Sterling Holiday Financial Services Ltd.
|BSE: 500466||Sector: Financials|
|NSE: N.A.||ISIN Code: N.A.|
|BSE 05:30 | 01 Jan||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
|BSE: 500466||Sector: Financials|
|NSE: N.A.||ISIN Code: N.A.|
|BSE 05:30 | 01 Jan||Stock Is Not Traded.|
|NSE 05:30 | 01 Jan||Stock Is Not Traded.|
To the Members of M/s. Sterling Holiday Financial Services Limited
Report on the Standalone Financial Statements
We have' audited the accompanying standalone financial statements of M/s. STERLINGHOLIDAY FINANCIAL SERVICES LIMITED ("The Company") which comprise of theBalance Sheet as at 31st March 2017 Statement of Profit & Loss and Cash FlowStatement for the year then ended and a summary of significant accounting policies andother explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these standalone financial statements that giye a true and fair viewof the financial position financial' performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring 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.
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 accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In hriaking those risk assessmentsthe auditor considers internal financial control relevant to the Company's preparation ofthe financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances. An audit also includes evaluatingthe appropriateness of the accounting policies used and the reasonableness of theaccounting estimates made by the Company's Directors as well as evaluating the overallpresentation of 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 standalone financial statements.
Basis for Qualified Opinion
1) Note No. 15.2.2 regarding certain advances aggregating to Rs.216.49 lakhs towardsinvestments by way of shares in certain companies including a subsidiary company. In ouropinion the amount is doubtful of recovery and has to be provided for fully. Non Provisionof this amount results in understatement of current year loss and accumulated loss by thesaid amount.
2) Note No.15.2.5 regarding non-provision of diminution in value of investmentsaggregating jo Rs. 185.88 lakhs as on 31st March 2017 in respect of quoted and unquotedinvestments due to which loss for the year and accumulated loss is understated by thesaid amount.
3) Note No.15.2.6 regarding non-availability of confirmation of balances/reconciliationin respect of balances towards hire purchase lease bills intercorporate deposits loansand advances trade receivables certain bank accounts and other liabilities. Adjustmentswhich may arise on confirmation is not ascertainable at this stage and not provided for.The impact of adjustments due to non receipt of confirmation / reconciliation on the lossof the year accumulated losses and on the position of respective Assets and Liabilitiesis not ascertainable at this stage.
4) Note No.15.2.7 regarding provision not made towards certain non-performing advancesaggregating to Rs. 171.59 lakhs due to which loss for the year and accumulated loss isunderstated by the said amount.
5) Note No. 15.3.3 regarding non-provision of interest on deposits due to negotiationwith depositors the amount of interest if any payable is unascertainable at this stageand not provided for. The impact of same on loss for the year and accumulated losses isunascertainable at this stage.
6) In respect of Hire Purchase dues from Thomas Cook (India) Limited by allotment ofHappy Vistas Units and other products of the borrower during earlier year we are unableto express our opinion with regard to classification of the said advance aggregating toRs.642.27 lakhs as performing having regard to the ultimate realization of the investmentsin the absence of required details.
7) The Company has not deposited the amount due to be transferred to InvestorsEducation and Protection Fund amounting to Rs. 1193858/- as detailed in Note No. 4.
Our audit opinion on the financial statements for the year ended March 312016 was alsoqualified in respect of all the above matters.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matters described in the Basis for QualifiedOpinion paragraph the standalone financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:
a) in the case of the Balance Sheet of the state of affairs of the Company as at March312017;
c) in the case of the Cash Flow Statement of the cash flows for the year ended on thatdate.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2015 (The Order") issuedby the Central Government of India in terms of sub-section (11) of Section 143 of the Actwe give in the Annexure-A a statement on the matters specified inparagraphs 3 and 4 of theOrder.
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 purpose of ouraudit.
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.
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 standalone financial statements comply with theAccounting Standards Specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 with the exception of Accounting Standard -13 onAccounting for Investments.
e) On the basis of written representations received from the directors as on 31st March2017 and taken on record by the Board of Directors all the directors are disqualified ason 31st March 2017 from being appointed as a director in terms of Section 164(2) of theAct.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report under Annexure - B; and
g) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audits and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements. Refer Note 15.3.2 and 15.8.1.
ii. The Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There Company has Share Application Money Non Convertible Debentures and FixedDeposits aggregating to Rs.11.94 Lakhs outstanding as at 31.03.2017 which are required tobe transferred to the Investor Education and Protection Fund. However the same has notbeen transferred.
iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the Management - Refer Note: 15.7.
ANNEXURE - A to The Independent Auditor's Report of even date on the StandaloneFinancial Statements of M/s. Sterling Holiday Financial Services Limited.
The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone financial statements for the year ended March 31 2017 were port that:
1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) Fixed assets were physically verified during the year by the management inaccordance with a programme of verification which in our opinion provides for physicalverification of all the fixed assets at reasonable intervals. According to the informationgiven to us no material discrepancies were noticed on such verification.
However no physical verification of leased assets has been carried out by the Companyduring the year under review.
(c) The Company has no immovable properties and accordingly our reporting as to whetherthe title deeds of immovable properties are held in the name of the Company is notapplicable.
2. The Company is not a manufacturing company and no inventories are handled by theCompany. Hence no comment is offered in regard to physical verification of inventoriesprocedures of physical verification of inventories and maintenance of proper records ofinventories.'
3. The Company has given loans to parties covered in the register maintained U/s 189 ofthe Companies Act 2013. The details of loans and advances extended and outstanding as on31.03.2017 are as follows:
The terms of these loans are prejudicial to the interest of the Company as no interestincome is received in respect of these loans and advances entire advances are overdue andno reasonable steps have been taken for recovery of these advances.
The above loafer are outstanding for more than five years and are doubtful of recovery.
4. The Company has not complied with the provisions of Section 185 and 186 of theCompanies Act 2013 in respect of loans investments provided by the Company. As per theinformation made available to us the Company has not provided any guarantee or security toany company covered under Section 185 of the Companies Act.
5. In our opinion and according to the information and explanation given to us theCompany has not complied with the provisions of Section 73 to 76 of the Companies Act2013 and the Rules framed thereunder and the directives issued by Reserve Bank of Indiaand the provisions of Non Banking Financial Companies (Reserve Bank) Directions 1977 andthe Rules framed thereunder in regard to Fixed Deposits accepted by the Company withregard to:
a) Adequate liquid assets required under the Provisions of sub-section (2)of Section45IB of the Reserve Bank of India Act have not been maintained as on 31.03.2017 as perbooks of the Company.
b) The matured deposits have not been fully paid. The Company Law Board SouthernRegion Bench Chennai has by its Order dated 24th December 1998 permitted theCompany to repay the deposits in a phased manner together with interest at 12% p.a fromthe date of maturity to the date of repayment. In the event of not being repaid asspecified in the scheme the Company has to pay overdue interest at 14% p.a from the dateof maturity to the date of repayment. The Company has not adhered to the repaymentschedule directed by the Company Law Board.
6. The Company is not required to maintain cost records under Section 148(1) of theCompanies Act 2013.
7. (a) According to the information and explanations given to us the Company has beenregular in depositing undisputed statutory dues except few cases of delayed remittanceincluding Provident Fund Employees' State Insurance Income Tax Sales Tax Wealth TaxCustoms Duty Excise Duty Cess and any other statutory dues with the appropriateauthorities during the year with exception of Investor Education and ProtectionFund.
(b) According to the information and explanations given to us there are no dues ofSales Tax Income Tax Customs Duty Wealth Tax Excise Duty and Cess which have not beendeposited on account of any dispute with the exception of the following:
8. The Company has in the past defaulted in repayment of loans / borrowings from banksand financial institutions. We were informed that the Company has paid amount due underOne Time Settlement in respect of all the Institutions. In respect of Debenture Holdersthe amount due has been transferred to the Trustees of Debenture Holders. However as on31.03.2017 sums aggregating to Rs.276200/- are due to Debenture Holders apart fromRs.877743/- due to Fixed Deposit Holders.
9. The Company has not raised any moneys by way of initial public offer or furtherpublic offer (including debt instruments) during the year. No term loans have beenborrowed by the Company during the year under review.
10. To the best of our knowledge and according to information and explanations given tous no fraud by the Company or any fraud on the Company by its officers. or employees hasbeen noticed or reported during the year.
11. Paragraph 3(xi) of the Order on managerial remuneration is not applicable since theCompany has not paid managerial remuneration.
12. 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.
13. According to the information and explanations given to us and based on ourexamination of the records of the Company during the year there are no transactions withthe related parties and hence compliance with Sections 177 and 188 of the Act are notapplicable.
14. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
15. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
16. The Company is required to be registered under Section 45-IA of the Reserve Bank ofIndia Act 1934. During the year 2000-2001 Reserve Bank of India had rejected thecertificate of registration given to the Company.
ANNEXURE - B to The Independent Auditor's Report of even date on the StandaloneFinancial Statements of M/s. Sterling Holiday Financial Services Limited.
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 M/s.Sterling Holiday Financial Services Limited ("The Company") as of March 312017 in conjunction with our audit of the Standalone Financial Statements of the Companyfor the year ended on 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 (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
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:
(i) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company:
(ii) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(iii) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.