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Sterling Guaranty & Finance Ltd.

BSE: 508963 Sector: Financials
NSE: N.A. ISIN Code: N.A.
BSE 05:30 | 01 Jan Sterling Guaranty & Finance Ltd
NSE 05:30 | 01 Jan Sterling Guaranty & Finance Ltd

Sterling Guaranty & Finance Ltd. (STERGUARANTY) - Auditors Report

Company auditors report

To the Members of

STERLING GUARANTY & FINANCE LIMITED

Report on the Stand alone Financial Statements

We have audited the accompanying stand alone financial statements of STERLINGGUARANTY & FINANCE LIMITED (‘the Company') which comprise the balance sheetas at 31st March 2017 the statement of profit and loss and the cash flowstatement for the year and a summary of significant accounting policies and otherexplanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act 2013 ("the Act") with respect of the preparation andpresentation 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 withRuleZoftheCompanies(Accounts)Rules2014.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's Responsibility

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 accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder.

We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under Section 143(10) of the Act. Those Standards require that we withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the 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 but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation 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.

Opinion

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:

a) in the case of Balance Sheet of the state of affairs of the company as at 31stMarch2017

b) in the case of the Statement of Profit and Loss of the loss for the year ended onthat date

c) in the case of the Cash Flow Statement of the cash flow for the year ended on thatdate.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")as amended issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A" a statement on thematters specified in the paragraph 3 and 4 of the Order to the extent applicable.

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 and the statement of profit and loss dealt with by this Reportare 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 7of theCompanies (Accounts)Ruies 2014;

(e) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the director isdisqualified as on 31st March 2017 from being appointed as a director in termsof Section 164 (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 to ourseparate report in "Annexure B"

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule11 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) The Company does not have any pending litigation on its financial position.

(ii) The Company did not have any long-term contracts including derivatives 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 incorporated in India.

(h) The company has provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016 these are in accordance with the books of accounts maintainedby the company.

For Vinod S. Mehta & Co.
Chartered Accountants
Firm Reg. No. 111524W
Parag V. Mehta
Place: Mumbai Partner
Date: 29.05.2017 Mem. No. 036867

"Annexure A" to the Independent Auditors' Report

The Annexure referred to in paragraph 1 of our Independent Auditors' Report to themembers of the Company on the standalone financial statements for the year ended 31 March2017 we report that:

(i) The company does not have any fixed assets and hence the reporting requirementscontained in clause 4(i) of the order regarding inventory are not applicable to thecompany.

(ii) The company does not have any inventory and hence the reporting requirementscontained in clause 4(ii) of the order regarding inventory are not applicable to thecompany.

(iii) In our opinion and according to the information and explanations given to us thecompany has not granted any loans to parties covered in the register maintained undersection 189 of the Companies Act 2013 ('the Act'). Accordingly the provisions of Clause3(iii) (a) to (c) of the Order are not applicable to the Company and hence not commentedupon.

(iv) In our opinion and according to the information and explanations given to us thecompany has complied with provisions of section 185 and 186 of the Companies Act 2013 inrespect of loans investments guarantees and security.

(v) The Company has not accepted any deposits from the public. Further as per thedirectives issued by the Reserve Bank of India and the provisions of sections 73 to 76 orany other relevant provisions of the Companies Act and the rules framed there under whereapplicable in this regard have been complied with.

(vi) As per the information and explanation given to us the Central Government has notprescribed the maintenance of cost records under sub-section (I) of section 148 of thecompanies Act 2013.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income taxsales tax wealth tax service tax duty of customs value added tax cess and othermaterial statutory dues have been regularly deposited during the year by the Company withthe appropriate authorities. As explained to us the Company did not have any dues onaccount of duty of excise sales tax duty of customs service tax or any other statutorydues outstanding for more than 6 months.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax wealth tax service tax dutyof customs value added tax cess and other material statutory dues were in arrears as at31 March 2017 for a period of more than six months from the date they became payable.

The Company does not have any loans or borrowings from any financial institutiongovernment or debenture holders during the year. Accordingly paragraph 3(viii)of theOrder is not applicable.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not paid/provided formanagerial remuneration. Accordingly paragraph 3 (xi) of the Order is not applicable.

(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.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv) 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 during the year which is prejudicial to the interest of the company.

(xv) 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 noncashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

(xvi) The Company is a NBFC and is registered under section 45-IA of the Reserve Bankof India Act 1934.

For Vinod S. Mehta & Co.
Chartered Accountants
(Firm Reg. No.111524W)
Parag V. Mehta
Place : Mumbai Partner
Date : 29.05.2017 Membership No: 036867

Annexure - B to the Auditors' Report

Report on the internal Financial Controls under Clause (i) of Sub-section 3 ofSection 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of STERLINGGUARANTY & FINANCE LIMITED ("the Company") as of 31 March 2017 inconjunction with our audit of the standalone financial statements of the Company for theyear 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'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the 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 auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit 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 judgment including the assessment of the risks of materialmisstatement of the financial statements Whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's interna! financial controls system over financialreporting.

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 interna! 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.

Opinion

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 31 March 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 Vinod S. Mehta & Co.
Chartered Accountants
(Firm Reg. No. 111524W)
Parag V. Mehta
Place: Mumbai Partner
Date: 29.05.2017 Membership No: 036867