TO THE MEMBERS OF STARLITE COMPONENTS LIMITED
We have audited the accompanying standalone financial statements of StarliteComponents Limited ("the Company") which comprise the Balance Sheet as at31st March 2017 the Statement of Profit and Loss the Cash Flow Statement for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation.
Management's Responsibility for the Standalone 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 preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance 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 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 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 making those risk assessments theauditor considers 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 the 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 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 2017 and its profit/loss and its cash flows for the year ended on thatdate.
The company had made reference to BIFR u/s 15 of the Sick Industrial Companies (SpecialProvisions) Act 1985 vide Case No. 59/2005 dated 09/02/2005 and was declared sick on29/09/2006.The BIFR sanctioned scheme of rehabilitation dated 10th October 2013is under implementation.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by Companies (Auditor's Report) Order 2016 (the order) issued byCentral Government of India in terms of sub section (11) of the Section 143 of theCompanies Act 2013 we give in Annexure a statement on the matters specified in paragraph3 & 4 of the Order to the extent possible. (Annexure 1)
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
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.
e) Observations or comments on financial transactions or matters which have an adverseeffect on the functioning of the Company-No observation or comment.
f) On the basis of the written representations received from the directors as on 31stMarch 2017taken on record by the Board of Directors none of the directors isdisqualified as on31st March 2017 from being appointed as a director in terms of Section164 (2) of the Act.
g) We do not have any qualification reservation or adverse remark relating to themaintenance of the accounts & other matters connected there with.
h) The company has adequate internal financial controls system in place and theoperating effectiveness of such controls is satisfactory. We give inannexure a report on the same. (Annexure 2)
i) With respect to the other matters to be included in the Auditor's 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 HighCourt - Mumbai. Demand raised Rs. 7371366/-
Appeal against orders of Sales tax Department pending with Sales Tax Tribunalfor various financial years levying interest & penalty on unpaid Sales Tax amount -Total demand Rs. 92813759/-.
The above-mentioned amounts are disclosed as Contingent liability in thefinancial 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 were required to be transferred to the InvestorEducation and Protection Fund by the Company
iv. The company had provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8thNovember2016 to 30thDecember 2016 and these are in accordance with the books ofaccounts maintained by the company
For HMA & Associates
Anand D. Joshi
Membership No. 113805
Place of Signature: Pune
Date: 30th May 2017
ANNEXURE TO INDEPENDENT AUDITORS' REPORT
As per Companies (Auditor's Report) Order. 2016 dt.29th March 2016.
Referred to in Paragraph 1 under the heading of "Report on other legal ®ulatory requirements" of our report of even date.
Re: -Starlite Components Limitedfor the F.Y. 2016-17
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 verified the fixed assetsand we have been informed that no material discrepancies were noticed on such verificationas compared to book records.
The title deeds of immovable properties of Company are held in the name of thecompany.
2. Inventory -
The inventory has been physically verified during the year by the management. Inour opinion the frequency of verification is reasonable.
The Company is maintaining proper records of the inventory. The discrepanciesnoticed on verification between physical stock & book records were not material asreported by the management and the same have been properly dealt with in the books ofaccounts.
3. Loans aranted-
The Company has not granted any secured or unsecured loans to Companies firms LimitedLiability Partnerships or other parties listed in the register maintained u/s 189 ofCompanies Act 2013. Hence our comments on following matters are not attracted -
Whether the terms and conditions of the grant of such loans are not prejudicialto the company's interest;
Whether the schedule of repayment of principal and payment of interest has beenstipulated and
Whether the repayments or receipts are regular;
4. Loans. Investment. Guarantees & Security -
Company has not granted any loans or given guarantees - directly or indirectly -to Directors or any other person in whom Directors are interested in contravention ofSection 185 of Companies Act 2013.
Company has not granted any loan or given guarantee or made investment orprovided security in contravention of Section 186 of Companies Act 2013.
The Company has not accepted any deposits. Hence our comments on compliance ofthe directives of Reserve Bank of India provisions of Sec.73 to 76 or any other relevantprovisions of the Companies Act2013 & the rules framed there under are not required.
The nature of contravention - not applicable.
No order has been passed by Company Law Board or National Company Law Tribunalor Reserve Bank of India or any court or any other Tribunal requiring any compliance.
6. Cost records-
The Company is not required to maintain cost records pursuant to Section 148(1) of theCompanies Act 2013.
7. Statutory dues -
According to the information & explanations given to us Company is regularin depositing 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 the year related onlyto the current financial year.
Undisputed dues related to previous years which were outstanding as at the lastday of financial year for a period of more than six months from due date consist of ESIRs. 98355/- Profession Tax Rs. 60865/- Old BST/CST dues Rs. 1489890/-CST Rs.14750/- VAT Rs. 134890671/- Deferred BST Liability Rs. 251439/- and Deferred CSTliability Rs. 414305/-.
No such dues of Income-tax Sales-tax Service Tax Custom Duty Excise Dutyand VAT were outstanding on account of any dispute pending with any forum. Disputed duesnot provided for in the Books of Accounts are disclosed under Contingent Liabilities.
8. Defaults in reoavment-
The Company has no dues to a Bank or financial institution or debenture holders. Henceit is not necessary to report the period & amount of such default.
9. Utilization of funds-
The Company has not raised funds by way of IPO or any Public offer (includingDebt instrument).
The term loans taken by the Company were applied for the purpose for which theloans were obtained.
No fraud by the company or on the Company by its officers or employees has been noticedor reported during the year. Hence our comments on the nature of fraud and the amountinvolved are not required.
11. Managerial remuneration -
The managerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.
12. Nidhi company -
The Company is not a Nidhi Company & hence our comments related to Nidhi Companyare not attracted.
13. Related party transactions -
All transactions with the related parties are in compliance with sections 177and 188 of Companies Act 2013 wherever applicable and
The details have been disclosed in the Financial Statements as required by AS-18.
14. Preferential allotment & private placement -
The company has not made any private placement or preferential allotment ofshares or fully or partly convertible debentures during the year under review.
Our comments on compliance with the provisions of section 42 of Companies Act2013 are not attracted since no preferential allotment is made during the year.
Our comments on the application of amount raised are not attracted since nopreferential allotment is made.
15. Non-cash transactions with Directors -
The company has not entered into any non-cash transactions with directors orpersons connected with him.
Our comments on compliance with the provisions of section 192 of Companies Act2013 are not attracted.
16. Registration with RBI -
Company is not required to be registered under section 45-IA of the Reserve Bankof India Act 1934 and hence the registration has not been obtained.
For HMA &Associates
FRN - 100537W
Anand D. Joshi
Membership No. - 113805
Place : Pune
Date : 30th May 2017
ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF STARLITE COMPONENTS 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 StarliteComponents Limited as of March 31 2017 in conjunction with our audit of thestandalone financial statements of the Company for 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. 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.
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 ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether adequateinternal financial controls over financial reporting was established and maintained and ifsuch 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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement 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 ofthe 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.
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 satisfactorily 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.
For HMA& ASSOCIATES
FRN - 100537W
Anand D. Joshi
Membership No. - 113805
Date: 30thMay 2017