures & other Investments and timely entries have been made. All the shares, securities, debentures & other investments have been held by the Company in its own name except to the extent of the exemptions granted under section 49 of the Companies Act, 1956.

(xv) According to the information and explanation given to us & records produced before us, the company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) During the year under review, the Company has not taken any term loan.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company and after placing reliance on the assumptions made by the company, we are of the opinion that, prima facie, the funds raised on short-term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, during the year under report, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the company had not issued any debentures and hence the question of creating securities or charge in respect thereof does not arise.

(xx) The Company has not raised any money by way of public issue during the year under review.

(xxi) Based on the audit procedures performed and on the basis of the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Vinod S. Mehta & Co.

Chartered Accountants

(Firm Reg. No. 111524W) Place: Mumbai

Date: 25.05.2012 Parag V Mehta

Partner

Membership No: 36867


Mar 31, 2011

1. We have audited the attached Balance Sheet of STERLING GUARANTY & FINANCE LIMITED as at 31st March 2011 the Profit and Loss Account and also 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.

2. We conducted our audit in accordance with the 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.

3. 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 enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. 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;

(iii) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account ;

(iv) In our opinion, the balance sheet, profit and loss account 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 written representations received from the directors, as on 31st March 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2011 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, 1956, 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 31st March 2011;

(b) in the case of the profit 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 flows for the year ended on that date.

ANNEXURE TO AUDITORS' REPORT

Re: STERLING GUARANTY & FINANCE LIMITED Year Ended 31st March 2011

Referred to in paragraph 3 of our report of even date,

(i) (a)The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. All the fixed Assets are written off / fully provided for and hence eliminated from the Books of Accounts.

(b) All the assets have not been physically verified by the management

during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off substantial part of the plant and machinery.

(ii) (a) The company does not have any inventory at the year end. However, 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) The Company has neither granted or taken any loans to & from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Therefore the provisions of clause 4 (iii) (b) to (g) of the Companies (Auditor's Report) Order 2003 are not applicable to the Company.

(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 purchases of inventory, fixed assets and with regard to the sale of goods & services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

( b ) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 during the year have been made at prices which are reasonable having regard to prevailing market prices, wherever possible and made available for verification, at the relevant time.

(vi) The Company has not accepted any deposits from the public. No order 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.

(vii) The Company has no formal Internal Audit System.

(viii) The Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for any of the products of the Company.

(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31st March 2011 for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us, there are no dues of sale tax, income tax, customs duty, wealth tax, service tax, excise duty and cess which have not been deposited on account of any dispute except the following disputed amounts in respect of income tax.

Statement of Disputed Dues

Name of Nature of Amount Period to which Forum where dispute the Dues the amount is pending relates Statue

Income Tax Income 2781 A.Y. 2000-01 Rectification pending Act, 1961 Tax with Assessing Officer

(x) In our opinion, the accumulated losses of the company are more than fifty percent of its net worth. The company has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, during the year under report the Company has not defaulted in repayment of dues to bank as per settlement arrived with the banks. The Company does not have borrowings by way of Debentures.

(xii) According to the information and explanations given to us and records produced before us, the Company has not granted 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 benefit fund /society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xiv) The Company has maintained proper records of transactions & contracts in respect of trading in Shares, Securities, Debentures & other Investments and timely entries have been made. All the shares, securities, debentures & other investments have been held by the Company in its own name except to the extent of the exemptions granted under section 49 of the Companies Act, 1956.

(xv) According to the information and explanation given to us & records produced before us, the company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) During the year under review, the Company has not taken any term loan.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company and after placing reliance on the assumptions made by the company, we are of the opinion that, prima facie, the funds raised on short-term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, during the year under report, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the company had not issued any debentures and hence the question of creating securities or charge in respect thereof does not arise.

(xx) The Company has not raised any money by way of public issue during the year under review.

(xxi) Based on the audit procedures performed and on the basis of the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.



For Vinod S. Mehta & Co. Chartered Accountants

(Firm Reg. No. 111524W)

Place : Mumbai

Date : 30.05.2011

Parag V Mehta

Partner

Membership No: 36867


Mar 31, 2010

1. We have audited the attached Balance Sheet of STERLING GUARANTY & FINANCE LIMITED as at 31st March 2010 the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the 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.

3. As required by the Companies (Auditors 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 enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. 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;

(iii) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the balance sheet, profit and loss account 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 written representations received from the directors, as on 31s1 March 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2010 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, 1956, 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 31st March 2010;

(b) in the case of the profit 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 flows for the year ended on that date.



ANNEXURE TO AUDITORS REPORT



Re : STERLING GUARANTY & FINANCE LIMITED Year Ended 31st March 2010

Referred to in paragraph 3 of our report of even date,

(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. All the fixed Assets are written off/ fully provided for and hence eliminated from the Books of Accounts.

(b) All the assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off substantial part of the plant and machinery.

(ii) (a) The company does not have any inventory at the year end. However, 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) The Company has neither granted or taken any loans to & from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Therefore the provisions of clause 4 (iii) (b) to (g) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(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 purchases of inventory, fixed assets and with regard to the sale of goods & services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 during the year have been made at prices which are reasonable having regard to prevailing market prices, wherever possible and made available for verification, at the relevant time.

(vi) The Company has not accepted any deposits from the public. No order 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.

(vii) The Company has no formal Internal Audit System.

(viii) The Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 for any of the products of the Company.

(ix) (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31st March 2010 for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us, there are no dues of sale tax, income tax, customs duty, wealth tax, service tax, excise duty and cess which have not been deposited on account of any dispute except the following disputed amounts in respect of income tax.

Statement of Disputed Dues

Name of the Nature of Amount Period to Forum where which the dispute is Statue Dues amount relates pending

Income Tax Act, Income Tax 2781 A.Y. 2000-01 Rectification pending with 1961 Assessing Officer

(x) In our opinion, the accumulated losses of the company are more than fifty percent of its net worth. The company has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, during the year under report the Company has not defaulted in repayment of dues to bank as per settlement arrived with the banks. The Company does not have borrowings by way of Debentures.

(xii) According to the information and explanations given to us and records produced before us, the Company has not granted 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 benefit fund /society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xiv) The Company has maintained proper records of transactions & contracts in respect of trading in Shares, Securities, Debentures & other Investments and timely entries have been made. All the shares, securities, debentures & other investments have been held by the Company in its own name except to the extent of the exemptions granted under section 49 of the Companies Act, 1956.

(xv) According to the information and explanation given to us & records produced before us, the company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) During the year under review, the Company has not taken any term loan.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company and after placing reliance on the assumptions made by the company, we are of the opinion that, prima facie, the funds raised on short-term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, during the year under report, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

(xix) According to the information and explanations given to us, during the period covered by our audit report, the company had not issued any debentures and hence the question of creating securities or charge in respect thereof does not arise.

(xx) The Company has not raised any money by way of public issue during the year under review.

(xxi) Based on the audit procedures performed and on the basis of the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Vinod S. Mehta & Co.

Chartered Accountants

(Firm Reg. No. 111524W)

Place: Mumbai

Date : 21-07-2010 Parag V. Mehta

Partner

Membership No: 36867

 
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