The Members of STI India Limited
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of STI IndiaLimited (the Company) which comprise the Balance Sheet as at 31st March2016 the Statement of Profit and Loss the Cash Flow Statement for the year then endedand a summary of the significant accounting policies and other explanatory information.
Managements Responsibility for the Standalone Financial Statements
2. The Companys Board of Directors is responsible for the matters stated inSection 134(5) of the Companies Act 2013 (the Act) with respect to thepreparation of these standalone financial statements that give a true and fair view ofthe financial position financial performance and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014 (as amended). This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act; safeguarding theassets of the Company; preventing and detecting frauds and other irregularities; selectionand application of appropriate accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial 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.
3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
4. 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.
5. 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 standalone financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amountsand the 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 estimates made by the Companys Directors as well as evaluating theoverall presentation of the financial statements.
7. 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.
8. 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 2016 and its profit/loss and its cash flows for the year ended on thatdate.
Report on Other Legal and Regulatory Requirements
9. As required by the Companies (Auditors Report) Order 2016 (theOrder) issued by the Central Government of India in terms of Section 143(11) of theAct we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4of the Order.
10. As required by Sectionl43(3)ofthe Act wereport 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 it appears from our examination of those books.
c. The standalone financial statements dealt with by this report are in agreement withthe 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 (as amended);
e. On the basis of the written representations received from the directors as on 31stMarch 2016 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in terms of Sectionl64(2) of the Act;
f We have also audited the internal financial controls over financial reporting(IFCoFR) of the Company as of 31st March 2016 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport dated 10* May 2016 as per Annexure II expressed.
g. 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 our information and according to the explanations given to us:
i. As detailed in Note 25 to the standalone financial statements the Company hasdisclosed the impact of pending litigations on its standalone financial position;
ii. The company does not have any long term contracts including derivative contractsfor which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the company.
h. Attention is also invited to;
NoteNo.37in "Notes to Account regarding the standalone financial statements ofthe Company having been prepared on going concern basis notwithstanding the fact that itsnet worth is completely eroded.
For V.K BESWAL & ASSOCIATES
CA K.V. Beswal
Membership Numberl31054 Firm Registration No:101083W
Date: 10 May2016
ANNEXURE I TO THE AUDITORS REPORT EVEN
DATE CARO 2016:
a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b. The fixed assets have been physically verified by the management at reasonableintervals during the year. We are informed that no material discrepancies were noticed bythe management on such verification.
c. The title deeds in respect of all immovable properties are held in the name of thecompany.
2. In respect of Inventories:
As explained to us physical verification of inventory has been conducted during theyear at reasonable intervals by the management and in our opinion and according to theinformation and explanation given to us the Company is maintaining proper records of itsinventories and no material discrepancies were noticed on physical verification.
3. In respect of loans secured or unsecured granted hy the Company to other Companiesfirms LLP or other parties covered in the register maintained under section 189 of theCompanies Act 2013.
a. The terms and conditions of grant of such loans are not prejudicial to the interestof 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 CompaniesAct 2013 in respect of Loans granted during the year. There is no Investments guaranteesand securities taken place during the year.
5. During the year the company has not accepted any deposits from public or by anymeans 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 thatin pursuant to the prescribed rules by Central Government the Company had maintained costrecords u/s. 148(1) (d) of the Companies Act 2013 however we have not done a detailedexamination of the same.
7. In respect of Statutory Dues:
(a) According to record of the Company produced before us the Company is generallyregular in depositing with appropriate authorities undisputed statutory dues includingprovident fund investor education and protection fund employees" state insuranceincome tax sales tax service tax customs duty excise duty cess and other statutorydues applicable to it. According to the information and explanations given no
undisputed amounts payable in respect of Income-Tax sales tax service tax customsduty excise duty/cess were outstanding as at 31st March 2016 for a period of more thansix months from the date they became payable excpt as given below:
Statement of Arrears of statutory dues outstanding for more than six months as at 31stMarch 2016:
|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 I to 5) as on 31"March2016isRs. 94.49lacs.
(b) According to the records of the company there are no dues of Income-Tax sales taxwealth tax service tax customs duty excise duty/cess which have not been deposited onaccount of any dispute except as given below.
|Nature of the Act ||Nature of the Dues ||Amount ||Period to which the amount ||Forum where dispute is pending |
| || || ||relates || |
|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 Total ||Income Tax ||7.00 173.54 ||2004-05 ||CIT (Appeals) Indore |
8. As per the information and explanations given to us the company has not taken loansfrom bank or financial institutions. The company has not defaulted in repayment of dues todebenture holders.
9. During the year the Company has not raised any fund by way of initial public offeror further public offer (including debt instruments) and term loans therefore no commentsunder the clause are called for.
10. Based upon the audit procedures performed and information and explanations given bythe management we report that no fraud on or by the Company has been noticed or reportedduring the course of our audit.
11. According to the provisions of section 197 read with Schedule V to the CompaniesAct 2013 the Company has not paid any Managerial remuneration during the year hencethis clause is not applicable.
12. In our opinion and to the best of our information and according to the explanationsprovided 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 theFinancial Statements during the year and the transactions are in compliance with sections177 and 188 of Companies Act 2013.
14. During the year under consideration the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures hencecomments under this clause are not called for.
15. According to the provisions of section 192 of Companies Act 2013 the company hasnot entered into any non-cash transactions with directors or persons connected with himduring the year hence no comments under this clause are called for.
16. The Company is not required to be registered under section 45-LA of the ReserveBank of India Act 1934 hence this clause is not applicable and no comments under thisclause are called for.
| ||For V.K BESWAL & ASSOCIATES |
| ||Chartered Accountants |
| ||CA K.V. Beswal |
| ||Partner |
|Place: Mumbai ||Membership Number-131054 |
|Date: 10 May 2016 ||Firm Registration No:101083W |
ANNEXURE H TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE.
Independent Auditors report on the Internal Financial Controls under Clause (i)of Sub-section 3 of Section 143 of the Companies Act 2013 (the Act)
1. In conjunction with our audit of the standalone financial statements of STI IndiaLimited (the Company) as of and for the year ended 31st March 2016 we haveaudited the internal financial controls over financial reporting (IFCoFR) of the companyof as of that date.
Managements Responsibility for Internal Financial Controls
2. The Companys Board of Directors is responsible for establishing andmaintaining internal financial controls based on the criteria being specified bymanagement. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of the companys business including adherence tocompanys policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
3. Our responsibility is to express an opinion on the Company's IFCoFR based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India (ICAI) and deemed to be prescribed undersection 143 (10) of the Act to the extent applicable to an audit of IFCoFR and theGuidance Note on Audit of Internal Financial Controls Over Financial
Reporting (the Guidance Note) issued by the ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate IFCoFR were established andmaintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining anunderstanding of IFCoFR assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditors judgement includingthe assessment of the risks of material misstatement of the financial statements whetherdue to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Companys IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A company's IFCoFR is a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company'sIFCoFR 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
7. Because of the inherent limitations of IFCoFR including the possibility of collusionor improper management override of controls material misstatements due to error or fraudmay occur and not be detected. Also projections of any evaluation of the IFCoFR to futureperiods are subject to the risk that IFCoFR may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.
8. In our opinion the Company has in all material respects adequate internalfinancial controls over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31st March 2016 based on thecriteria being specified by management.
| ||For V.K BESWAL & ASSOCIATES |
| ||Chartered Accountants |
| ||CAK.V. Beswal |
| ||Partner |
|Place: Mumbai ||Membership Number-131054 |
|Date: 101 May 2016 ||Firm Registration No:101083W |