THE MEMBERS OF STERLING GREENWOODS LIMITED
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the standalone financial statements of STERLINGGREENWOODS LIMITED ("the Company") which comprise the Balance Sheet as at31st March 2021 and the statement of Profit and Loss Cash Flow Statement for the yearthen ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid 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 31/03/2021 and its Loss and other comprehensive income changes inequity and cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Companies Act 2013. Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Financial Statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion on standalone financialstatements.
Emphasis of Matters
We draw attention to Note No.28.2.1 of the Standalone FinancialStatement which describes the management assessment of uncertainties related to COVID-19pandemic and its consequential impact including the recoverability of assets andoperations of the Company
1) Regarding pending NCLT and other legal litigation by and against theCompany we draw attention to Note No. 28.2 of the standalone financial statements asinformed and explained the matters are subjudice and in absence of that we are unable toopine in respect of financial or other impact there on if any.
Our report is not modified in respect of these matters.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. For each matter below our description of how our audit addressed thematter is provided in that context.
|The Key Audit Matter ||How our audit addressed the key audit matter |
|A. Valuation of Inventories. ||We obtained assurance over the appropriateness of the management's assumptions applied in calculating the value of the inventories and related provisions by:- |
|Refer to note 1.6 to the financial statements. As described in the accounting policies in note 1.6 to the financial statements inventories are carried at the lower of cost and net realizable value. As a result the management applies judgment in determining the appropriate provisions for obsolete stock based upon a detailed analysis of old inventory net realizable value below cost based upon future plans for sale of inventory. ||1. Completing a walkthrough of the inventory valuation process and assessed the design and implementation of the key controls addressing the risk. |
| ||2. Verifying the effectiveness of key inventory controls operating over inventories; including sample based physical verification. |
| ||3. Verifying for a sample of individual products that costs have been correctly recorded. |
| ||4. Comparing the net realizable value to the cost price of inventories to check for completeness of the associated provision. |
|B. Valuation and existence of Non-Current and Current Investments ||Our audit procedures over the valuation of the Investments included agreeing the fair valuation of all Investments held at March 31 2021 to the Net Assets Value provided by the respective Equity Shares. |
|Valuation and existence of Non-Current and Current Investments designated at fair value through profit or loss are valued at 123.61 lakh and classified as level 3 financial instruments in the fair value hierarchy. Further disclosures on the Investments are included in note 29.14 to the financial statements. This was an area of focus for our audit and the area where significant audit effort was directed. As at March 31 2021 the Investments are in Equity Shares of Unquoted. ||Our Observation: |
| ||Based on the audit procedures performed we are satisfied with valuation and existence of non-current and current investment. |
|C. ||Principal Audit Procedures: |
|To ensure accuracy of recognition measurement presentation and disclosures of revenues and related accounts. ||We have assessed the Company's internal control surrounding its revenue transactions We tested the key controls identified. We performed substantive detail testing by selecting sample revenue transactions that we considered appropriate to test the evidence of effectiveness of the internal controls and adherence to accounting policies in recognizing the revenue and the rebates and discounts there against. |
|D. ||Principal Audit Procedures: |
|Evaluation of uncertain Tax positions the Company has uncertain Tax positions including matter under dispute which involve significant judgment to determine the possible outcome of these disputes. ||Obtained details of computed tax assessments demand and appeal there against as at 31st March 2021. Review the management's underlying assumptions in estimating the Tax provisions and the possible outcome of the disputes based on legal and other precedent in evaluating management's position on this uncertain tax position. |
The standalone financial statements of the Company for the year ended31st March 2020 were audited by another auditor who expressed an unmodifiedopinion on those statements on 26th June 2020.
Other Information (or another title if appropriate such as"Information Other than the Standalone Financial Statements and Auditors' ReportThereon")
The Company's management and Board of Directors are responsible for theother information. The other information comprises the information included in theCompany's annual report but does not include the financial statements and our auditors'report thereon.
Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information; we are required to report that fact. We have nothing to report inthis regard.
Responsibility of Management for Financial Statements
The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Companies Act
2013 with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position and financialperformance of the Company in accordance with the accounting principles generally acceptedin India including the Accounting Standards specified under Section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
Those Board of Directors are also responsible for overseeing thecompany's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the company has adequate internal financial controls system in placeand the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ('theOrder') issued by the Central Government of India in terms of sub section 11 of section143 of the companies Act 2013 in Our opinion and according to the information andexplanation given to us the details of the said Order specified in paragraph 3 and 4 ofthe order are given to the extent applicable in Annexure A to this Report.
2. As required by Section 143 (3) of the Act we report that:
(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss (includingOther Comprehensive Income) the Statement of Cash Flows and Statement of Changes inEquity dealt with by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
(e) On the basis of the written representations received from thedirectors as on 31/03/2021 taken on record by the Board of Directors none of thedirectors is disqualified as 31/03/2021 from being appointed as a director in termsof Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlswe give report of the same in Annexure B to this Report.
(g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of Section 197(16) of the Act as amended: Inour opinion and to the best of our information and according to the explanations given tous the remuneration paid by the Company to its directors during the year is in accordancewith the provisions of section 197 of the Act..
(h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements as stated in Note No. 28.1 and 28.2.
ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts.
iii. There has not been an occasion in case of the Company during theyear under report to transfer any sums to the Investor Education and Protection Fund bythe Company. The question of delay in transferring such sums does not arise.
ANNEXURE A TO THE INDEPENDENT AUDITORS'S REPORT
(Referred to in paragraph 1 under Report on Other Legal andRegulatory Requirements' of the Independent auditor's report of even dateto the members of the Sterling Greenwoods Limited on the financial statement forthe year ended 31st March 2021)
We report that:
(i) In respect of Property Plant and Equipment.
(a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets except resorts assets whichrequires Up-dation.
(b) As per information and explanation given to us the physicalverification of its fixed assets have been carried out by the management at the end ofyear which in our opinion is reasonable having regard to the size of the company and thenature of its assets. As per the information and explanation given to us no discrepancieshave been noticed by the management on the fixed assets other than the resort's assets.The reconciliation of the renovated resort assets are in progress and in absence of thefinal out put we are unable to comment on resort assets. We have been informed that thediscrepancies if any will be dealt in the books of accounts on completion ofreconciliation.
(c) According to the Information and explanation given to us and therecords examined by us as disclosed in Note No. 2 and based on the examination of theregistered sale deed/purchase deed/ allotment letters
- Allotment Certificate share certificate etc. provided to us wereport that the title deed comprising immovable properties of lands and acquiredbuildings which are freehold except land valuing Rs. 2242400/
- and property valuing Rs. 278344/- are held in the name of thecompany as at the balance sheet date. Further possession of property valuing Rs.278344/- is not with the Company.
(ii) In respect of Inventories as per the information and explanationgiven to us the inventories have been physical verified by the management at the end ofthe year which in our opinion is reasonable having regard to the size of the company andthe nature of its activity. As per the information and explanation given to us no materialdiscrepancies noticed on physical verification.
(iii) In respect of Loans and Advances Granted during the year.
a) The Company has granted loans to its subsidiary company covered inthe register maintained under section 189 of the Companies Act 2013 ('the Act').
b) In the case of the loans granted to its subsidiary company listed inthe register maintained under section 189 of the Act is not prejudicial to the Company'sinterest the loans have been granted is interest free further there in no stipulationfor repayment of the loans granted hence the question of regular in the payment of theinterest is not relevant. The terms of arrangements do not stipulate any repaymentschedule and the loans are repayable on demand. Accordingly paragraph 3(iii) (b) of theOrder is not applicable to the Company in respect of repayment of the principal amount.
c) Since there is no stipulation in repayment of principal there areno overdue amounts of more than ninety days in respect of the loans granted to itssubsidiary company listed in the register maintained under section 189 of the Act.
(iv) In our opinion and according to the information and explanationsgiven to us the Company has complied with the provision of Section 185 and 186 of thecompanies Act 2013 in respect of grant of loans making investments. However the Companyhas not provided any guarantees and securities.
(v) In our opinion and according to the information and explanationgiven to us the company has complied with the provisions of section 73 to section 76 andother relevant provisions of the Companies Act 2013 and Companies (Acceptance of Deposits) Rules 2014 with regard to the deposits accepted from the members and the public.
(vi) As per the information and explanation provided to us the companyis not required to maintain the cost records as per the provisions of Companies (CostRecords and Audit) Rules 2014 hence Clause (vi) of the Companies (Auditor's Report)order 2015 are not applicable.
(vii) In respect of Statutory Dues
According to the information and explanation given to us in respect ofstatutory dues:
(a) The Company has generally been regular in depositing undisputedstatutory dues including Provident
Fund Investor education and protection fund Employees' stateInsurance income tax Vat/Sales Tax GST Service Tax Custom Duty Excise duty Cess andany other material statutory dues applicable to it with the appropriate authorities.
(b) According to information and explanation given to us no undisputedamounts payable in respect of the aforesaid dues were outstanding as at March 31 2021 fora period of more than six months from the date of becoming payable.
(c) Details of dues of Income Tax and Service Tax which have not beendeposited as on March 31 2021 on account of disputes are given below:
|Name of the Statue ||Nature of Dues ||Year ||Amount ||Forum where dispute is pending |
|Service Tax ||Service Tax Penalty ||2004-05 to 08-09 ||2307073 ||Appellate Tribunal |
|Service Tax ||Service Tax ||2004-05 to 08-09 ||1128073 ||Appellate Tribunal |
(viii) In our opinion and according to the information and explanationgiven to us the Company has not defaulted in the repayment of loans or borrowings tofinancial institutions banks and government and des to the debenture holders.
(ix) In our opinion and according to the information and explanationsgiven to us the term loans have been applied by the Company during the year for thepurpose for which they are raised. The Company has not raised moneys by way of initialpublic offer or further public offer (including debt instruments).
(x) To the best of our knowledge and according to the information andexplanations given to us no fraud by the Company has been noticed or reported during theyear. As regard to fraud on the Company by its officers or employees it has been noticedand reported that the Resort Manager has misappropriated an amount of Rs. 16.85 Lacsduring the preceding year. The balance outstanding as on 31st March 2021 isRs. 16.36 Lacs.(P.Y. Rs.16.36)( Refer Note 28.2(c) )
(xi) In our opinion and according to the information and explanationsgiven to us the Company has paid / provided managerial remuneration in accordance withthe requisite approvals mandated by the provisions of section 197 read with Schedule V tothe Companies Act 2013.
(xii) The Company is not a Nidhi Company and hence reporting underclause (xii) of the CARO 2016 Order is not applicable.
(xiii) In our opinion and according to the information and explanationsgiven to us the Company is in compliance with Section 177 and 188 of the Companies Act2013 where applicable for all transactions with the related parties and the details ofrelated party transactions have been disclosed in the financial statements etc. asrequired by the applicable accounting standards.
(xiv) During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures andreporting under clause (xiv) of CARO 2016 Order is not applicable to the Company.
(xv) In our opinion and according to the information and explanationsgiven to us during the year the Company has not entered into any non cash transactionswith its directors or directors of the holding subsidiary or associate company asapplicable or persons connected with them and hence provisions of section 192 of theCompanies Act 2013 are not applicable.
(xvi) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.
Annexure - B'
To the Independent Auditors' Report to the members of SterlingGreenwoods Limited for the year ended 31st March 2021 on the standalonefinancial statements
(Referred to in paragraph 2(F) under Report on Other Legal andRegulatory Requirements section of our report of even date)
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over standalonefinancial reporting of Sterling Greenwood Limited as at 31st March 2021 inconjunction with our audit of the Ind AS 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 andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India ('ICAI').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act2013.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under Section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of theCompany; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the Company's assets thatcould have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31st March 2021 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by the Institute ofChartered Accountants of India.
| ||FOR KEYUR BAVISHI & CO. |
| ||(Chartered Accountants) |
| ||F.R.N. : 131191W |
| ||(CA KEYUR D. BAVISHI) |
| ||Proprietor |
|Date : 29th June2021 ||M. No.: 136571 |
|Place : Ahmedabad ||UDIN: 21136571AAAADI9499 |