Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
1. We have audited the accompanying standalone Ind AS financial statements of STI India Limited (âthe Companyâ), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the statement of changes in equity for the year then ended, and a summary of the significant accounting policies and other explanatory information (herein after referred to as âstandalone Ind AS financial statementsâ).
Managementâs Responsibility for the Standalone Ind AS Financial Statements
2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) ofthe Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements, that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind As) specified under Section 133 of the Act, read with relevant rules issued thereunder. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act; safeguarding the assets of the Company; preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditorâs Responsibility
3. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
4. 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 oftheAct and the Rules made there under.
5. 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 standalone Ind AS financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Companyâs preparation of the Standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone IndAS financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements. Opinion
8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 including the Ind AS, of the state of affairs of the Company as at 31 March 2018, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
9. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4 ofthe Order.
10. As required by Section143(3) oftheAct, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c. The Balance sheet, the statement of profit and loss, the statement of cash flow and the statement of changes in equity dealt with by this report are in agreement with the books of account.
d. In our opinion, the aforesaid standalone Ind As financial statements comply with the Indian Accounting Standards (Ind As) specified under Section 133 of the Act, read with relevant rule issued thereunder.
e. On the basis of the written representations received from the directors as on 31st March, 2018 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in terms of Section164(2) of the Act;
f. We have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as of 31 March 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date and our report dated 08.05.2018 as per Annexure II expressed.
g. With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Amendment Rules, 2018, in our opinion and to the best of our information and according to the explanations given to us:
i. As detailed in Note 22 to the standalone Ind AS financial statements, the Company has disclosed the impact of pending litigations on its standalone Ind AS financial statements;
ii. The company does not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection F und by the company.
iv. Attention is also invited to;
Note No.34 in âNotes to Account, regarding the standalone Ind AS financial statements of the Company having been prepared on going concern basis, notwithstanding the fact that its net worth is completely eroded.
Annexure I to the Auditor''s Report even date CARO 2016:
1. In respect of Fixed Assets:
a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
b. The fixed assets have been physically verified by the management at reasonable intervals during the year. We are informed that no material discrepancies were noticed by the management on such verification.
c. The title deeds in respect of all immovable properties are held in the name of the company.
2. In respect of Inventories:
As explained to us physical verification of inventory has been conducted during the year at reasonable intervals by the management and in our opinion and according to the information and explanation given to us, the Company is maintaining proper records of its inventories and no material discrepancies were noticed on physical verification
3. In respect of loans, secured or unsecured granted by the Company to other Companies, firms, LLP or other parties covered in the register maintained under section 189 of the Companies Act, 2013.
a. The terms and conditions of grant of such loans are not prejudicial to the interest of the Company.
b. The repayments of the principal are regular. Loan is given Interest free.
c. The amounts are payable on demand.
4. The Company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 in respect of guarantees given and securities provided. However there is no Loans given and Investments made during the year.
5. During the year the company has not accepted any deposits from public or by any means hence the said clause 3(v) of the said order is not applicable to the Company.
6. As per the information and explanations provided to us, we are of the opinion that in pursuant to the prescribed rules by Central Government, the Company had maintained cost records u/s. 148(1) of the Companies Act, 2013, however we have not done a detailed examination of the same.
7. In respect of Statutory Dues:
(a) According to record of the Company produced before us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employeesââ state insurance, income tax, sales tax, service tax, customs duty, excise duty, cess and other statutory dues applicable to it. According to the information and explanations given, no undisputed amounts payable in respect of Income-Tax, sales tax, service tax, customs duty, excise duty/cess were outstanding as at 31.03.2018 for a period of more than six months from the date they became payable except as given below:
Statement of Arrears of statutory dues outstanding (excluding interest) for more than six months as at 31st March 2018:
Sr. No |
Nature of Dues |
Amount (Rs. in Lacs) |
Period to which amount relates |
1. |
Central Sales Tax |
3.87 |
1995-96 |
2. |
Tax Deducted at Source |
25.41 |
2017-18 |
3. |
Tax Collection at Source |
1.43 |
2017-18 |
4. |
Profession Tax |
0.88 |
2017-18 |
5. |
Provident Fund |
118.49 |
2017-18 |
6. |
ESIC |
10.82 |
2017-18 |
Total |
160.90 |
(b) According to the records of the company there are no dues of Income-Tax, sales tax, wealth tax, service tax, customs duty, excise duty/cess which have not been deposited on account of any dispute except as given below.
Nature of the Act |
Nature of the Dues |
Amount |
Period to which the amount relates |
Forum where dispute is pending |
Central Sales Tax Act, 1956 |
CST |
63.00 |
1995-96 |
Writ Petition filed in M.P High Court |
Central Sales Tax Act, 1956 |
Excise Duty |
27.03 |
September 2004 |
In the High Court of M.P |
Central Sales Tax Act, 1944 |
Excise Duty |
65.49 |
March 2004 to September 2004 |
In the High Court of M.P |
Central Sales Tax Act, 1944 |
Excise Duty |
11.02 |
2007-08 & 2008-09 |
Additional Commissioner of Central Excise Indore |
Income Tax Act, 1961 Tribunal, Indore |
Penalty |
7.00 |
A.Y. 2005-06 |
Income Tax Appellate Tribunal, Indore |
Income Tax Act, 1961 |
Penalty |
0.50 |
A.Y.2016-17 |
CIT(A)-Indore |
Total |
174.04 |
8. As per the information and explanations given to us the company has not taken loans from bank or financial institutions. The company has not defaulted in repayment of dues to debenture holders.
9. During the year the Company has not raised any fund by way of initial public offer or further public offer (including debt instruments) and term loans, therefore no comments under the clause are called for.
10. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.
11. According to the records of the Company, the Managerial Remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
12. 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 not a Nidhi company. Hence, in our opinion the clause does not apply to the company.
13. The Company has disclosed all the transactions with the related parties in the Financial Statements during the year and the transactions are in compliance with sections 177 and 188 of Companies Act, 2013.
14. During the year under consideration, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures, hence comments under this clause are not called for.
15. According to the provisions of section 192 of Companies Act, 2013 the company has not entered into any non-cash transactions with directors or persons connected with him during the year hence no comments under this clause are called for.
16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934, hence this clause is not applicable and no comments under this clause are called for.
Annexure II Independent Auditorâs report on the Internal Financial Controls with references to financial statement & it operating effectiveness under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
1. In conjunction with our audit of the standalone Ind AS financial statements of STI India Limited (âthe Companyâ) as of and for the year ended 31 March 2018, we have audited the internal financial controls over financial reporting (IFCoFR) of the company of as of that date.
Managementâs Responsibility for Internal Financial Controls
2. The Companyâs Board of Directors is responsible for establishing and maintaining internal financial controls based on the criteria being specified by management. These responsibilities include the design, implementation and maintenance of adequate internal financial controls with references to financial statement that were operating effectively for ensuring the orderly and efficient conduct of the companyâs business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on the Companyâs IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India (ICAI) and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of IFCoFR, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate IFCoFR were established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining an understanding of IFCoFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A companyâs IFCoFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone Ind AS financial statements for external purposes in accordance with generally accepted accounting principles including the Ind AS. A companyâs IFCoFR includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and in accordance with generally accepted accounting principles including Ind AS, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the standalone Ind AS financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of IFCoFR, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the IFCoFR to future periods are subject to the risk that IFCoFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2018, based on the criteria being specified by management.
For V.K BESWAL & ASSOCIATES
Chartered Accountants
CA K.V. Beswal
Partner
Place: Mumbai Membership Number-131054
Date: 08th May, 2018 Firm Registration No:101083W
Mar 31, 2016
To,
The Members of STI India Limited
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of STI India Limited (âthe Companyâ), which comprise the Balance Sheet as at 31 â March 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Financial Statements
2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) 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 flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act; safeguarding the assets of the Company; preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.
4. 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.
5. 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 standalone financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Companyâs preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the financial statements.
7. 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
8. 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 31â March 2016, and its profit/loss and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
9. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order.
10. As required by Sectionl43(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c. The standalone financial statements 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 (as amended);
e. On the basis of the written representations received from the directors as on 31" March, 2016 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 â March 2016 from being appointed as a director in terms of Section 64(2) of the Act;
£ We have also audited the internal financial controls over financial reporting (IFCOFR) of the Company as of 31â March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 10* May 2016 as per Annexure II expressed.
g. With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. As detailed in Note 25 to the standalone financial statements, the Company has disclosed the impact of pending litigations on its standalone financial position;
ii. The company does not have any long term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the company.
h. Attention is also invited to;
NoteNo.37in "Notes to Account, regarding the standalone financial statements of the Company having been prepared on going concern basis, notwithstanding the fact that its net worth is completely eroded.
ANNEXURE I TO THE AUDITORâS REPORT EVEN
DATE CARO 2016:
1. In respect of Fixed Assets:
a. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
b. The fixed assets have been physically verified by the management at reasonable intervals during the year. We are informed that no material discrepancies were noticed by the management on such verification.
c. The title deeds in respect of all immovable properties are held in the name of the company.
2. In respect of Inventories:
As explained to us physical verification of inventory has been conducted during the year at reasonable intervals by the management and in our opinion and according to the information and explanation given to us, the Company is maintaining proper records of its inventories and no material discrepancies were noticed on physical verification.
3. In respect of loans, secured or unsecured granted by the Company to other Companies, firms, LLP or other parties covered in the register maintained under section 189 of the Companies Act, 2013.
a. The terms and conditions of grant of such loans are not prejudicial to the interest of the Company.
b. The repayment of the principal are regular. Loan is given Interest free.
c. The amounts are payable on demand.
4. The Company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 in respect of Loans granted during the year. There is no Investments, guarantees and securities taken place during the year.
5. During the year the company has not accepted any deposits from public or by any means hence the said clause 3(v) of the said order is not applicable to the Company.
6. As per the information and explanations provided to us, we are of the opinion that in pursuant to the prescribed rules by Central Government, the Company had maintained cost records u/s. 148(1) (d) of the Companies Act, 2013, however we have not done a detailed examination of the same.
7. In respect of Statutory Dues:
(a) According to record of the Company produced before us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees" state insurance, income tax, sales tax, service tax, customs duty, excise duty, cess and other statutory dues applicable to it. According to the information and explanations given, no undisputed amounts payable in respect of Income-Tax, sales tax, service tax, customs duty, excise duty/cess were outstanding as at 31â March, 2016 for a period of more than six months from the date they became payable except as given below:
Statement of Arrears of statutory dues outstanding for more than six months as at 31â March 2016:
(Rs. in lacs)
S. No. |
Nature of the Dues |
Amount |
Period to which amount relates |
1. |
Central Sales Tax |
3.87 |
1995-96 |
2. |
Central Sales Tax |
12.65 |
1997-98 |
3. |
Entry Tax |
11.40 |
1996-97 |
4. |
Entry Tax |
4.04 |
1997-98 |
5. |
Madhya Pradesh Sales Tax (M.P.S.T) |
8.39 |
1997-98 |
Total |
40.35 |
Outstanding Interest amount on the above dues (S. No 1 to 5) as on if March 2016 is Rs. 94.49 lacs.
(b) According to the records of the company there are no dues of Income-Tax, sales tax, wealth tax, service tax, customs duty, excise duty/cess which have not been deposited on account of any dispute except as given below.
_(Rs.in Lacs)
Nature of the Act |
Nature of the Dues |
Amount |
Period to which the amount relates |
Forum where dispute is pending |
Central Sales Tax Act, 1956 Central Sales Tax Act, 1956 Central Sales Tax Act, 1944 Central Sales Tax Act, 1944 Income Tax Act, 1961 |
CST Excise Duty Excise Duty Excise Duty Income Tax |
63.00 27.03 65.49 11.02 7.00 |
1995-96 September 2004 March 2004 to September 2004 2007-08 & 2008-09 2004-05 |
Writ Petition filed in M.P High Court In the High Court of M,P In the High Court of M.P Additional Commissioner of Central Excise Indore CIT (Appeals) Indore |
Total |
173.54 |
8. As per the information and explanations given to us the company has not taken loans from bank or financial institutions. The company has not defaulted in repayment of dues to debenture holders.
9. During the year the Company has not raised any fund by way of initial public offer or further public offer (including debt instruments) and term loans, therefore no comments under the clause are called for.
10. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.
11. According to the provisions of section 197 read with Schedule V to the Companies Act, 2013, the Company has not paid any Managerial remuneration during the year, hence this clause is not applicable.
12. 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 not a Nidhi company. Hence, in our opinion the clause does not apply to the company.
13. The Company has disclosed all the transactions with the related parties in the Financial Statements during the year and the transactions are in compliance with sections 177 and 188 of Companies Act, 2013.
14. During the year under consideration, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures, hence comments under this clause are not called for.
15. According to the provisions of section 192 of Companies Act, 2013 the company has not entered into any non-cash transactions with directors or persons connected with him during the year hence no comments under this clause are called for.
16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934, hence this clause is not applicable and no comments under this clause are called for.
ANNEXURE H TO THE INDEPENDENT AUDITORâS REPORT OF EVEN DATE.
Independent Auditorâs report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
1. In conjunction with our audit of the standalone financial statements of STI India Limited (âthe Companyâ) as of and for the year ended 31â March 2016, we have audited the internal financial controls over financial reporting (IFCOFR) of the company of as of that date.
Managementâs Responsibility for Internal Financial
Controls
2. The Companyâs Board of Directors is responsible for establishing and maintaining internal financial controls based on the criteria being specified by management. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the companyâs business, including adherence to companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditorsâ Responsibility
3. Our responsibility is to express an opinion on the Company''s IFCOFR based on our audit. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India (ICAI) and deemed to be prescribed under section 143 (10) of the Act, to the extent applicable to an audit of IFCOFR, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate IFCOFR were established and maintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCOFR and their operating effectiveness. Our audit of IFCOFR included obtaining an understanding of IFCOFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs IFCOFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A company''s IFCOFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s IFCOFR includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over
Financial Reporting
7. Because of the inherent limitations of IFC0FR, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the IFCOFR to future periods are subject to the risk that IFCOFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31â March 2016, based on the criteria being specified by management.
For V.K BESWAL & ASSOCIATES
Chartered Accountants
C A K.V. Beswal
Partner
Place: Mumbai Membership Number-131054
Date: lO01 May, 2016 Firm Registration No:101083W
Mar 31, 2015
We have audited the accompanying standalone financial statements of STI
India Limited ("the Company"), which comprises the Balance Sheet as
at March 31, 2015, the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information. Management's
Responsibility for the Standalone Financial Statements.
The Company's Board of Directors is responsible for the matters
stated in Section 134 (5) of the Companies Act, 2013 (" the Act")
with respect to the preparation of these standalone financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
accounting principles generally accepted in India, including the
Accounting Standards specified under section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the act for safeguarding of the assets of the
company for preventing and detecting frauds and other irregularities;
selection and application of appropriate accounting policies; Making
judgments and estimates that are reasonable and prudent; and the
design, implementation and maintenance of adequate internal financial
controls that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatements, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken 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 issued by the
Institute of Chartered Accountants of India, as 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 financial
system over financial reporting and the operating effectiveness of such
controls. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of the accounting
estimates made by the company's Directors, as well as evaluating the
overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the standalone
financial statements.
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:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2015;
(b) In the case of statement of Profit and Loss, of the loss for the
year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015
("the Order") issued by the Central Government of India in terms of
sub- section (11) of section 143 of the Act, we give in the Annexure 1
a statement on the matters specified in paragraphs 3 and 4 of the
Order.
2. As required by section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purpose of our audit;
b) In our opinion proper books of account as required by law have been
kept by the Company so far as it appears from our examination ofthose
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 March 31, 2015, from being
appointed as a director in terms of section 164(2) of the Act;
f) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules,2014, in our opinion and to the best of our information and
according to the explanations given to us;
i) The company has disclosed the impact of pending litigations on its
financial position in its financial statements.
- Refer note 25 & 26 to the financial statements;
ii) The company does not have any long term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii) There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the company.
g) Attention is also invited to;
Note No.38 in "Notes to Account, regarding the standalone financial
statements of the Company having been prepared on going concern basis,
notwithstanding the fact that its net worth is completely eroded.
Annexure to the Auditor's Report even date (Referred to in paragraph
1 thereof)
1. In respect of Fixed Assets:
a) The Company has maintained proper records showing full particulars,
quantitative details and situation of its fixed assets.
b) The fixed assets have been physically verified by the management at
reasonable intervals during the year. We are informed that no material
discrepancies were noticed by the management on such verification.
2. In respect ofInventories:
a) As explained to us physical verification of inventories has been
conducted during the year by the management at reasonable intervals.
b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the company and nature of its business.
c) In our opinion and according to the information and explanation
given to us, the Company is maintaining proper records of its
inventories and no material discrepancies were noticed on physical
verification.
3. In respect of loans, secured or unsecured granted by the Company to
the companies, firms or other parties covered in the register
maintained under Section 189 of the Companies Act, 2013:
a) During the year Company has not granted any loans to parties covered
in the register maintained under Section 189 of the Companies Act,
2013.
b) In view of our comments above, clause 4 (iii) (a), (b) of the said
order is not applicable to the company.
4. 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. Further,
on the basis of our examination of the books and records of the
company, carried out in accordance with the auditing standards
generally accepted in India and according to the information and
explanations given to us, we have neither come across nor have we been
informed of any continuing failure to correct weaknesses in the
aforesaid internal control system
5. According to the information and explanations given to us, the
Company has not accepted any deposits from public.
6. As per the information and explanations provided to us, we are the
opinion that in pursuant to the prescribed rules
by Central Government, the company had maintained cost records u/s.
148(1) (d) of the Companies Act, 2013, however we have not done a
detailed examination of the same.
7. In respect ofStatutory Dues:
(a) According to record of the Company produced before us, the Company
is generally regular in depositing with appropriate authorities
undisputed statutory dues including provident fund, investor education
and protection fund, employees' state insurance, income tax, sales
tax, wealth tax, service tax, customs duty, excise duty, cess and other
statutory dues applicable to it.
(b) According to the information and explanations given, no undisputed
amounts payable in respect of Income-Tax, sales tax, wealth tax,
service tax, customs duty, excise duty/cess were outstanding as at
31.03.2015 for a period of more than six months from the date they
became payable except as given below:-
Statement of Arrears of statutory dues outstanding for more than six
months as at 31st March 2015:
S. Nature ofthe Dues Amount Period to which
No. (Rs. in lacs) amount relates
1 Central Sales Tax 3.87 1995-96
2 Central Sales Tax 12.65 1997-98
3 Entry Tax 11.40 1996-97
4 Entry Tax 4.04 1997-98
5 Madhya Pradesh Sales Tax (M.P.S.T) 8.39 1997-98
Total 40.35
Outstanding Interest amount on the above dues (S. No 1 to 5) as on
31st March 2015 is Rs. 87.21 lacs.
(c) According to the records of the company there are no dues of
Income-Tax, sales tax, wealth tax, service tax, customs duty, excise
duty/cess which have not been deposited on account of any dispute
except as given below.
Nature ofthe Act Nature ofthe Dues Amount Period to which
(Rs. In Lacs) the amount
relates
Central Sales Central Sales Tax 63.00 1995-96
Tax Act,1956
Central Sales Tax Excise Duty 27.43 September
Act,1956 2004
Central Excise Excise Duty 65.49 March 2004 to
Act, 1944 September
2004
Central Excise Excise Duty 11.02 2007-08 &
Act, 1944 2008-09
Income Tax Income Tax 7.00 2004-05
Act, 1961
Total 173.54
Nature od the Act Forum where dispute is pending
Central Sales Tax Act 1956 Writ Petition filed in M.P. High Court.
Central Sales Tax Act 1956 CESTAT, New Delhi
Central Sales Excise Act In the High court of M.P.
1944
Central Sales Excise Act Additional Commissioner of Central
1944 Excise Indore
Income Tax Act 1961 CIT (Appeals), Indore
(d) According to the records of the company there are no amounts to be
transferred to Investor Education & Protection Fund.
8. The accumulated losses of the Company have exceeded fifty percent of
its net worth as at 31/03/2015.The company has incurred cash loss of
Rs.79.10 lacs during the financial year covered by our audit but not in
the immediately preceding financial year.
9. As per the information and explanations given to us the company has
not taken loans from bank or financial institutions. There is no
default in repayment of dues to debenture holders.
10. The company has given Corporate guarantees in connection with loan
taken by holding company from banks. The terms and conditions of the
guarantees given are not prejudicial to the interest of the company.
11. According to the records of the Company, the Company has not
obtained any term loans during the year. Hence, comments under the
clause are not called for.
12. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our
audit.
For V.K. Beswal & Associates
Charted Accountants
Placce: Mumbai CA K. V. Beswal
Partner
Date: 15th May, 2015 Membership No.131054
Mar 31, 2014
Report on the Financial Statements
We have audited the accompanying financial statements of STI India
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 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") 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 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.
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 judgement, 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
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 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 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 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 the Auditor''s Report even date
(Referred to in paragraph 1 thereof)
1. In respect of Fixed Assets:
a) The Company has maintained proper records showing full particulars,
quantitative details and situation of its fixed assets.
b) The fixed assets have been physically verified by the management at
reasonable intervals during the year. We are informed that no material
discrepancies were noticed by the management on such verification.
c) Based on our scrutiny of the records of the company and the
information & explanation received by us, we report that there were
sale of fixed assets during the year but the fixed assets disposed off
did not constitute a substantial part of the fixed assets of the
company.
2. In respect of Inventories:
a) As explained to us physical verification of inventories has been
conducted during the year by the management at reasonable intervals.
b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the company and nature of its business.
c) In our opinion and according to the information and explanation
given to us, the Company is maintaining proper records of its
inventories and no material discrepancies were noticed on physical
verification.
3. In respect of loans, secured or unsecured granted or taken by the
Company to/from the companies, firms or other parties covered in the
register maintained under Section 301 of the companies Act, 1956:
a) During the year Company has not granted any loans to parties covered
in the register maintained under Section 301 of the Companies Act,
1956.
b) In view of our comments above, clause 4 (iii) (b), (c) & (d) of the
said order is not applicable to the company.
c) During the year Company has taken loans from 1 party covered in the
register maintained under Section 301 of the Companies Act, 1956 and
the maximum amount outstanding during the year and the year-end balance
is Rs. 975 lacs.
d) In our opinion and according to the information and explanations
given to us, the terms and conditions, are not prima facie prejudicial
to the interest of the Company.
e) In respect of the said loans, the same are repayable over a period
of 5-7 years.
f) In respect of the said loans there is no overdue amount.
4. 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, for the
purchase of inventory and fixed assets and for the sale of goods and
fixed assets. Further, on the basis of our examination of the books and
records of the company, carried out in accordance with the auditing
standards generally accepted in India and according to the information
and explanations given to us, we have neither come across nor have we
been informed of any continuing failure to correct weaknesses in the
aforesaid internal control system.
5. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
a) In our opinion and according to the information and explanations
given to us the particulars of contracts or arrangements referred to in
Section 301 of the Act have been entered in to the register required to
be maintained under that section.
b) In our opinion and according to the information and explanations
given to us, transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Act and exceeding the value of Rupees Five Lakhs in respect of any
party during the year, have been made at prices, which are prima facie
reasonable having regard to the prevailing market prices at the
relevant time.
6. According to the information and explanations given to us, the
Company has not accepted any deposits from public.
7. In our opinion the Company has an internal audit system
commensurate with the size and nature of its business.
8. As per the information and explanations provided to us, we are the
opinion that in pursuant to the prescribed rules by Central Government,
the company had maintained cost records u/s. 209(1) (d) of the
Companies Act, 1956, however we have not done a detailed examination of
the same.
9. In respect of Statutory Dues:
a) According to record of the Company produced before us, the Company
is generally regular in depositing with appropriate authorities
undisputed statutory dues including provident fund, investor education
and protection fund, employees'' state insurance, income tax, sales tax,
wealth tax, service tax, customs duty, excise duty, cess and other
statutory dues applicable to it.
b) According to the information and explanations given, no undisputed
amounts payable in respect of Income-Tax, sales tax, wealth tax,
service tax, customs duty, excise duty/cess were outstanding as at
31.03.2014 for a period of more than six months from the date they
became payable except as given below:-
Statement of Arrears of statutory dues outstanding for more than six
months as at 31st March 2014:
S. Nature of the Dues Amount Period to which
No. (Rs. in lacs) amount relates
1 Central Sales Tax 3.87 1995-96
2 Central Sales Tax 12.65 1997-98
3 Entry Tax 11.40 1996-97
4 Entry Tax 4.04 1997-98
5 Madhya Pradesh Sales Tax
(M.P.S.T) 8.39 1997-98
Total 40.35
Interest amount on the above dues (S. No 1 to 5) as on 31st March 2014
is Rs. 79.94 lacs.
(c) According to the records of the company there are no dues of
Income-Tax, sales tax, wealth tax, service tax, customs duty, excise
duty/cess which have not been deposited on account of any dispute
except as given below :
Nature of the Act Nature of the Dues Amount
(Rs. In Lacs)
Central Sales Central Sales Tax 63.00
Tax Act,1956
Central Sales Tax Central Sales Tax 1.43
Act,1956
Central Excise Excise Duty 27.03
Act, 1944
Central Excise Excise Duty 65.49
Act, 1944
Central Excise Excise Duty 11.02
Act, 1944
Income Tax Income Tax 7.00
Act, 1961
Total 174.97
Nature of the Act Period to which Forum where dispute is
the amount pending
relates
Central Sales 1995-96 Writ Petition filed in
Tax Act,1956 M.P. High Court.
Central Sales Tax 2004-05 Appeal filed in M.P.
Act,1956 Commercial Tax
Appellate Board
Bhopal
Central Excise September CESTAT, New Delhi
Act, 1944 2004
Central Excise March 2004 In the High court
Act, 1944 to September of M.P
2004
Central Excise 2007-08 & Additional
Act, 1944 2008-09 Commissioner, of
Central Excise
Indore
Income Tax 2004-05 CIT (Appeals)
Act, 1961 Indore
10. The accumulated losses of the Company have exceeded fifty percent
of its net worth as at 31/03/2014.The company has not incurred cash
loss during the financial year covered by our audit and in the
immediately preceding financial year.
11. As per the information and explanations given to us the company
has not obtained any loan from banks & financial institution. Hence,
comments under the clause are not called for.
12. According to the information and explanations given to us the
company has not granted any loans and / or advances on the security by
way of pledge of shares, debentures and other securities.
13. 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 requirements of para 4 (xiii) of
the Order do not apply to the company.
14. As per records of the company and information and explanations
given to us by the management, company is not dealing or trading in
shares, securities, debentures and other investments.
15. The company has given Corporate guarantees in connection with loan
taken by holding company from banks. The terms and conditions of the
guarantees given are not prejudicial to the interest of the company.
16. According to the records of the Company, the Company has not
obtained any term loans during the year. Hence, comments under the
clause are not called for.
17. According to the information and explanations given to us and, on
an overall examination of the balance sheet of the company, we report
that no funds raised on short-term basis have been used for long-term
investment by the company.
18. The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. During the period covered by audit report the company has not
issued any debentures.
20. During the year the company has not raised any money by way of
public issue.
21. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our
audit.
For V.K. Beswal & Associates
Chartered Accountants
CA K.V Beswal
Partner
Place: Mumbai M. No. 131054
Date : 05th May, 2014 Firm Registration No.: 101083W
Mar 31, 2013
We have audited the accompanying financial statements of STI India
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 forthe Finaneial Statements
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. Forming an Opinion
and Repotting on Financial Statements of internal control relevant to
the preparation and presentation of the financial statements that give
a true and fair view and arc 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 judgement, 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 arc appropriate in the circumstances. An audit also
includes evaluating the appropriateness of accounting policies used and
die 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
forthe year ended on that date; and
(e) 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 the directors is disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub- section (I) of
sect ion 274 of the CompaniesAct, 1956.
Annexure to the Auditor's Report even date
(Referred to in paragraph 1 thereof)
1. In respect of Fixed Assets:
a) The Company has maintained proper records showing full particulars,
quantitative details and situation of its fixed assets.
b) The fixed assets have been physically verified by the management at
reasonable intervals during the year. We are informed that no material
discrepancies were noticed by the management on such verification.
c) Based on our scrutiny of the records of the company and the
information & explanation received by us, we report that there were
sale of fixed assets during the year but the fixed assets disposed off
did not constitute a substantial part of the fixed assets of the
company.
2. In respect of Inventories:
a) As explained to us physical verification of inventories has been
conducted during the year by the management at reasonable intervals.
b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the company and nature of its business.
c) In our opinion and according to the information and explanation
given to us, the Company is maintaining proper records of its
inventories and no material discrepancies were noticed on physical
verification.
3. In respect of loans, secured or unsecured granted or taken by the
Company to/from the companies, firms or other parties covered in the
register maintained under Section 301 of the companies Act, 1956:
a) During the year Company has not granted any loans to parties covered
in the register maintained under Section 301 of the Companies Act,
1956.
b) In view of our comments above, clause 4 (iii) (b), (c) & (d) of the
said order is not applicable to the company.
c) During the year Company has taken loans from 1 party covered in the
register maintained under Section 301 of the Companies Act, 1956 and
the maximum amount outstanding during the year is 1975 lacs and the
year-end balance is *975 lacs.
d) In our opinion and according to the information and explanations
given to us, the rate of interest, where applicable and other terms and
conditions, are not prima facie prejudicial to the interest of the
Company.
e) In respect of the said loans, the same are repayable on demand and
there is no repayments schedule.
f) In respect of the said loans, the same are repayable on demand and
therefore the question of overdue amounts docs not arise. In respect of
interest, where applicable there are no overdue amounts.
4. 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, for the
purchase of inventory and fixed assets and for the sale of goods and
fixed assets. Further, on the basis of our examination of the books and
records of the company, carried out in accordance with the auditing
standards generally accepted in India and according to the information
and explanations given to us, we have neither come across nor have we
been informed of any continuing failure to correct weaknesses in the
aforesaid internal control system.
5. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
a) In our opinion and according to the information and explanations
given to us the particulars of contracts or arrangements referred to in
Section 301 of the Act have been entered in to the register required to
be maintained under that section.
b) In our opinion and according to the information and explanations
given to us, transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Act and exceeding the value of Rupees Five Lakhs in respect of any
party during the year, have been made at prices, which are prima facie
reasonable having regard to the prevailing market prices at the
relevant time.
6. According to the information and explanations given to us, the
Company has not accepted any deposits from public.
7. In our opinion the Company has an internal audit system
commensurate with the size and nature of its business.
8. As per the information and explanations provided to us, we
* are the opinion that in pursuant to the prescribed rules by Central
Government, the company had maintained cost records u/s. 209( 1) (d) of
the Companies Act, 1956, however we have not done a detailed
examination of the same.
9. In respect of Statutory Dues:
a) According to record of the Company produced before us, die Company
is generally regular in depositing with appropriate authorities
undisputed statutory dues including provident fund, investor education
and protection Kind, employees' state insurance, income tax, sales tax,
wealth tax, service tax, customs duty, excise duty, cess and other
statutory dues applicable to it.
b) According to the information and explanations given, no undisputed
amounts payable in respect of Income-Tax, sales tax, wealth tax,
service tax, customs duty, excise duty/cess were outstanding as at
31.03.2013 for a period of more than six months from the date they
became payable except as given below:-
Statement of Arrears of statutory dues outstanding for more than six
months as at 31 st March 2013:
S. Nature of the Dues Amount Period to which
No. (Rs in lacs) amount relates
1 Central Sales Tax 3.87 1995-96
2 Central Sales Tax 12.65 1997-98
3 Entry Tax 11.40 1996-97
4 Entry Tax 4.04 1997-98
5 Madhya Pradesh Sales 8.39 1997-98
Tax (M.P.S.T)
Total 40.35
Interest amount on the above dues (S. No 1 to 5) as on 31 st March
2013 is Rs 72.68 lacs.
(c) According to the records of the company there are no dues of
Income-Tax, sales tax, wealth tax, service tax, customs duty, excise
duty/cess which have not been deposited on account of any dispute except
as given below.
Name of the Nature of Use Due Amount
Act (Rs in Lacs
Central Sale Central Sales Tax 63.00
Tax Act, 1956
Central Sale Central Sales Tax 1.43
Tax Act. 1956
Central Excise Excise Duty 27.03
Act, 1944
Central Excise Excise Duty 65.49
Act, 1944
Central Excise Excise Duty 11.02
Act, 1944
Income Tax Income Tax 7.00
Act, 1961
Total 174.97
Name of the Period to which Forum where dispute
Act the amount is Pending
Central Sale 1095-96 Writ Petition filed in
Tax Act, 1956 M.P. I ligh Court.
Central Sale 2004-05 Appeal filed in M.P.
Tax Act. 1956 Commercial Tax
Appellate Board
Bhopal
Central Excise September CESTAT, New Delhi
Act, 1944 2004
Central Excise March 2004 In the High court
Act, 1944 to September of M.P
2004
Central Excise 2007-08 & Additional
Act, 1944 2008-09 Commissioner, of
Central Excise
2004-05 CIT(Appcals)
Income Tax Indore
Act, 1961
Total
10. The accumulated losses of the Company have exceeded fifty percent
of its net worth as at 31.03.2013.The company has not incurred cash
loss during the financial year covered by our audit and in the
immediately preceding financial year.
11. As per the information and explanations given to us the company is
generally regular in making the repayments due to banks & financial
institution and as at March 31, 2013 there is no overdue amount.
12. According to the information and explanations given to us the
company has not granted any loans and / or advances on the security by
way of pledge of shares, debentures and other securities.
13. 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 requirements of para 4 (xiii) of
the Order do not apply to the company.
14. As per records of the company and information and explanations given
to us by the management, company is not dealing or trading in shares,
securities, debentures and other investments.
15. The company has given Corporate guarantees in connection with loan
taken by holding company from banks. The terms and conditions of the
guarantees given are not prejudicial to the interest of the company.
16. According to the records of the Company, the Company has not
obtained any term loans during the year. Hence, comments under the
clause are not called for.
17. According to the information and explanations given to us and, on
an overall examination of the balance sheet of the company, wc report
that no funds raised on short-term basis have been used for long-term
investment by the company.
18. The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. During the period covered by audit report the company has not
issued any debentures.
20. During the year the company has not raised any money by way of
public issue.
21. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our
audit.
ForV. K. Beswal & Associates
Chartered Accountants
CA R. P. Laddha
Partner
Membership No. 48195
Firm Rcgn. No. I0I083W
Mar 31, 2012
We have audited the attached Balance Sheet of STI India Limited as at
31st March, 2012, the Profit and Loss Account and the Cash Flow
Statement of the Company 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 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.
1. As required by the Companies (Auditor's Report) Order, 2003 as
amended issued by the Central Government in terms of sub-Section (4A)
of Section 227 of the Companies Act, 1956. We enclose in the annexure
hereto a Statement on the matters specified in paragraphs 4 and 5 of the
said Order.
2. Further to our comments in the Annexure referred to in paragraph 1
above, 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 purposes 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, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards as referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956.
e) On the basis of written representations received from directors as
on March 31, 2012 and taken on record by the Board of Directors, we
report that none of the Directors are disqualified as on March 31, 2012
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with notes thereon and attached thereto give in the prescribed manner
the information required by the Companies Act, 1956, required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
i) In so far as it relates to the Balance Sheet of the state of affairs
of the Company as at March 31, 2012.
ii) In so far as it relates to the Profit & Loss Account of the PROFIT
of the company for the year ended on that date, and
iii) In so far as it related to the Cash Flow Statement, of the Cash
Flows for the year ended on that date.
1. In respect of Fixed Assets:
a) The Company has maintained proper records showing full particulars,
quantitative details and situation of its fixed assets.
b) The fixed assets have been physically verified by the management at
reasonable intervals during the year. We are informed that no material
discrepancies were noticed by the management on such verification.
c) Based on our scrutiny of the records of the company and the
information & explanation received by us, we report that there were
sale of fixed assets during the year but the fixed assets disposed off
did not constitute a substantial part of the fixed assets of the company.
2. In respect of Inventories:
a) As explained to us physical verification of inventories has been
conducted during the year by the management at reasonable intervals.
b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the company and nature of its business.
c) In our opinion and according to the information and explanation
given to us, the Company is maintaining proper records of its
inventories and no material discrepancies were noticed on physical
verification.
3. In respect of loans, secured or unsecured granted or taken by
the Company to/from the companies, firms or other parties covered in
the register maintained under Section 301 of the companies Act, 1956:
a) During the year Company has not granted any loans to parties covered
in the register maintained under Section 301 of the Companies Act, 1956.
b) In view of our comments above, clause 4 (iii) (b), (c) & (d) of the
said order is not applicable to the company.
c) During the year Company has taken loans from 1 party covered in the
register maintained under Section 301 of the Companies Act, 1956 and
the maximum amount outstanding during the year is Rs 15.90 crores and
the year- end balance is Rs 7.25 crores.
d) In our opinion and according to the information and explanations
given to us, the rate of interest, where applicable and other terms and
conditions, are not prima facie prejudicial to the interest of the
Company.
e) In respect of the said loans, the same are repayable on demand and
there is no repayments schedule.
f) In respect of the said loans, the same are repayable on demand and
therefore the question of overdue amounts does not arise. In respect of
interest, where applicable there are no overdue amounts.
4. 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, for the
purchase of inventory and fixed assets and for the sale of goods and
fixed assets. Further, on the basis of our examination of the books and
records of the company, carried out in accordance with the auditing
standards generally accepted in India and according to the information
and explanations given to us, we have neither come across nor have we
been informed of any continuing failure to correct weaknesses in the
aforesaid internal control system.
5. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
a) In our opinion and according to the information and explanations
given to us the particulars of contracts or arrangements referred to in
Section 301 of the Act have been entered in to the register required to
be maintained under that section.
b) In our opinion and according to the information and explanations
given to us, transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Act and exceeding the value of Rupees Five Lakhs in respect of any
party during the year, have been made at prices, which are prima facie
reasonable having regard to the prevailing market prices at the
relevant time.
6. According to the information and explanations given to us, the
Company has not accepted any deposits from public.
7. In our opinion the Company has an internal audit system
commensurate with the size and nature of its business.
8. As per the information and explanations provided to us, we are the
opinion that in pursuant to the prescribed rules by Central Government,
the company had maintained cost records u/s. 209(1) (d) of the
Companies Act, 1956, however we have not done a detailed examination
of the same.
9. In respect of Statutory Dues:
a) According to record of the Company produced before us, the Company
is generally regular in depositing with appropriate authorities
undisputed statutory dues including provident fund, investor education
and protection fund, employees' state insurance, income tax, sales
tax, wealth tax, service tax, customs duty, excise duty, cess and other
statutory dues applicable to it.
b) According to the information and explanations given, no undisputed
amounts payable in respect of Income-Tax, sales tax, wealth tax,
service tax, customs duty, excise duty/cess were outstanding as at
31.03.2012 for a period of more than six months from the date they
became payable except as given below:-
Statement of Arrears of statutory dues outstanding for more than six
months as at 31st March 2012:
Sl. Nature of the Dues Amount Period to which
No. (Rs in lacs) amount relates
1 Central Sales Tax 3.87 1995-96
2 Central Sales Tax 12.65 1997-98
3 Entry Tax 11.40 1996-97
4 Entry Tax 4.04 1997-98
5 Madhya Pradesh Sales
Tax (M.P.S.T) 8.39 1997-98
Total 40.35 _
Interest amount on the above dues (S. No 1 to 5) as on 31st March 2012
is Rs 65.41 lacs.
(c) According to the records of the company there are no dues of
Income-Tax, sales tax, wealth tax, service tax, customs duty, excise
duty/cess which have not been deposited on account of any dispute
except as given below.
Nature of the Act Nature of the Dues Amount Period to which Forum
where
dispute is
(RsIn Lacs) the amount
pending
relates
Central Sales Central Sales Tax 63.00 1995-96 Writ
Petition
filed in
Tax Act,1956 M.P High
Court.
State Sales Tax State Sales Tax 2.88 1997-98 Writ
Petition
No.
Act 1068 /
2003
pending
before
M.P High
Court
Central Sales Tax Central Sales Tax 1.43 2004-05 Appeal
filed
in M.P.
Act,1956 Commercial
Tax
Appellate
Board
Bhopal
M. P. Vat Vat 0.45 2009-10 Additional
Act, 2002 Commissioner
of
Tax Appeals,
Indore
Central Excise Excise Duty 2129.07 March 2004 Commissioner
of
Act, 1944 to September Customs &
Central
2008 Excise
Central Excise Excise Duty 27.03 September CESTAT,
New Delhi
Act, 1944 2004
Central Excise Excise Duty 65.49 March 2004 In the
High court
Act, 1944 to September of M.P
2004
Central Excise Excise Duty 11.02 2007-08 & Additional
Act, 1944 2008-09 Commissioner,
of
Central Excise
Indore
Income Tax Income Tax 7.00 2004-05 CIT (Appeals)
Act, 1961 Indore
Total 2307.37
10. "In our opinion, the accumulated losses of the Company are more
than its net worth reflecting erosion of its entire net worth". The
company has not incurred cash loss during the financial year covered by
our audit and in the immediately preceding financial year.
11. As per the information and explanations given to us the company is
generally regular in making the repayments due to banks & financial
institution and as at March 31, 2012 there is no overdue amount.
12. According to the information and explanations given to us the
company has not granted any loans and / or advances on the security by
way of pledge of shares, debentures and other securities.
13. 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 requirements of para 4 (xiii) of
the Order do not apply to the company.
14. As per records of the company and information and explanations
given to us by the management, company is not dealing or trading in
shares, securities, debentures and other investments.
15. According to the information and explanations given to us the
company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. According to the records of the Company, the Company has not
obtained any term loans during the year. Hence, comments under the
clause are not called for.
17. According to the information and explanations given to us and, on
an overall examination of the balance sheet of the company, we report
that no funds raised on short-term basis have been used for long-term
investment by the company.
18. The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. During the period covered by audit report the company has not
issued any debentures.
20. During the year the company has not raised any money by way of
public issue.
21. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our
audit.
For V.K. Beswal & Associates
Chartered Accountants
CA R.P. Laddha
Partner
Place: Mumbai M. No. 48195
Date : 04.05.2012 Firm Registration No.: 101083W
Mar 31, 2011
We have audited the attached Balance Sheet of STI India Limited as at
31st March, 2011, the Profit and Loss Account and the Cash Flow
Statement of the Company 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 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.
1. As required by the Companies (Auditor's Report) Order, 2003 as
amended issued by the Central Government in terms of sub-Section (4A)
of Section 227 of the Companies Act, 1956. We enclose in the annexure
hereto a Statement on the matters specified in paragraphs 4 and 5 of
the said Order.
2. Further to our comments in the Annexure referred to in paragraph 1
above, 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 purposes 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, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards as referred to in sub-section (3C) of Section 211 of the
Companies Act, 1956.
e) On the basis of written representations received from directors as
on March 31, 2011 and taken on record by the Board of Directors, we
report that none of the Directors are disqualified as on March 31, 2011
from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Companies Act, 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, the said financial statements together
with notes thereon and attached thereto give in the prescribed manner
the information required by the Companies Act, 1956, required and give
a true and fair view in conformity with the accounting principles
generally accepted in India:
i) In so far as it relates to the Balance Sheet of the state of affairs
of the Company as at March 31, 2011,
ii) In so far as it relates to the Profit & Loss Account of the PROFIT
of the company for the year ended on that date, and
iii) In so far as it related to the Cash Flow Statement, of the Cash
Flows for the year ended on that date.
Annexure to the Auditor's Report even date
(Referred to in paragraph 1 thereof)
1. In respect of Fixed Assets:
a) The Company has maintained proper records showing full particulars,
quantitative details and situation of its fixed assets.
b) The fixed assets have been physically verified by the management at
reasonable intervals during the year. We are informed that no material
discrepancies were noticed by the management on such verification.
c) Based on our scrutiny of the records of the company and the
information & explanation received by us, we report that there were
sale of fixed assets during the year but the fixed assets disposed off
did not constitute a substantial part of the fixed assets of the
company.
2. In respect of Inventories:
a) As explained to us physical verification of inventories has been
conducted during the year by the management at reasonable intervals.
b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the company and nature of its business.
c) In our opinion and according to the information and explanation
given to us, the Company is maintaining proper records of its
inventories and no material discrepancies were noticed on physical
verification.
3. In respect of loans, secured or unsecured granted or taken by the
Company to/from the companies, firms or other parties covered in the
register maintained under Section 301 of the companies Act, 1956:
a) During the year Company has not granted any loans to parties covered
in the register maintained under Section 301 of the Companies Act,
1956.
b) In view of our comments above, clause 4 (iii) (b), (c) & (d) of the
said order is not applicable to the company.
c) During the year Company has taken loans from 2 parties covered in
the register maintained under Section 301 of the Companies Act, 1956
and the maximum amount outstanding during the year is Rs. 23.05 crores
and the year-end balance is Rs 15.90 crores.
d) In our opinion and according to the information and explanations
given to us, the rate of interest, where applicable and other terms and
conditions, are not prima facie prejudicial to the interest of the
Company.
e) In respect of the said loans, the same are repayable on demand and
there is no repayments schedule.
f) In respect of the said loans, the same are repayable on demand and
therefore the question of overdue amounts does not arise. In respect of
interest, where applicable there are no overdue amounts.
4. 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, for the
purchase of inventory and fixed assets and for the sale of goods and
fixed assets. Further, on the basis of our examination of the books and
records of the company, carried out in accordance with the auditing
standards generally accepted in India and according to the information
and explanations given to us, we have neither come across nor have we
been informed of any continuing failure to correct weaknesses in the
aforesaid internal control system.
5. In respect of the contracts or arrangements referred to in Section
301 of the Companies Act, 1956:
a) In our opinion and according to the information and explanations
given to us the particulars of contracts or arrangements referred to in
Section 301 of the Act have been entered in to the register required to
be maintained under that section.
b) In our opinion and according to the information and explanations
given to us, transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Act and exceeding the value of Rupees Five Lakhs in respect of any
party during the year, have been made at prices, which are prima facie
reasonable having regard to the prevailing market prices at the
relevant time.
6. According to the information and explanations given to us, the
Company has not accepted any deposits from public.
7. In our opinion the Company has an internal audit system
commensurate with the size and nature of its business.
8. As per the information and explanations provided to us, we are the
opinion that in pursuant to the prescribed rules by Central Government,
the company had maintained cost records u/s. 209(1) (d) of the
Companies Act, 1956, however we have not done a detailed examination of
the same.
9. In respect of Statutory Dues:
a) According to record of the Company produced before us, the Company
is generally regular in depositing with appropriate authorities
undisputed statutory dues including provident fund, investor education
and protection fund, employees' state insurance, income tax, sales tax,
wealth tax, service tax, customs duty, excise duty, cess and other
statutory dues applicable to it.
b) According to the information and explanations given, no undisputed
amounts payable in respect of Income-Tax, sales tax, wealth tax,
service tax, customs duty, excise duty/cess were outstanding as at
31.03.2011 for a period of more than six months from the date they
became payable except as given below:-
Statement of Arrears of statutory dues outstanding for more than six
months as at 31st March 2011:
S. Nature of the Dues Amount Period to which
No. (Rs. in lacs) amount relates
1 Central Sales Tax 3.87 1995-96
2 Central Sales Tax 12.65 1997-98
3 Entry Tax 11.40 1996-97
4 Entry Tax 4.04 1997-98
5 Madhya Pradesh Sales
Tax (M.P.S.T) 8.39 1997-98
6 Sales tax against
C-form 0.21 2009-10
Total 40.56
Interest amount on the above dues (S.No 1 to 4) as on 31st March 2011
is Rs. 45.30 lacs.
(c) According to the records of the company there are no dues of
Income-Tax, sales tax, wealth tax, service tax, customs duty, excise
duty/cess which have not been deposited on account of any dispute
except as given below.
Nature of the Nature of the Amount Period to Forum where
Act Dues (Rs. In which dispute is
Lacs) the pending
amount
relates
Central Sales Central Sales 66.88 1995-96 Writ Petition
Tax Act,1956 Tax filed in Tax
M.P. High
Court.
State Sales State Sales 11.28 1997-98 Writ Petition
Tax Act Tax No.1068 / 2003
pending before
M.P High Court
Central Sales Central Sales 11.43 2004-05 Appeal filed
Tax Act Tax in M.P.,1956
Commercial Tax
Appellate
Board Bhopal
Central Excise Excise Duty 2129.07 March 2004 Commissioner
Act, 1944 to Septe Customs &
mber Central
2008 Excise
Central Excise Excise Duty 27.03 September CESTAT, New
Act, 1944 2004 Delhi
Central Excise Excise Duty 65.49 March 2004 In the High
Act, 1944 to court of M.P
September
2004
Central Excise Cenvat credit 11.24 October Additional
Act, 1944 Service tax to March Commissioner,
2008 Custom, Centr
al Excise,
Service tax
Indore
Total 2312.42
10. "In our opinion, the accumulated losses of the Company are more
than its net worth reflecting erosion of its entire net worth". The
company has not incurred cash loss during the financial year covered by
our audit and in the immediately preceding financial year.
11. As per the information and explanations given to us the company is
generally regular in making the repayments due to banks & financial
institution and as at March 31, 2011 there is no overdue amount.
12. According to the information and explanations given to us the
company has not granted any loans and / or advances on the security by
way of pledge of shares, debentures and other securities.
13. 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 requirements of para 4 (xiii) of the Order
do not apply to the company.
14. As per records of the company and information and explanations
given to us by the management, company is not dealing or trading in
shares, securities, debentures and other investments.
15. According to the information and explanations given to us the
company has not given any guarantee for loans taken by others from
banks or financial institutions.
16. According to the records of the Company, the Company has not
obtained any term loans during the year. Hence, comments under the
clause are not called for.
17. According to the information and explanations given to us and, on
an overall examination of the balance sheet of the company, we report
that no funds raised on short-term basis have been used for long-term
investment by the company.
18. The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. During the period covered by audit report the company has not
issued any debentures.
20. During the year the company has not raised any money by way of
public issue.
21. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the Company has been noticed or reported during the course of our
audit.
For V. K. Beswal & Associates
Chartered Accountants
CA R. P. Laddha
Partner
Membership No. 48195
Firm Regn. No. 101083W
Place: Mumbai
Date : June 4, 2011
Mar 31, 2010
We have audited the attached Balance Sheet of STI India Limited as at
31st March, 2010, the Profit and Loss Account and the Cash Flow
Statement of the Company for the year ended on that date, both 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.
We 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.
We report that:
1. As required by the Companies (Auditors Report) Order, 2003 as
amended by Companies (Auditors Report) (Amendment) Order 2004
(together the Order) issued by the Central Government in terms of
Section 227(4A) of the Companies Act, 1956 (the "Act"), and on the
basis of such checks as were considered appropriate and according to
the information and explanations given to us, we enclose in the
annexure hereto a Statement on the matters specified in paragraphs 4
and 5 of the said Order.
2. Further to our comments in the Annexure referred to in paragraph 1
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 as referred to in section 211 (3C) of the Companies Act, 1956
except for:
-Non Compliance of Accounting Standards 26 "Intangible Asset" in
respect of amortization of computer software (Ref. Schedule No. 25,
Note No. J 5) and
-Non Compliance of Accounting Standard 1 "Disclosure of Accounting
Policies" in respect of Interest amounting to Rs. 2.41 crores on
delayed payments to suppliers being accounted for on cash basis. (Ref.
Schedule No. 25, Note No. 14).
v) The Company has not redeemed the Optionally Convertible Debentures
Series-2, (which became due on 16th October 2007), Series-1 & 3 (which
became due on OlndAugust 2008) and series 4 (which became due on 16th
October 2008), apparently the provisions of clause (g) of sub- section
(1) of Section 274 of the Companies Act, 1956 are attracted due to such
default. The management is of the firm belief that the default in
redeeming the debentures is merely technical in nature, since economic
ownership of the Optionally Convertible Debentures and Majority
Share-holding of the company are held by the same Investors. Further,
the management has obtained a legal opinion also on the same, according
to which the provisions of clause (g) of sub-section (1) of Section 274
of the Companies Act, 1956 are not applicable due to non obstante
clause contained in provision of section 22 and 32 of Sick Industrial
Company (SpecialProvision) Act, 1985.
Given the legal opinion and views express by the management, we have
refrained from expressing our opinion on the applicability of said
section to the directors of the company.
vi) Attention is drawn to
(a) Note No. 7 of Schedule 25 regarding failure of the company to
redeem the OCDs on its due dates.
(b) Note No. 8 of Schedule 25 regarding transfer of all series of
Optionally Convertible Debentures by the debenture holders to a third
party.
(c) Note No. 9 of Schedule 25 regarding waiver of interest due and
payable on Optionally Convertible Debentures by the debenture holders.
(d) Note No. 10 of Schedule 25 regarding waiver of principal
outstanding amounting to Rs. 28.18 crores by the debenture holders on
the Optionally Convertible Debentures due and payable by the company.
(e) Note No. 12 of Schedule 25 regarding the changes in the Accounting
Policy of valuation of closing stock. As a result of change in the
Accounting Policy, the value of closing stock has decreased by Rs. 14,4
7,399/-.
(f) Note No. 14 of Schedule 25 regarding accounting of Interest
amounting to Rs. 2.41 crores on delayed payments to suppliers on cash
basis.
(g) Note No. 15 of Schedule 25 regarding Non Compliance of Accounting
Standard 26 "Intangible Asset" in respect of amortization of computer
software.
(h) Note No. 18 of Schedule 25 regarding non- provision of Wealth tax
liability in the books of accounts.
(i) Point No. 9(b) of the report annexed regarding tax liability
amounting Rs. 40.77 lacs outstanding for a period of more than six
months.
*(j) Point No. 10 of the report annexed regarding the accumulated
losses of the Company exceeding its net worth reflecting erosion of
entire net worth.
(k) Point no. 11 of the report annexed regarding default to the extent
Rs. 141 crores in respect of Optionally Convertible Debentures (all
series).
(l) Point no. 21 of the report annexed regarding certain financial
transactions read with point no. 19 of the notes to accounts.
cumulatively resulting in overstatement of loss for the year byRs.
14.47 lacs.
vii)Subject to our comments in paragraph 2(vi) above, in our opinion,
and to the best of our information and according to the explanations
given to us, the said accounts read together with the Notes appearing
in Schedule 25, 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 accented in India.
a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2010; and
b) In the case of the Profit and Loss Account, of the loss for the year
ended on that date.
c) In the case of Cash Flows Statement, of the cash flows for the year
ended on that date.
ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 1 of our
report of even date to the members of STI India Limited for the year
ended 31st March, 2010)
1. a) The Company has maintained proper records showing particulars,
quantitative details and situation of its fixed assets.
b) The company has a programme of physical verification of its fixed
assets which, in our opinion, is reasonable having regard to the size
of the company and the nature of its assets. Management has physically
verified the fixed assets according to the programme and no
discrepancies have been noticed on such verification as compared to
book records.
c) The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and as such the disposal, has not affected the going concern status of
the Company.
2. a) The inventory has been physically verified by the management
during the year. In our opinion, the frequency of such verification is
reasonable having regard to the nature of business and particular
circumstances.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
c) In our opinion and information and explanation given to us, the
company has maintained proper records of inventories and no material
discrepancies were noticed on physical verification.
3. a) According to the information and explanations given to us the
company during the year, the company has taken unsecured loans from two
companies covered in the register to be maintained under section 301 of
the Companies Act, 1956. The maximum amount involved during the year
was Rs.87 lacs and the year-end balance of loan taken from such party
was Nil.
b) In our opinion, the rate of interest and other terms and conditions
of loan taken from companies, firms or other parties listed in the
register maintained under section 301 of the Companies Act, 1956 are
not prima facie, prejudicial to the interest of the company.
c) In respect of the aforesaid loans, the company is regular in
repaying the principal amounts as stipulated, where applicable and has
been regular in the payment of interest.
d) According to the information and explanations given to us the
company during the year has not granted any loans, secured or
unsecured, to/from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
Accordingly, the provisions of clauses 4(iii) (b) to (d) of the Order
are not applicable.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control systems commensurate
with the size of the company and nature of its business with regard to
purchases of inventory, fixed assets and with regard to the sale of
goods. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in internal controls
system of the company.
5. a) As explained to us, there are no contracts or arrangements that
need to be entered into the register maintained under Section 301 of
the Companies Act, 1956. b) According to the information and
explanations given to us, there are no transactions made in pursuance
of contracts or arrangements required to be entered in the register
maintained under Section 301 of the Companies Act, 1956.
6. The company has not accepted any deposits from the Public within
the meaning of section 58A & 58AA of the Companies Act, 1956 and rules
framed thereunder.
7. In our opinion, the Company has an internal audit system,
commensurate with the size and nature of its business.
8. We have broadly reviewed the books of accounts relating to
material, labour and other items of cost maintained by the company
pursuant to the Rules made by Central Government for the maintenance of
cost records under section 209(l)(d) of the Companies Act, 1956 and we
are of the opinion that prima facie the prescribed accounts & records
have been made and maintained.
9. (a) According to the information and explanations given to us and
the records of the company examined by us, in our opinion, undisputed
statutory dues including provident fund, investor education and
protection fund, employees state insurance, income tax, sales tax,
wealth tax, service tax, customs duty, excise duty, cess and other
statutory dues have been generally regularly deposited with the
appropriate authorities.
(b) According to the information and explanations given to us and the
records of the company examined by us, no undisputed amounts, except
the fallowings payable in respect of income tax, sales tax, wealth tax,
service tax, customs duty, excise duty and cess, were in arrear as at
31.03.2010 for a period of more than six months from the date they
became payable.
Statement of Arrears of statutory dues outstanding for more than six
months as at 31st March 2010:
S. Nature of the Dues Amount Period to which
No. (Rs. in lacs) amount relates
1 Central Sales Tax 3.87 1995-96
2 Central Sales Tax 12.65 1997-98
3 Entry Tax 11.40 1996-97
4 Entry Tax 4.04 1997-98
5 Madhya Pradesh Sales Tax (M.P.S.T) 8.39 1997-98
6 Sales tax against C-form 0.42 2009-10
Total 40.77
Interest amount on the above dues (S.No I to 4) as on 31st March
2010isRs. 39.55lacs.
(c) According to the information & explanation given to us, the
following statutory dues of the company have not been deposited on
account of disputes:
Nature of the Nature of the Dues Amount (Rs. In Lacs)
Central Sales Central Sales Tax 66.88
Tax Act.1956
State Sales Tax State Sales Tax 11.28
Act
Central Sales Tax Central Sales Tax 1.43
Act,1956
Central Excise Excise Duty 2129.07
Act, 1944
Central Excise Excise Duty 27.03
Act, 1944
Central Excise Excise Duty 65.49
Act, 1944
Central Excise Cenvat credit of 11.24
Act, 1944 Service tax
Name of the Period to which Forum where dispute is
the amount pending
relates
Central Sales
Tax Act.1956 1995-96 Writ Petition filed in
MP. High Court.
State Sales Tax
Act 1997-98 Writ Petition No.
1068/ 2003 pending
before M.P High
Court
Central Sales Tax
Act,1956 2004-05 Appeal filed in M.P.
Commercial Tax
Appellate Board
Bhopal
Central Excise
Act, 1944 March 2004 Commissioner of
to September Customs & Central
2008 Excise
Central Excise
Act, 1944 September CESTAT, New Delhi
2004
Central Excise
Act, 1944 March 2004 In the High court
to September of M.P
2004
Central Excise
Act, 1944 October 2005 Additional
to March Commissioner,
2008 Custom, Central
Excise, Service tax
Indore
10. "In our opinion, the accumulated losses of the Company are more
than its net worth reflecting erosion of its entire net worth". During
the current financial year the company has not incurred cash losses.
However, during the immediately preceding financial year, to the
current financial year, the company has incurred cash losses.
11. According to the records of the company examined by us and the
information and explanation given to us, the company has defaulted in
repayment of dues to debenture holders.
In respect of Optionally Convertible Debentures (all series) amounting
to Rs. 141 crores, the company has defaulted in redemption of such
debentures falling due on or before 16- 10-2008, the detail of such are
given below. However, post balance sheet date, in the month of October,
2010, the debenture holders have waived the principal amounting to Rs.
28.18 crores and outstanding interest due to them payable by the
company and thereafter transferred these OCDs to a third party. The
company has also defaulted in payment of interest thereon, however,
post balance sheet, the debenture holders have also waived the interest
due thereon.
Date of OCD Series Amount Date of
allotment (Rs in Crores) maturity
02-02-07 OCD 1 22.90 02-08-08
16-04-07 OCD 2 13.00 16-10-07
02-02-07 OCD 3 5.10 02-08-08
16-04-07 OCD 4 100.00 16-10-08
141.00
12 Based on our examination of the records and the information &
explanations given to us, the company has not granted any loans and /
or advances on the security by way of pledge of shares, debentures and
other securities. Accordingly, the provisions clause 4 (xii) of the
order are not applicable.
13. In our opinion, the provisions of clause 4(xiii) of the order are
not applicable to the company, as the company is not a chit fund
company or nidhi / mutual benefit fund / society.
14. In our opinion, the company is not dealing in or trading in
shares, securities, debentures and other investments. Accordingly, the
provisions of clause 4(xiv) of the order are not applicable to the
company.
15. According to the information and explanations given to us, during
the year the company has not given any guarantee for loans taken by
others from banks and financial institutions.
16. In our opinion, and according to the information and explanations
given to us, the company has not taken any term loan during the year.
17. According to the information and explanations given to us, and on
an overall examination of the balance sheet of the company, we report
that no funds raised on short term basis have been used for long term
investments.
18. The company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under Section
301 of the Act during the year.
19. During the year the company has not issued any debentures.
20. The Company has not raised any money by public issues during the
year.
21. During the course of our examination of the books and records of
the company, carried out in accordance with generally accepted auditing
practices in India, we have read with point no. 19 of the notes to
accounts neither come across any instance of fraud on or by the
company, noticed or reported during the year, nor have we been informed
of such cases by the management.
For Vikas Kochhar & Associates
Firm Registration No.: 014536N
Chartered Accountants
Vikas Kochhar
Partner
M. No. 87054
Place: New Delhi
Date: 25th November, 2010