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Sterling Tools Ltd.

BSE: 530759 Sector: Engineering
NSE: STERTOOLS ISIN Code: INE334A01023
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OPEN 283.00
PREVIOUS CLOSE 274.80
VOLUME 12653
52-Week high 322.00
52-Week low 116.05
P/E 27.52
Mkt Cap.(Rs cr) 967
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 283.00
CLOSE 274.80
VOLUME 12653
52-Week high 322.00
52-Week low 116.05
P/E 27.52
Mkt Cap.(Rs cr) 967
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sterling Tools Ltd. (STERTOOLS) - Auditors Report

Company auditors report

To the Members of Sterling Tools Limited

Report on the Audit of the Standalone Financial Statements

Opinion

1. We have audited the accompanying standalone financial statements ofSterling Tools Limited (‘the Company?) which comprise the Balance Sheet as at31 March 2022 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Cash Flow and the Statement of Changes in Equity for the year then endedand a summary of the significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 (‘the Act?) in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standards(‘Ind AS?) specified under section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 and other accounting principles generallyaccepted in India of the state of affairs of the Company as at 31 March 2022 and itsprofit (including other comprehensive income) its cash flows and the changes in equityfor the year ended on that date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditingspecified under section 143(10) of the Act.

Our responsibilities under those standards are further described in theAuditor?s Responsibilities for the Audit of the Standalone Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (‘ICAI?)together with the ethical requirements that are relevant to our audit of the financialstatements under the provisions of the Act and the rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion.

Key Audit Matter

4. Key audit matters are those matters that in our professionaljudgment were of most significance in our audit of the standalone financial statements ofthe current period. These matters were addressed in the context of our audit of thefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

5. We have determined the matter described below to be the key auditmatters to be communicated in our report.

Key audit matter How our audit addressed the key audit matter
Revenue recognition Our audit procedures for testing revenue recognition included but were not limited to the following:
The Company?s revenue is derived primarily from manufacturing and sale of hi-tensile cold forged fasteners recognised in accordance with the accounting policy described in Note 1(C) (12) to the accompanying standalone financial statements. • Understood the revenue recognition process and assessed the appropriateness of the revenue recognition policies adopted by the Company in accordance with principles enunciated under Ind AS 115;
Refer Note 29 and 48 for details of revenue recognised during the year from a large number of customers across geographies. In accordance with the principles of Ind AS 115 Revenue from Contracts with Customers (‘Ind AS 115?) revenue from the sale of products is recognised by the Company when the performance obligation is satisfied i.e. when the ‘control? of the goods underlying the particular performance obligation is transferred to the customer. The performance obligations are generally considered to be satisfied by the management at the time of delivery of goods to the customer/carrier in accordance with the terms and conditions included in the revenue contracts. • Evaluated the design and implementation of Company?s key financial controls in respect of revenue recognition and tested the operating effectiveness of such controls for a sample of transactions;
Revenue recognition from sale of products also involves determination of variable consideration on account of volume discounts and other rebate programs run by the Company which requires estimates to be made by the management at each period end. • Performed substantive testing of revenue transactions recorded during the year using statistical sampling by verifying the underlying supporting documents including customer contracts customer?s purchase orders sales order invoices and proof of delivery;
Further the Company and its external stakeholders focus on revenue as a key performance measure which could be an incentive or external pressures to meet expectations resulting in revenue being overstated or recognized before control has been transferred. • Performed testing of samples of revenue transactions recorded for specified period before and after year-end by verifying underlying documents as above to determine whether revenue was recognised in the correct period;
The above factors and the amounts involved required considerable audit efforts in testing revenue recorded during the year and therefore we have identified revenue recognition as a key audit matter in the current year audit. • Obtained confirmations for invoices outstanding at the year-end on a sample basis and reviewed the reconciling items if any;
• Tested manual journal entries posted to revenue;
• Assessed the adequacy of the disclosures made by the management in accordance with the applicable accounting standards.

Information other than the Financial Statements and Auditor?sReport thereon

6. The Company?s Board of Directors are responsible for the otherinformation. The other information comprises the information included in the AnnualReport but does not include the standalone financial statements and our auditor?sreport thereon. The Annual Report is expected to be made available to us after the date ofthis auditor's report.

Our opinion on the standalone financial statements does not cover theother information and we will 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 identified above when it becomesavailable and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.

When we read the Annual Report if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance.

Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements

7. The accompanying standalone financial statements have been approvedby the Company?s Board of Directors. The Company?s Board of Directors areresponsible for the matters stated in section 134(5) of the Act with respect to thepreparation and presentation of these standalone financial statements that give a true andfair view of the financial position financial performance including other comprehensiveincome changes in equity and cash flows of the Company in accordance with the Ind ASspecified under section 133 of the Act and other accounting principles generally acceptedin India. This responsibility also includes maintenance of adequate accounting records inaccordance 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.

8. In preparing the financial statements the Board of Directors areresponsible for assessing the Company?s ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intend to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

9. Those Board of Directors are also responsible for overseeing theCompany?s financial reporting process.

Auditor?s Responsibilities for the Audit of the StandaloneFinancial Statements

10. 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 assurance is a high level of assurance but is not aguarantee that an audit conducted in accordance with Standards on Auditing will alwaysdetect a material misstatement when it exists. Misstatements can arise from fraud or errorand are considered material if individually or in the aggregate they could reasonably beexpected to influence the economic decisions of users taken on the basis of thesefinancial statements.

11. As part of an audit in accordance with Standards on Auditingspecified under section 143(10) of the Act we exercise professional judgment and maintainprofessional skepticism 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 oneresultingfromerrorasfraudmayinvolvecollusionforgery intentional omissions misrepresentations or the override of internal control;

• 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 Act we are also responsible for expressing our opinion on whetherthe Company has adequate internal financial controls system with reference to financialstatements in place and 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 thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company?s ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor?sreport to the related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor?s report. However future events or conditionsmay cause the Company to cease to continue as a going concern; and

• 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.

12. 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.

13. We also provide those charged with governance with a statement thatwe have 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.

14. From the matters communicated with those charged with governancewe determine 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 publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

15. As required by section 197(16) of the Act based on our audit wereport that the Company has paid remuneration to its directors during the year inaccordance with the provisions of and limits laid down under section 197 read withSchedule V to the Act.

16. As required by the Companies (Auditor?s Report) Order 2020(‘the Order?) issued by the Central Government of India in terms of section143(11) of the Act we give in the Annexure I a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

17. Further to our comments in Annexure I as required by section143(3) of the Act based on our audit we report to the extent applicable that:

a) we have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purpose of our auditof the accompanying standalone financial statements;

b) in our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;

c) the standalone financial statements dealt with by this report are inagreement with the books of account;

d) in our opinion the aforesaid standalone financial statements complywith Ind AS specified under section 133 of the Act; e) on the basis of the writtenrepresentations received from the directors and taken on record by the Board of Directorsnone of the directors is disqualified as on 31 March 2022 from being appointed as adirector in terms of section 164(2) of the Act;

f) With respect to the adequacy of the internal financial controls withreference to financial statements of the Company as on 31 March 2022 and the operatingeffectiveness of such controls refer to our separate report in Annexure II wherein wehave expressed an unmodified opinion; and

g) With respect to the other matters to be included in theAuditor?s Report in accordance with rule 11 of the Companies (Audit and Auditors)Rules 2014 (as amended) in our opinion and to the best of our information and accordingto the explanations given to us:

i. the Company as detailed in note 41(B)(i) 41(B) (ii) and 41(B)(iii)to the standalone financial statements has disclosed the impact of pending litigations onits financial position as at 31 March 2022;

ii. the Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses as at 31 March2022;

iii. there has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company during the yearended 31 March 2022;

iv.

a. The management has represented that to the best of its knowledgeand belief as disclosed in note 53(vi) to the standalone financial statements no fundshave been advanced or loaned or invested (either from borrowed funds or securities premiumor any other sources or kind of funds) by the Company to or in any person(s) orentity(ies) including foreign entities (‘the intermediaries?) with theunderstanding whether recorded in writing or otherwise that the intermediary shallwhether directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever by or on behalf of the Company (‘the UltimateBeneficiaries?) or provide any guarantee security or the like on behalf of theUltimate Beneficiaries;

b. The management has represented that to the best of its knowledgeand belief as disclosed in note 53(vii) to the standalone financial statements no fundshave been received by the Company from any person(s) or entity(ies) including foreignentities (‘the Funding Parties?) with the understanding whether recorded inwriting or otherwise that the Company shall whether directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Funding Party (‘Ultimate Beneficiaries?) or provide any guarantee securityor the like on behalf of the Ultimate Beneficiaries; and

c. Based on such audit procedures performed as considered reasonableand appropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the management representations under subclauses (iv)(a) and (iv)(b) abovecontain any material misstatement.

v. The final dividend paid by the Company during the year ended 31March 2022 in respect of such dividend declared for the previous year is in accordancewith section 123 of the Act to the extent it applies to payment of dividend.

As stated in note 52 to the accompanying standalone financialstatements the Board of Directors of the Company have proposed final dividend for theyear ended 31 March 2022 which is subject to the approval of the members at the ensuingAnnual General Meeting. The dividend declared is in accordance with section 123 of the Actto the extent it applies to declaration of dividend.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm?s Registration No.: 001076N/N500013
Rajni Mundra
Partner
Place: Mumbai Membership No.: 058644
Date: 18 May 2022 UDIN: 22058644AJDZIE5269

Annexure I referred to in Paragraph 16 of the IndependentAuditor?s Report of even date to the members of Sterling Tools Limited on thestandalone financial statements for the year ended 31 March 2022

In terms of the information and explanations sought by us and given bythe Company and the books of account and records examined by us in the normal course ofaudit and to the best of our knowledge and belief we report that:

(i) (a) (A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of property plant and equipmentand right of use assets.

(B) The Company has maintained proper records showing full particularsof intangible assets.

(b) The Company has a regular program of physical verification of itsproperty plant and equipment and right of use assets under which the assets arephysically verified in a phased manner over a period of three years which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. In accordance with this program certain property plant and equipment wereverified during the year and no material discrepancies were noticed on such verification.

(c) The title deeds of all the immovable properties held by the Company(other than properties where the Company is the lessee and the lease agreements are dulyexecuted in favour of the lessee) disclosed in the financial statements are held in thename of the Company. However for title deeds of the undermentioned immovable propertiesin the nature of land which have been mortgaged as security for loans or borrowings takenby the Company confirmations with respect to title of the Company have been directlyobtained by us from the respective lenders:

Description of property Situated at/location Gross carrying value as at 31 March 2022
Land Plot No. 4 5A 52 53 54 and 54A DLF Industrial Estate Phase-I Delhi - Mathura Road Faridabad Haryana 195.95
Land Prithla Village Faridabad 206.13
Land Plot No 109-110 Vemgal Industrial Area District Kolar Karnataka 980.37

(d) The Company has not revalued its property plant and equipmentright of use assets or intangible assets during the year.

(e) No proceedings have been initiated or are pending against theCompany for holding any benami property under the Benami Transactions (Prohibition) Act1988 (45 of 1988) and rules made thereunder. Accordingly reporting under clause 3(i)(e)of the Order is not applicable to the Company.

(ii) (a) The management has conducted physical verification ofinventory at reasonable intervals during the year. In our opinion the coverage andprocedure of such verification by the management is appropriate and no discrepancies of10% or more in the aggregate for each class of inventory were noticed.

(b) The Company has a working capital limit in excess of H 5 croresanctioned by banks based on the security of current assets. The quarterly statements inrespect of the working capital limits have been filed by the Company with such banks andsuch statements are in agreement with the books of account of the Company for therespective periods except for the following:

Name of the banks Working capital limit sanctioned Nature of current assets offered as security Quarter ended Amount disclosed as per statement Amount as per books of accounts Difference Remarks/ reason if any
HDFC Bank Punjab National Bank and State Bank of India 12000.00 Pari-passu charge on current assets 30 June 2021 15075.26 14993.09* 82.17 As stated in note 24 of the standalone financial statements the variance is not material.
HDFC Bank Punjab National Bank Kotak Mahindra Bank and State Bank of India 12000.00 Pari-passu charge on current assets 30 September 2021 16173.22 16191.99* (18.77) As stated in note 24 of the standalone financial statements the variance is not material.
HDFC Bank Punjab National Bank Kotak Mahindra Bank and State Bank of India 12000.00 Pari-passu charge on current assets 31 December 2021 14289.88 14289.88* 0.42 As stated in note 24 of the standalone financial statements the variance is not material.
HDFC Bank Punjab National Bank Kotak Mahindra Bank and State Bank of India 12000.00 Pari-passu charge on current assets 31 March 2022 14464.30 14464.30# 11.77 As stated in note 24 of the standalone financial statements the variance is not material.

* Per books of accounts which were subject to review

# Per books of accounts which were subject to audit

(iii) (a) The Company has provided loans and guarantee to a subsidiaryand others during the year as per details given below:

Particulars Guarantees Loans
Aggregate amount provided/granted during the year:
- Subsidiary 5000.00 2000.00
- Others - 28.33
Balance outstanding as at balance sheet date in respect of above cases:
- Subsidiary 5000.00 2000.00
- Others - 10.06

(b) In our opinion and according to the information and explanationsgiven to us the investments made guarantees provided and terms and conditions of theguarantees provided are prima facie not prejudicial to the interest of the Company.Further the Company has not made any security or granted any loans or advances in thenature of loans secured or unsecured to companies firms Limited Liability Partnerships(LLPs) or any other parties during the year.

(c) In respect of loans granted by the Company the schedule ofrepayment of principal and the payment of the interest has not been stipulated andaccordingly we are unable to comment as to whether the repayments/receipts of principalinterest are regular.

(d) In the absence of stipulated schedule of repayment of principal andpayment of interest we are unable to comment as to whether there is any amount which isoverdue for more than 90 days and whether reasonable steps have been taken by the Companyfor recovery of such principal amounts and interest.

(e) The Company has not granted any loan or advance in the nature ofloan which has fallen due during the year. Further no fresh loans were granted to anyparty to settle the overdue loans/advances in nature of loan.

(f) The Company has granted loan which is repayable on demand as perdetails below:

Particulars All parties Promoters Related parties
Aggregate of loans
- Repayable on demand (A) 2000.00 Nil 2000.00
Total (A) 2000.00 Nil 2000.00
Percentage of loans to the total loans 100.00% Nil 100.00%

(iv) In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of section 186 of the Act inrespect of investments as applicable. Further the Company has not entered into anytransaction covered under section 185 and section 186 of the Act in respect of loansguarantees and security.

Annexure I referred to in Paragraph 16 of the IndependentAuditor?s Report of even date to the members of Sterling Tools Limited on thestandalone financial statements for the year ended 31 March 2022 (cont?d)

(v) In our opinion and according to the information and explanationsgiven to us the Company has not accepted any deposits or there is no amount which hasbeen considered as deemed deposit within the meaning of sections 73 to 76 of the Act andthe Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordingly reportingunder clause 3(v) of the Order is not applicable to the Company.

(vi) The Central Government has specified maintenance of cost recordsunder sub-section (1) of section 148 of the Act in respect of the products of the Company.We have broadly reviewed the books of account maintained by the Company pursuant to theRules made by the Central Government for the maintenance of cost records and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.

(vii) (a) In our opinion and according to the information andexplanations given to us the Company is regular in depositing undisputed statutory duesincluding goods and services tax provident fund employees? state insuranceincome-tax sales tax service tax duty of customs duty of excise value added tax cessand other material statutory dues as applicable with the appropriate authorities.Further no undisputed amounts payable in respect thereof were outstanding at the year-endfor a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us thereare no statutory dues referred in sub-clause (a) which have not been deposited with theappropriate authorities on account of any dispute except for the following:

Name of the statute Nature of dues Gross amount* Amount paid under protest Period to which the amount relates Forum where dispute is pending
Central Excise Act 1944 Excise duty and penalty 181.40 Nil January 2013 to June 2017 Director General of Goods and Services Tax Intelligence New Delhi
Central Excise Act 1944 Excise duty and penalty 106.04 Nil April 2014 to June 2017 Joint Commissioner of Central Tax Faridabad Haryana
Income-tax Act 1961 Demand under the Income-tax Act 1961 0.62 Nil Assessment year 2013-14 Commissioner of Income- tax (Appeals)
Income-tax Act 1961 Demand under the Income-tax Act 1961 3.56 Nil Assessment year 2016-17 Commissioner of Income- tax (Appeals)
Income-tax Act 1961 Demand under the Income-tax Act 1961 51.78 Nil Assessment year 2018-19 Commissioner of Income- tax (Appeals)
Income-tax Act 1961 Demand under the Income-tax Act 1961 155.68 Nil Assessment year 2020-21 Commissioner of Income- tax (Appeals)

* Excluding interest if any.

(viii) According to the information and explanations given to us notransactions were surrendered or disclosed as income during the year in the taxassessments under the Income-tax Act 1961 (43 of 1961) which have not been recorded inthe books of accounts.

(ix) (a) According to the information and explanations given to us theCompany has not defaulted in repayment of its loans or borrowings or in the payment ofinterest thereon to any lender.

(b) According to the information and explanations given to us includingconfirmations received from banks and representation received from the management of theCompany and on the basis of our audit procedures we report that the Company has not beendeclared a willful defaulter by any bank or financial institution or other lender.

(c) In our opinion and according to the information and explanationsgiven to us money raised by way of term loans were applied for the purposes for whichthese were obtained.

(d) In our opinion and according to the information and explanationsgiven to us and on an overall examination of the financial statements of the Companyfunds raised by the Company on short term basis have not been utilised for long termpurposes.

(e) According to the information and explanations given to us and on anoverall examination of the financial statements of the Company the Company has not takenany funds from any entity or person on account of or to meet the obligations of itssubsidiaries or joint venture.

(f) According to the information and explanations given to us theCompany has not raised any loans during the year on the pledge of securities held in itssubsidiaries or joint venture.

(x) (a) The Company has not raised any money by way of initial publicoffer or further public offer (including debt instruments) during the year. Accordinglyreporting under clause 3(x)(a) of the Order is not applicable to the Company.

(b) According to the information and explanations given to us theCompany has not made any preferential allotment or private placement of shares or (fullypartially or optionally) convertible debentures during the year. Accordingly reportingunder clause 3(x)(b) of the Order is not applicable to the Company.

(xi) (a) To the best of our knowledge and according to the informationand explanations given to us no fraud by the Company or on the Company has been noticedor reported during the period covered by our audit.

(b) No report under section 143(12) of the Act has been filed with theCentral Government for the period covered by our audit.

(c) According to the information and explanations given to us includingthe representation made to us by the management of the Company there are nowhistle-blower complaints received by the Company during the year.

(xii) The Company is not a Nidhi Company and the Nidhi Rules 2014 arenot applicable to it. Accordingly reporting under clause 3(xii) of the Order is notapplicable to the Company.

(xiii) In our opinion and according to the information and explanationsgiven to us all transactions entered into by the Company with the related parties are incompliance with sections 177 and 188 of the Act where applicable. Further the details ofsuch related party transactions have been disclosed in the standalone financialstatements as required under Indian Accounting Standard (Ind AS) 24 Related PartyDisclosures specified in Companies (Indian Accounting Standards) Rules 2015 as prescribedunder section 133 of the Act.

(xiv) (a) In our opinion and according to the information andexplanations given to us the Company has an internal audit system as required undersection 138 of the Act which is commensurate with the size and nature of its business.

(b) We have considered the reports issued by the Internal Auditors ofthe Company till date for the period under audit.

(xv) According to the information and explanation given to us theCompany has not entered into any non-cash transactions with its directors or personsconnected with them and accordingly provisions of section 192 of the Act are notapplicable to the Company.

(xvi) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934. Accordingly reporting under clauses 3(xvi)(a)(b) and (c) of the Order are not applicable to the Company.

(d) Based on the information and explanations given to us and asrepresented by the management of the Company the Group (as defined in Core InvestmentCompanies (Reserve Bank) Directions 2016) does not have any CIC.

(xvii) The Company has not incurred any cash loss in the current aswell as the immediately preceding financial year.

(xviii)There has been no resignation of the statutory auditors duringthe year. Accordingly reporting under clause 3(xviii) of the Order is not applicable tothe Company.

(xix) According to the information and explanations given to us and onthe basis of the financial ratios ageing and expected dates of realisation of financialassets and payment of financial liabilities other information accompanying the standalonefinancial statements our knowledge of the plans of the Board of Directors and managementand based on our examination of the evidence supporting the assumptions nothing has cometo our attention which causes us to believe that any material uncertainty exists as onthe date of the audit report that the Company is not capable of meeting its liabilitiesexisting at the date of balance sheet as and when they fall due within a period of oneyear from the balance sheet date. We however state that this is not an assurance as tothe future viability of the Company. We further state that our reporting is based on thefacts up to the date of the audit report and we neither give any guarantee nor anyassurance that all liabilities falling due within a period of one year from the balancesheet date will get discharged by the Company as and when they fall due.

(xx) According to the information and explanations given to us theCompany does not have any unspent amount in respect of any ongoing or other than ongoingproject as at the expiry of the financial year. Accordingly reporting under clause 3(xx)of the Order is not applicable to the Company.

(xxi) The reporting under clause 3(xxi) of the Order is not applicablein respect of audit of standalone financial statements of the Company. Accordingly nocomment has been included in respect of said clause under this report.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm?s Registration No.: 001076N/N500013
Rajni Mundra
Partner
Place: Mumbai Membership No.: 058644
Date: 18 May 2022 UDIN: 22058644AJDZIE5269

Annexure II to the Independent Auditor?s Report of evendate to the members of Sterling Tools Limited on the standalone financial statements forthe year ended 31 March 2022

Independent Auditor?s Report on the internal financial controlswith reference to the standalone financial statements under Clause (i) of Sub-section 3 ofSection 143 of the Companies Act 2013 (‘the Act?)

1. In conjunction with our audit of the standalone financial statementsof Sterling Tools Limited (‘the Company?) as at and for the year ended 31 March2022 we have audited the internal financial controls with reference to standalonefinancial statements of the Company as at that date.

Responsibilities of Management and Those Charged with Governance forInternal Financial Controls

2. The Company?s Board of Directors is responsible forestablishing and maintaining internal financial controls based on the internal financialcontrols with reference to standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls over Financial Reporting (‘the GuidanceNote?) 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 the Company?s business including adherence to theCompany?s 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.

Auditor?s Responsibility for the Audit of the Internal FinancialControls with Reference to Standalone Financial Statements

3. Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to standalone financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theICAI prescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to standalone financial statements and theGuidance Note issued by the ICAI. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to standalonefinancial statements were established and maintained and if such controls operatedeffectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls with reference to standalonefinancial statements and their operating effectiveness. Our audit of internal financialcontrols with reference to standalone financial statements includes obtaining anunderstanding of such internal financial controls assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor?s judgement including the assessment of the risks of material misstatementof the standalone financial statements whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Company?s internalfinancial controls with reference to standalone financial statements .

Meaning of Internal Financial Controls with Reference to StandaloneFinancial Statements

6. A company's internal financial controls with reference to standalonefinancial statements is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of standalone financial statementsfor external purposes in accordance with generally accepted accounting principles. Acompany's internal financial controls with reference to standalone financial statementsinclude those policies and procedures that (1) pertain to the maintenance of records thatin reasonable detail accurately and fairly reflect the transactions and dispositions ofthe assets of the company; (2) provide reasonable assurance that transactions are recordedas necessary to permit preparation of standalone financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorisations of management and directorsof the company; and (3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls with Reference toStandalone Financial Statements

7. Because of the inherent limitations of internal financial controlswith reference to standalone financial statements 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 internalfinancial controls with reference to standalone financial statements to future periods aresubject to the risk that the internal financial controls with reference to standalonefinancial statements may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion the Company has in all material respects adequateinternal financial controls with reference to standalone financial statements and suchcontrols were operating effectively as at 31 March 2022 based on the internal financialcontrols with reference to standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote issued by the ICAI.

For Walker Chandiok & Co LLP
Chartered Accountants
Firm?s Registration No.: 001076N/N500013
Rajni Mundra
Partner
Place: Mumbai Membership No.: 058644
Date: 18 May 2022 UDIN: 22058644AJDZIE5269

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