TO THE MEMBERS OF STARLITE COMPONENTS LIMITED
We have audited the accompanying standalone financial statements of StarliteComponents Ltd.("theCompany") which comprise the Balance Sheet as at 31stMarch 2015 the Statement of profit and Lossthe Cash Flow Statement for the year thenended and a summary of the signi cant accounting policiesand other explanatoryinformation [Company does not have any branches].
Managements Responsibility for the Standalone Financial Statements
The Companys Board of Directorsis responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash ows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspeci ed under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules2014. This responsibility also includes maintenance of adequate accounting recordsinaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate Accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased
on our audit.
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 there under.
We conducted our audit in accordance with the Standards on Auditing speci ed underSection 143(10)of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform theaudit 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 andthe disclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial controls relevant to the Companyspreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimatesmade by the Companys Directors as well as evaluating theoverall presentation of the financial statements.
We believe that the audit evidence we have obtained is suf cient and appropriate toprovide
a basis for our audit opinion on the standalone financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2015 and its pro t/loss and its cash ows for the year ended on thatdate.
Emphasis of Matters
The Company has reversed the provision of diminution on its investment in StarliteLighting Limited and reinstated the value of shares at face value during the year.This isdone in view of the fact that the net worth of the said Company is positive at the end ofF.Y. 2014-15.This has resulted in substantial increase in the pro ts of the company.
Our opinion is not modified in respect of above matters.
The company has made reference to BIFR u/s 15 of the said vide Case No. 59/2005 dated09/02/2005 and was declared sick on 29/09/2006.The BIFR sanctioned scheme ofrehabilitation dated 10th October 2013 is under implementation. The sharewarrants issued to the strategic investor & outside investors amounting to Rs.7.20crores were converted into share capital on 6th July 2015 according to thesanctioned scheme of rehabilitation of BIFR. Similarly preferential allotment to thePromoter group amounting to Rs. 90 lakhs was also done on 6th July 2015according to the sanctioned scheme of rehabilitation of BIFR. For this purpose theauthorized share capital was enhanced from Rs. 9 crores to Rs. 18 crores.
Companys financial year ended on 31st March 2014 covered the period of9 months From 1st July 2013 to 31st march 2014 while the resultsfor F.Y. 2014-15 cover period of 12 months. To that extent previous gures are notcomparable. However for the sake of information under Rule 5 of Companies (Appointment& Remuneration of Managerial Personnel) Rules 2014 as given under Board Report thegures of 12 months period ended on 31st March 2014 are considered to facilitateproper comparison.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by Companies (Auditors Report) Order 2015 (the order) issued byCentral Government of India in terms of sub section (11) of the Section 143 of theCompanies Act 2015 we give in Annexure a statement on the matters speci ed in paragraph 3& 4 of the Order to the extent possible.
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 bestof 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 theCompany so far as it appears from our examination of those books [and proper returnsadequate for the purposes ofour audit have been received from the branches not visited byus.]
c) [The reports on the accounts of the branch of ces of the Company audited underSection 143 (8) ofthe Act by branch auditors have been sent to us and have been properlydealt with by us in preparingthis report.]
d) 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 [and with thereturns received from the branchesnot visited by us].
e) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards speci ed under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
f) Observations or comments on financial transactions or matters which have an adverseeffect on the functioning of the Company No such observations or comments.
g) On the basis of the written representations received from the directors as on 31stMarch 2015 taken on record by the Board of Directors none of the directors is disqualied as on 31stMarch 2015 from being appointed as a director in terms of Section164 (2) of the Act.
h) We do not have any quali cation reservation or adverse remark relating to themaintenance of the accounts & other matters connected there with.
i) The company has adequate internal financial controls system in place and theoperating effectiveness of such controls is satisfactory.
j) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of and according to the explanations given to us:
i. The Company has pending litigations which would impact its financial position.
Following are the details
Appeal against order of Income tax Department for A.Y. 2004-05 pending in High CourtMumbai. Demand raised Rs. 7371366/-
Appeal against orders of Sales tax Department pending with Sales Tax Tribunal forvarious financial years levying interest & penalty on unpaid Sales Tax amount Totaldemand Rs. 61918168/-.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
For HMA & Associates
(Membership No. 034056)
Place of Signature: Pune
ANNEXURE TO INDEPENDENT AUDITORS REPORT
As per Companies (Auditors Report) Order 2015 dt.10 th April 2015.
Referred to in Paragraph 1 under the heading of "Report on other legal ®ulatory requirements" of our report of even date.
Re: -Starlite Components Limited for the F.Y. 2014-15
1. Fixed assets
The Company has maintained proper record showing full particulars includingquantitative details and situation of fixed assets.
The management at the end of the year has physically veri ed the fixed assets and wehave been informed that no material discrepancies were noticed on such verification ascompared to book records.
The inventory has been physically veri ed during the year by the management.
In our opinion the frequency of verification is reasonable.
The procedures of physical verification of inventory followed by the management arereasonable and adequate in relation to size of Company & nature of its business.
The Company is maintaining proper records of the inventory. The discrepancies noticedon verification between physical stock & book records were not material as reported bythe management and the same nave been properly dealt with in the books of accounts.
3. Loans No loans secured or unsecured - have been granted to Companies firms or otherparties listed in the register maintained u/s 189of Companies Act2013. Hence our commentson following matters are not attracted
Whether receipt of principal & interest is regular.
In case overdue amount is more than Rs. 1 lakh whether reasonable steps have beentaken by the Company for recovery of principal & interest.
4. Internal control system - In our opinion & according to the information &explanations given to us there is an adequate internal control system commensurate withthe size of the Company & nature of its business with regard to purchase of inventory& fixed assets & for sale of goods & services. In our opinion & accordingto the information & explanations given to us there is no continuing failure tocorrect major weaknesses in the internal control system.
5. Deposits - The Company has not accepted any deposits from the public. Hence ourcomments on compliance of the directives of Reserve Bank of India provisions of Sec.73 to76 or any other relevant provisions of the Companies Act2013 & the rules framed thereunder are not required. The nature of contravention is not applicable. No order has beenpassed by Company Law Board or National Company Law Tribunal or Reserve Bank of India orany court or any other Tribunal requiring any compliance.
6. Cost records - The Company is not required to maintain cost records pursuant toSection 148(1) of the Companies Act 2013.
7. Statutory dues
According to the information & explanations given to us Company is regular indepositing undisputed statutory dues including Provident Fund Employees StateInsurance Income-tax Sales-tax Wealth Tax Service Tax Custom Duty Excise Duty VATCess and any other statutory dues with appropriate authority during theyear related onlyto the current financial year. Undisputed dues related to previous years which wereoutstanding as at the last day of financial year for a period of more than six months fromdue dateconsist of Provident Fund Rs. 478383/- ESI Rs. 98355/- Profession Tax Rs.60865/- Old BST/CST dues Rs. 1917340/-CST Rs. 16063/- and VAT Rs. 150269481/-.
No such dues of Wealth Tax Service Tax Custom Duty Excise Duty and Cess wereoutstanding on account of any dispute pending with any forum. Demands on account ofdisallowances by Income Tax Department & Interest-penalty levied by Sales TaxDepartment are reported separately in our Audit Report.
No amount was required to be transferred to Investor Education & Protection Fund inaccordance with relevant provisions of Companies Act 1956 (1 of 1956) or Rules madethereunder.
8. Net worth & losses - The Company was registered on 13th of November2011. Hence the Company is registered for a period more than ve years. The Company hasaccumulated losses of Rs. 150548206/- i.e. more than 100% of its net worth and hasearned cash profit of Rs. 4435655/- during the current year and cash loss of Rs.8516775/- in the immediately preceding financial year.
9. Defaults in repayment - The Company has not defaulted in repayment of dues to a Bankor financial institution or debenture holders. Hence it is not necessary to report theperiod & amount of such default.
10. Third party guarantee - The Company has not given any guarantee for loans taken byothers from bank or financial institutions. Hence our comments are not required on whetherthe terms and conditions are prejudicial to the interest of the Company. 11. Utilizationof Term loans - The term loans taken by the Company were applied for the purpose for whichthe loans were obtained.
12. Fraud - No fraud on or by the company has been noticed or reported during the year.
Hence our comments on the nature of fraud and the amount involved are not required.
The reasons for any of our unfavourable or quali ed report/remark are mentioned in therelevant point itself.
For HMA & Associates
M. No. 034056
Place : Pune
Date :30thMay 2015