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Starcom Information Technology Ltd.

BSE: 531616 Sector: IT
NSE: N.A. ISIN Code: INE347I01010
BSE LIVE 14:39 | 15 Nov Stock Is Not Traded.
NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 182.90
PREVIOUS CLOSE 190.00
VOLUME 150
52-Week high 388.00
52-Week low 182.90
P/E 1406.92
Mkt Cap.(Rs cr) 91
Buy Price 181.00
Buy Qty 150.00
Sell Price 182.90
Sell Qty 150.00
OPEN 182.90
CLOSE 190.00
VOLUME 150
52-Week high 388.00
52-Week low 182.90
P/E 1406.92
Mkt Cap.(Rs cr) 91
Buy Price 181.00
Buy Qty 150.00
Sell Price 182.90
Sell Qty 150.00

Starcom Information Technology Ltd. (STARCOMINFO) - Auditors Report

Company auditors report

To the Members of

Starcom Information Technology Limited Report on the Financial Statements

We have audited the accompanying financial statements of Starcom InformationTechnology Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2016 the Statement of Profit and Loss and Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company's Board of Directors are responsible for the matters stated in Section134(5) of the Companies Act 2013 ('the act') with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Act read with rule 7 of Companies (Accounts) Rules 2014. This responsibilityincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that are operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand 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 ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2016 its profit and its 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 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters Specifiedin paragraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Act we further report that:

a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as appears from our examination of those books;

c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;

d) In our opinion the aforesaid financial statements comply with the applicableAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

e) On the basis of written representations received from the directors as on March312016 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2016 from being appointed as a director in terms of Section164(2) of the Act;

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer ourseparate report in Annexure B"; and

g) In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements (Refer note no. 29 of the Financial Statements)

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

iii. There were no amounts which was required to be transferred to the InvestorEducation and Protection Fund by the Company.

For S G C O & Co.

Chartered Accountants

Firm Reg. No 112081W

Sd/-

Suresh Murarka

Partner

Mem. No. 044739

Place: Mumbai

Date: 30th May 2016

Annexure "A" to the Independent Auditor’s Report

Annexure referred to in Paragraph 1 of "Report on Other Legal and RegulatoryRequirements" of our Independent Auditor's Report of even date to the members of StarcomInformation Technology Limited ("the company") on the financial statementsfor the year ended 31st March 2016.

As required by the Companies (Auditors Report) Order 2016 and according to theinformation and explanations given to us during the course of the audit and on the basisof such checks of the books and records as were considered appropriate we report that:

(i) a) The company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.

b) As explained to us the fixed assets have been physically verified by the managementin accordance with a phased programme of verification which in our opinion is reasonableconsidering the size of the Company and the nature of its assets. In accordance with thisprogram certain fixed assets were verified during the year. The frequency of verificationis reasonable and no discrepancies have been noticed on such physical verification.

c) According to the information and explanations given to us the company does not holdany immoveable property.

(ii) The inventories have been physically verified by the Management during the year atreasonable intervals. Discrepancies noticed on physical verification of inventories ascompare to books of records were not material and have been properly dealt with the booksof accounts.

(iii) a) During the year the Company has not granted any loans whether secured orunsecured to any parties covered in the register maintained under section 189 of theCompanies Act 2013. Hence paragraph 3 (iii) (a) (b) and (c) of the Order are notapplicable to the Company.

(iv) In our opinion and according to the information and explanation given to ussection 185 and section 186 of the Companies Act 2013 is not applicable since theCompany has neither granted any loan nor invested in any securities or given anyguarantees during the year under review.

(v) According to the information and explanations given to us and on the basis of ourexamination of records the Company has not accepted any deposits from public within theprovision of section 73 to 76 of the Act and ruled framed there under.

(vi) The Central Government has not prescribed for the maintenance of cost record underSection 148(1) of the Act.

(vii) a) According to the records of the Company amount deducted/accrued in the booksof accounts in respect of the undisputed statutory dues including Provident FundEmployee's State Insurance Income tax Sales tax Service tax Duty of Customs Duty ofExcise Value Added Tax Cess and other Statutory Dues to the extent applicable to theCompany have not been regularly deposited with the appropriate authorities.Undisputed amounts payable in respects thereof which were outstanding as at 31stMarch 2016 for a period more than six months from the date they became payable are asfollows:

Name of the Statue Nature of dues Amount (Rs)
The Income Tax Act 1961 Tax Deduction at Source (TDS) 6610276
Finance Act1994 Service Tax 1402169
The Employee's Provident fund and Miscellaneous Provisions Act 1952 Provident Fund 1983656

b) According to the information and explanations given to us there are no dues withrespect to Income Tax Sales Tax Service Tax Duty of Custom Duty of Excise and ValueAdded Tax which have not been deposited on account of dispute.

(viii) In our opinion and according to information and explanation given to us theCompany had defaulted in repayment of temporary overdraft facility from The Jammu andKashmir Bank Limited which was classified as NPA by the Bank in the previous year.However during the year the account was settled by the Company with the Bank and entireamount as settled has been paid. The Company has not issued any debentures during the yearunder review.

(ix) The company has neither raised money by way of initial public offer nor hasobtained any term loan during the year. Therefore paragraph 3(ix) of the Order is notapplicable to the Company.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with generally accepted auditing practices in India andaccording to information and explanation given to us we have neither come across anyinstance of fraud by the Company or any fraud on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such instances bythe management.

(xi) According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not paid / provided for anymanagerial remuneration. Hence paragraph 3(xi) of the Order is not applicable to thecompany.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3 (xii) of the Order is notapplicable to the Company.

(xiii) According to the information and explanation given to us and based on ourexamination of the records of the Company all transactions entered into by the Companywith the related parties are in compliance with section 177 and 188 of Companies Act 2013wherever applicable and the details have been disclosed in the financial statements asrequired by the applicable accounting standards.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures

during the year under the review. Therefore paragraph 3(xiv) of the Order is notapplicable to the Company.

(xv) According to the information and explanation given to us and based on ourexamination of the records of the Company the

Company has not entered into any non-cash transactions with the directors or personsconnected with him during the year under review. Accordingly paragraph 3 (xv) of theOrder is not applicable to the Company.

(xvi) In our opinion and according to the information and explanation given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.

For S G C O & Co.

Chartered Accountants

Firm Reg. No 112081W

Sd/-

Suresh Murarka

Partner

Mem. No. 044739

Place: Mumbai

Date: 30th May 2016

Annexure "B" to the Independent Auditor’s Report of even date on thefinancial statements of Starcom Information Technology Limited for the year ended 31stMarch 2016.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of StarcomInformation Technology Limited ("the Company") as of March 31 2016 inconjunction with our audit of the financial statements of the Company for the year endedon that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that We comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Qualified Opinion

According to the information and explanation given to us and based on our audit thefollowing material weakness has been identified in the operating effectiveness of theCompany's internal financial controls over financial reporting as at 31st March 2016:

The documentation in respect of specific policies and procedures and the IT Controlspertaining to internal financial controls over financial reporting are not adequate andneeds to be further strengthened. This may potentially result in the risk of overriding ofthese controls and misstatement in recording of transaction.

A "material weakness" is a deficiency or a combination of deficiencies ininternal control over financial reporting such that there is a reasonable possibilitythat a material misstatement of the Company's annual or interim financial statements willnot be prevented or detected on a timely basis.

In our opinion except for the possible effect of the material weakness described aboveon the achievement of the objectives of the control Criteria the Company has in allmaterial respects an adequate internal financial controls system over financial reportingand such internal financial controls over financial reporting were operating effectivelyas at March 31 2016 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India.

We have considered the material weaknesses identified and reported above in determiningthe nature timing and audit tests applied in our audit of the financial statements of theCompany and these material weaknesses above does not affect our opinion on the financialstatements of the Company.

For S G C O & Co.

Chartered Accountants

Firm Reg. No 112081W

Sd/-

Suresh Murarka

Partner

Mem. No. 044739

Place: Mumbai

Date: 30th May 2016